ISPs compete for corporate clients, combat viruses<\/p>\n
Rudijanto, Contributor, Jakarta<\/p>\n
This year, the Internet user population in Indonesia is
\nexpected to grow by around 50 percent. This may seem like a huge
\nincrease.<\/p>\n
But with the number of Internet Service Providers (ISP)
\noperating here -- currently some 70 companies -- competition will
\nbe tight, as each will certainly try to fight for a slice of the
\nmarket. Hence, most may decide to focus more on the corporate
\nmarket, which, for several reasons, means better revenue.<\/p>\n
The local Internet user population has grown consistently,
\nfrom about 600,000 in 2002 to 865,706 in 2003. The Indonesian
\nInternet Service Providers' Association (APJII) estimates that
\nthere will be 1.3 million users within this year.<\/p>\n
A couple of the reasons behind the providers' decision to
\nconcentrate more on corporate accounts are the relatively poor
\ninfrastructure available for residential areas and the tough
\ncompetition in this segment coming from state-owned
\ntelecommunications firm PT Telkom's ISP, Telkomnet.<\/p>\n
\"Though some subscribers are still loyal to their ISP, once
\nthey experience problems caused by poor infrastructure, they will
\neasily switch to Telkomnet. Thus, Telkomnet has succeeded in
\ngrabbing the largest portion of the residential market,\" said
\nFerry Prasetyo, APJII public relations officer.<\/p>\n
Telkomnet has posed great challenges to local ISPs since its
\nlaunch in June 1999, with its free subscription Internet service.
\nAlthough it charges up to Rp 17,500 per minute, the no-
\nsubscription-fee offer has attracted residential users who want
\nto avoid administrative hassles.<\/p>\n
PT Cyberindo Aditama (CBN), which has a large number of
\nresidential subscribers who contribute significantly to the
\ncompany's revenue, admits that its greatest and most powerful
\ncompetitor is Telkomnet.<\/p>\n
\"We have about 45,000 residential subscribers while we now
\nhave 500 corporate subscribers. Although the two figures may
\nappear vastly different in terms of quantity, the two segments
\ncontribute almost equally to our total revenue,\" said CBN chief
\ncommercial officer Sugiharto Darmakusuma.<\/p>\n
The fierce competition has forced several providers to close
\nshop, even state-owned Wasantaranet. The company, which was a
\nsubsidiary of PT Pos Indonesia, decided to shut down all of its
\n41 branches in April 2001. As for Meganet, an ISP based in
\nSurabaya, initially downsized and closed several branches, but
\nthen terminated business in 2002.<\/p>\n
Ferry revealed that almost 20 out of the 90 ISPs went out of
\nbusiness last year.<\/p>\n
Local ISPs now realize that without a significant market share
\nin the corporate segment, their survival will be moot.
\nTelkomnet's solid, nationwide infrastructure is also a stumbling
\nstone.<\/p>\n
\"This year, next to corporations, we will also focus our
\nmarketing on customers who have a different attitude and
\nlifestyle, like those who use the Internet on the go, not only at
\nhome,\" said Sugiharto.<\/p>\n
In line with this strategy, CBN has opened Internet hotspots
\nin some cafes and hotels, for example at Plaza Indonesia, Plaza
\nSenayan and Cilandak Town Square.<\/p>\n
The company is also working with cellular phone service
\nproviders to provide the latest, third-generation (3G) Internet
\nservices. Sugiharto said CBN has successfully concluded the trial
\nphase of the advanced system and plans to launch the CBN Mobile
\nservice in the next two or three months.<\/p>\n
While a number of ISPs are expected to enter the lucrative and
\nfast-growing corporate market, PT Supra Primatama Nusantara
\n(Biznet), with offices in Jakarta and Bali, is one provider that
\nhas succeeded in tapping both medium- and large-scale
\nenterprises.<\/p>\n
\"It does not mean that we do not welcome residential
\ncustomers, but we are concentrating more of our efforts on this
\nniche market. It is small, but the turnover from even a few
\ncompanies means large revenue,\" said Biznet president director
\nAdi Kusma.<\/p>\n
Like CBN, Biznet has also established hotspots featuring
\nbroadband wireless facilities in various locations. Early this
\nyear, the company opened hotspots at 11 Starbucks outlets.<\/p>\n
\"Frankly, I was surprised to find out recently that so many
\nprofessionals here lead an extremely mobile lifestyle. They carry
\nnotebook computers everywhere and can work almost anywhere, even
\nin crowded places like cafes. That is why I believe targeting
\nthem is the right marketing strategy,\" said Adi.<\/p>\n
Fighting for a large slice of the corporate or modern
\nlifestyle niche is not easy, however, as each provider arms
\nitself with the most advanced technology to offer superior
\nfeatures and services to try and beat out its competitors.<\/p>\n
For example, PT Circleonecom is another professional player
\nwith a focus and strategy similar to Biznet's.<\/p>\n
\"Even so, the prospects are quite promising. More and more
\nIndonesians are keen to have an Internet connection and many
\ncompanies now -- medium and even small companies -- cannot do
\nwithout the Internet,\" said Circelone senior operation engineer
\nIndra M. Nainggolan.<\/p>\n
Among the various services Circleone offers is the leased line
\nand online access with different rates for uplink and downlink.<\/p>\n
\"We also offer email and web hosting,\" said Indra.<\/p>\n
With more players flooding the corporate segment with their
\nmarketing strategies, Indra admits that competition among ISPs
\nhas become fairly tough, and subscribers frequently migrate from
\none ISP to another.<\/p>\n
\"We do our utmost to maintain customers, because in this tough
\nclimate of cutthroat competition, it is highly likely that
\ncustomers move to other providers. They do not just stick to big-
\nname providers ... they tend to compare services and rates,\" he
\nadded.<\/p>\n
For any user -- but particularly businessmen -- security is a
\nprimary concern, so local ISPs are also vying to provide the
\nlatest security features and technology while keeping Internet
\naccess convenient and painless.<\/p>\n
The growing number of subscribers also means ISPs must monitor
\nbandwidth more carefully. For instance, Biznet's policy is to
\nimmediately expand its bandwidth capacity once 80 percent of its
\nbandwidth has been taken.<\/p>\n
Meanwhile, the issue of providing convenient Internet access
\nhas prompted CBN to increase by 8 Mbps its 26 Mbps bandwidth
\nfiber optic link to the United States and install a new fiber
\noptic link to Singapore. To date, CBN has a total bandwidth
\ncapacity of 163 Mbps.<\/p>\n
Another major problem is protecting their subscribers
\ncomputers from receiving various viruses. Battling viruses entail
\nconsiderable efforts and even huge funds for ISPs.<\/p>\n
\"To protect our network from viruses, we have acquired a new
\nSecurity Gateway equipment that costs between US$50,000 and
\nUS$100,000. This is the latest anti-virus device that probably
\nonly Biznet has in the country,\" said Adi.<\/p>\n
ISPs have valid reasons to protect their network from viruses.
\nA huge number of viruses can shrink the bandwidth and slow down
\nthe access to the Internet.<\/p>\n
Like elsewhere, ISPs here have two battlegrounds. Winning the
\nhearts of customers is never easy. The other ongoing battle is
\nagainst the extremely unexpected foe, the viruses.<\/p>",
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