The original Bahasa news story is here, the English translation is below:

The Government Studies Method of Lowering Broadband Tariff

Achmad Rouzni Noor Ii - detikInet
Jakarta, March 14, 2006

The government promises to conduct a study to lower broadband internet tariffs. If required, it is ready
to issue revolutionary policies.

Minister of Communication and Information Sofyan Djalil admitted that internet rate in Indonesia is
more expensive than other countries. “Broadband (rates) is 45 times more expensive than other
countries. Therefore, we will try to reduce monopolistic regulations,” he said on Tuesday.

“Bottom line is, our regulation must promote equal level playing field. What important is that it is
pro-consumers,” Sofyan added.

“We will conduct a study on how to lower broadband costs. If the study concludes that new licenses need
to be issued, we will, especially for international communications,” he said.

“Fibre optic owners object to lowering their prices. Therefore we will create a competitive environment
with the regulations.”

Sofyan added, however, that if broadband tariffs can be lowered by themselves, the government will not
launch new regulation. “The policy will probably be revolutionary. If we need new licenses, we need a
revolutionary policy,” he said. “We will announce more in two months.”

According to Sofyan, the study will observe about the expensive broadband tariffs in Indonesia and what
could be done to lower them. Aside from that, the study will also see about last mile access.

Costly leased lines hamper Internet
Tuesday, November 15, 2005
Leony Aurora, The Jakarta Post, Jakarta

High prices of leased lines for domestic and international links in Indonesia, which can be up to 48 times more expensive than other countries, is hampering the development of the Internet and should be regulated, a study shows.

The annual domestic leased line fee for a two-kilometer link with a capacity of 2 Megabits per second (Mbps) here is US$18,000, an overwhelming 48 times more expensive than the $376 applied in India, according to a study conducted by LIRNEasia, a regional ICT policy and regulation capacity building organization, in August.

The Indonesian price is quadruple the price applied in Europe, where an average person earns 25 times more than an average Indonesian in a year, said director of organizational development and projects of LIRNEasia Divakar Goswami, who conducted the study with Indonesian information and communication technology (ICT) expert Onno Purbo, recently.

The annual fee for an international link from the country’s second biggest telecommunication firm PT Indosat of $108,528, according to the study, compares to $36,868 charged in Denmark and $29,555 in India.

“Such high leased line prices result in high Internet prices for customers, which in turn creates a barrier to rapid Internet diffusion in Indonesia,” Goswami said.

Internet penetration — measuring the ratio between the number of customers and population — in Indonesia is estimated to be 0.6 percent by the end of this year.

Indosat president director Hasnul Suhaimi said high leased line prices were the result of not having sufficient numbers of users. “We have not reached the economic scale yet for the development of leased lines,” he said.

He added that the international fee had declined by some 50 percent in the last four years due to competition with other providers.

“Indonesian prices are going down. It’s just that (prices) in other (countries) are falling more rapidly,” said Hasnul.

Goswami suggested that the government make a thorough effort to regulate fees for leased lines so that Internet could be provided more cheaply.

One obstacle may be that the government controls shares in the country’s largest telecommunication firm PT Telkom and also Indosat. The supposedly independent Telecommunications Regulatory Body (BRTI) is chaired by the Ministry of Communications and Information’s director general of Post and Telecommunications, Basuki Yusuf Iskandar.

“It would be hard for BRTI to make policies that could reduce revenues for the two companies,” said Goswami.

Chairman of the Indonesia Infocom Society (Mastel) Giri Suseno Hadihardjono said that in India, such regulations did not put telecommunication companies out of business — in fact, they developed instead.

“We cannot simply copy (India). We have to take into consideration the local conditions,” said Giri. The government, he said, had to make up its mind on whether the initial decline in revenues caused by the lower prices was worth the boost in Internet usage.

“Of course, if it’s cheaper, more people will use the Internet,” he said.

