Govt asked to ease its control over VoIP services

Govt asked to ease its control over VoIP services

Sudibyo M. Wiradji, The Jakarta Post, Jakarta

The Voice over Internet Protocol (VoIP) is a promising
alternative call service but it will take sometime before it
gains wide acceptance in Indonesia.

Government policy on VoIP has frequently been cited as
hampering the rapid growth of IP-based telecommunication at least
when it comes to the alternative cheaper call service because
long established telecommunication companies such as PT Telkom
and PT Indosat do not seem agreeable to seeing its customers
turning to VoIP service operated by other companies.

Even though the government recently announced its decision to
award two more VoIP operation licenses, the move has yet provided
enough evidence on its willingness to create a sound and fair
VoIP business.

The government has reportedly awarded a principle license to
PT Excelcomindo Pratama, the country's third largest cellular
company, for having a large network and customer base. Another
license is expected to go to a consortium representing 12
operators for having protocol talk, a platform determining the
format and transmission of data or voice.

With two more licenses, there will be seven companies allowed
to operate VoIP. PT Telkom, PT Indosat, PT Satellite, PT Atlasat
Solusindo and PT Gaharu Sejahtera received the operation licenses
earlier.

Experts, however, said that to create a more sound and fair
VoIP business environment, the government should relax its tight
policy on VoIP concerns by allowing more companies to operate
VoIP service. "I think, the government should give the
opportunity to as many operators as possible to register with the
government (Directorate General of Post and Telecommunication)
considering the big market potential," multimedia analyst Roy
Suryo told The Jakarta Post recently.

The registered and eligible operators should be certified, he
said. "Like in the pharmaceutical world, any pharmaceutical
company wishing to sell its products is obliged to register with
the Ministry of Health," he said. Thus, the government has the
basis for taking measures against operators that are not
registered with the Directorate General of Post and
Telecommunication.

Conventionally, communication by telephone is sent through
several switch circuits in which each telephone connection
requires one dedicated channel. However, a telephone conversation
via Internet network or VoIP operates by converting the voices
into digital collections called packets that are sent through
Internet network available. The signals sent in digital packets
are then converted back into voices.

The cost of VoIP service is much cheaper compared to direct
talk service because the cost is calculated based on the local
Internet network, according to Roy. While, Telkom sets high
prices for its call services because the government has spent
huge funds on building telecommunication infrastructure and
networks.

The VoIP business started to flourish in 1997 when many
companies raced to offer the IP-based service as an alternative
call service. The VoIP service gained popularity within a very
short time because it offers relatively cheaper rates compared to
direct call service despite the questionable voice quality.

It will cost one around Rp 500 per minute to talk with a
friend in another city via VoIP compared to around Rp 1,400 per
minute when talking via direct telephony.

The lucrative VoIP business had contributed to the mushrooming
of operators offering VoIP service, with around 50 operators on
the list of the Indonesian Association for Internet Service
Providers (APJII).

According to Roy, the sharp drop in requests for international
calls via international call channel (SLI) or direct telephony
was a logical consequence of the irreversible technological
advances in light of the fact that the rapid development of
information technology in the telecommunication industry cannot
be controlled by regulation and besides, more consumers are in
need of cheaper call services.

Roy said that with the increasing number of consumers wishing
to have cheaper call service, it was high time for the government
to explicitly and transparently announce to the public about the
two call services -- direct call telephony and Internet
telephony. This will allow them to make their own choices,
whether they want direct telephony at more expensive rates or
Internet telephony at cheaper rates. "In this way, consumers
won't keep wondering why the quality of the voice is low," he
said.

By comparison, telephone users in the United States are fully
aware of the direct telephony and Internet telephony services
because the administration had explained the services
transparently, he said.

Technologically speaking, the VoIP case also reflects the
important role Research and Development (R&D) plays in any
industry. "It is high time for Telkom not to rely on monopolistic
practices to control the market but instead improve its R&D so
that with creativity and innovation, it can catch up with the
changing technology," he said.

Secretary-general of APJII Heru Nugroho shared Roy's view,
saying that controlling the number of VoIP operators was not an
effective means of terminating the illegal operation of VoIP
services. "Since the government's move to conduct raids on
operators, many still operate illegally and the number has even
increased," he said.

The VoIP issue has drawn the attention of high-ranking
officials, including members of the House of Representatives.

In response to criticism that VoIP would pose a threat to PT
Telkom in terms of revenue, Internet expert Onno Purbo claimed
that the VoIP would benefit the state. "In addition to tax that
they (operators) have to pay to the government, they are also
obliged to pay other fees such as the leasing fee for 30 voice
canals (E1) to PT Telkom for outgoing calls and
interconnectivity," he told Kompas daily recently.

A series of steps has been taken by the government to curb the
rapid growth of VoIP business.

The government conducted massive raids on VoIP operators in
2001 when the number of VoIP users showed an upward trend.

The government's move to close VoIP operators was then
followed by the issuance of Decree No. 159/ 2001, which drew
strong protests from various circles because two operators PT
Atlasat Solusindo and PT Gaharu Sejahtera that had no experience
in the telecommunication industry were among those who were given
operating licenses.

And under the government's regulation, operators that use
protocol talk are required to cooperate with one of the appointed
operators. This is the reason why 12 operators, including
Centrin, D-Net, Info Asia, Melsanet, Estiko, Primanet, Telesindo,
Pacific Link and Central Online, under the name Group 12 continue
to struggle to gain a license.

Despite its great potential, VoIP has been treated by the
government like a stepchild. "As long as the government continues
to intervene in VoIP business, the sound telecommunication
industry remains in question. This means it might take some time
before consumers can avail of relatively cheap telephone
services," said another expert, who wished to remain anonymous.