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.