Government sets Internet subscription fees

Government sets Internet subscription fees

JAKARTA (JP): The Government has issued a new regulation which
sets the country's highest and lowest rates for Internet
subscription fees.

The latest newsletter of the state-owned international
telecommunications operator PT Indosat stated that the regulation
is based on a decree of the Minister of Tourism, Post and
Telecommunications, which came into effect on July 30.

According to the regulation, the monthly fees on Internet
subscription for individuals using an analog telephone dialing
system should be set at a minimum of Rp 15,000 (US$6.43) and a
maximum of Rp 18,000; and for individuals using a digital dialing
system at between Rp 75,000 and Rp 90,000.

Subscribers using local area networks of computers with an
analog telephone dialing system should be charged at between Rp
200,000 and Rp 240,000 per month and those with a digital dialing
system at between Rp 1 million and Rp 1.2 million.

The standardization of subscription fees for Internet services
was set due to the increasingly-sharp competition in the rapidly-
expanding Internet sector.

In 1995, the government introduced a regulation allowing just
small-scale enterprises run by young professionals to provide
Internet services. Big firms, therefore, do not have the
opportunity to enter the Internet service business. Since then,
at least 30 licenses have been issued to companies intending to
provide Internet services but only 20 of them are currently in
operation.

Commercial use of Internet in Indonesia began about two years
ago. In facing the competition, a number of Internet providers
are offering lower subscription fees to attract more subscribers.
On the other hand, many users are less careful to realize that
the quality of services might be poor due to the low subscription
fees.

The July regulation also sets the hourly tariffs for
individual Internet subscription at between Rp 2,000 and Rp 2,400
for the analog dialing system and at between Rp 8,000 and Rp
9,600 for the digital system. The rates for a local area network
are set at between Rp 10,000 and Rp 12,000 for the analog system
and at between Rp 30,000 and Rp 36,000 for the digital system.

Tariffs for usage of over 200 hours per month are set at
between Rp 400,000 and Rp 480,000 for individual users (analog)
and between Rp 1.6 million and Rp 1.92 million (digital), and for
local area networks at between Rp 2 million and Rp 2.4 million
(analog) and at between Rp 6 million and Rp 7.2 million
(digital).

According to the newsletter, the government has also
introduced another regulation which eliminates import duties on
terminals for satellite-based telecommunications services.

The Ministry of Finance has classified satellite-based
telecommunications terminals as one type similar to mobile
cellular telecommunications handsets. Thus, beginning April this
year, any terminal for International Maritime Satellite services
is exempted from import duties.

The government previously charged a 25 percent import duty on
such terminals besides a 10 percent value added tax which is now
still valid. (icn)