Indonesia has adopted the United Nations’ target to ensure that 50 percent of the population gets Internet access by the year 2015.

http://www.thejakartapost.com/Archives/ArchivesDet2.asp?FileID=20051115.L03

‘Innovative’ approach promotes use of WiFi in RI
Monday, November 14, 2005
Leony Aurora, The Jakarta Post, Jakarta

For Indonesians, the saying “where there’s a will, there’s a way” takes on a special meaning. Under pressure, their minds click creatively, finding nooks, crannies, bypasses and loopholes to attain objectives when the normal path is strewn with stumbling blocks.

From such conditions, unusual practices and procedures emerge — some improper, but others quite inventive. The development in the use of Wireless Fidelity (WiFi) technology in Indonesia is an example of a little bit of both.

Although the use of WiFi to surf the Internet using “hotspots” at hip cafes has yet to gain great popularity, the technology scores big time in other places.

“In Indonesia, WiFi is not only used as an access network by Internet service providers (ISPs) to reach customers’ houses, but also as a backbone network to haul Internet traffic over large distances,” said director of organizational development and projects of LIRNEasia, Divakar Goswami, recently.

“This situation is unique because in most countries, ISPs use wired options to reach customers and lease backbone networks from telecom operators,” he said, adding that at least 37 cities from Medan to Jayapura had been cataloged as utilizing WiFi as a backbone or access network.

Goswami and information and communication technology (ICT) expert Onno Purbo, under LIRNEasia — a regional ICT policy and regulation capacity building organization — conducted a study on WiFi and Internet networks in Indonesia this August.

WiFi is a broadband networking technology that allows people to connect various peripherals and share an Internet connection using the airwaves. Using transceivers operating at a frequency of 2.4 gigahertz (GHz) — recently unlicensed by the government — WiFi has the ability to transfer data at up to 11 megabits per second (Mbps) within a radius of 50 meters, and extendible to 15 kilometers.

Internet users in other countries use the technology merely to stay online anywhere within a small specified area, called a hotspot, without the hassle of using cables, but are connected to their ISPs through reliable high-speed cable.

In Indonesia, said Goswami, many ISPs used WiFi at the 5.8 GHz frequency, suitable for long range communications of up to a 60-km radius, to connect customers to cyberspace — a free but illegal practice, as the government has yet to liberate the frequency.

“One reason for this ‘innovative’ use of WiFi in Indonesia is the high annual leased-line fees charged by Telkom or Indosat,” said Goswami. According to the study, most of the 174 licensed ISPs, in addition to some 50 unlicensed ISPs, use WiFi to avoid paying high prices.

The annual domestic leased-line cost for a 2-kilometer link with a capacity of 2 Mbps here, for example, was US$18,000, almost four times the $4,802 applied on average in Europe, and a whopping 48 times more costly than the $376 applied in India.

The annual fee for an international link from Indosat of $108,528, according to the study, is almost triple the $36,868 charged in Denmark and quadruple the $29,555 in India.

Expensive leased-lines translate to high retail prices for customers. To recoup the costs, a customer — a school, office, or neighborhood — can sublet the connection further to other customers, which then share the already-limited connection.

“Many people make use of it, as it is cheap (as compared to leased-lines),” said Michael S. Sunggiardi from the Indonesian Wireless Local Area Network and Internet Association.

As a result, he said, there can be much interference to connections, especially as the technology uses radio signals that can be influenced by weather conditions and other disturbances.

“WiFi, however, plays a big role in advancing the Internet network in Indonesia as an alternative (medium),” added Michael, who also runs an ISP in Bogor.

Read article here.



The premier business paper in Indonesia, Bisnis Indonesia:
Mastel: Turunkan tarif saluran sewa Internet (Scan jpeg)

The incumbent PT Telkom in their newsletter [ironical because PT Telkom is the one of the reasons why leased line prices are so high in Indonesia]

InfoBankNews.com