Despite drawbacks, Indonesia's Net market rosy

Despite drawbacks, Indonesia's Net market rosy

By Christiani Tumelap

JAKARTA (JP): Despite its current lack of infrastructure and
nascent computer-literate community, Indonesia is still a highly
promising market for internet business, executives of foreign
internet providers said.

The newest foreign internet player in town, the Singapore-
based search engine portal Catcha Group, said they decided to
expand their business to Indonesia because they saw a great deal
of internet opportunities here.

"The market here may be considered rather immature or limited
at present. But we see a definite, huge need for internet
service," the group's chief production officer, Luke Elliot, told
The Jakarta Post recently.

Catcha Group, which was founded in mid-1999 by four young men
all under 26 years old from Malaysia, Australia and Japan, opened
its Indonesian search engine portal Catcha.co.id last week with
an investment of at least US$100,000.

"With a population of over 200 million in Indonesia, it is an
enormously potential market. Another plus is that the people here
are pretty much adaptive to technology changes," Elliot said.

Separately, Ilyas Khan, managing partner of techpacific.com, a
Hong Kong-based investment company focusing on internet-related
business, said Indonesia was expected to experience the impending
prosperous internet business development in Asia given the
predicted vast growth of the country's internet market.

"Indonesia is a marginal market at present and it is clearly
behind India, China, Korea, Singapore or Hong Kong. But the
internet is a global phenomenon and its impact will also be felt
in Indonesia as much as anywhere else," he told the Post over the
weekend.

The Association of Indonesian internet Service Providers
recently estimated the number of internet users in Indonesia
reached over one million in 1999, of which 260,000 were
subscribers to the 36 active internet Service Providers.

The association predicted the number of users would swell to
1.45 million this year and nearly two million next year.

Khan said techpacific.com, which holds at least a 15 percent
stake of local website portal Detikcom, decided to invest in
Indonesia to anticipate the tendency of more internet companies
to be established here.

Catcha's Elliot said the sprout of more local internet
companies would help spur the local public's interest and demand
for internet services.

"We need to create a stronger demand here to help expand the
market," he said.

Elliot said the potent of Indonesia's huge internet market was
also recognized and well-anticipated by many manufacturers and
service companies.

He said there was a strong tendency for the companies to
advertise more on the internet in order to capture new customers
among internet surfers.

Catcha Group projects the advertising to be spent on
Indonesian websites will vigorously amplify from about $1.5
million in 2000 to $5.6 million in 2001, $15.7 million in 2002 to
hit $29.7 million in 2003.

Ai Mulyadi Mamoer, the chairman of telecommunications and
information technology division of the Indonesian Chamber of
Commerce and Industry, shared Elliot's view, saying that the
internet was a strong sensation in Indonesia that many companies
felt they should get involved in either by establishing an
internet-related company or advertising on the net.

However, he said, whether or not Indonesia would be able to
experience the predicted boom of internet business in Asia --
which Khan of techpacific.com said would likely happen in the
next five years -- would rely on the government's support and
commitment to promote the internet sector.

"The Indonesian government has not only been slow in promoting
the development of required infrastructure, but it has also
failed to show a serious commitment to the upbringing of the
information technology sector," he told the Post over the
weekend.

As of the end of last year, the country had over six million
fixed telephone lines, a basic infrastructure of the internet
along with computers, in operation to serve its 210 million
population, according to data from state-owned telecommunications
company PT Telkom.

Ai said in order to further stimulate the growth of the
internet market, internet Service Providers should consider to
provide services at a reasonably affordable price.

He said the currently expensive price of computers and access
fees to the internet had resulted in a sparse computer and
internet-literate population.

The Association of Indonesian Telecommunications Society
estimates that Indonesians should pay an average of $26.68 in
total on telephone calls, internet subscriptions and usage fees
for 20 hours surfing on the internet.