Higher rates may kill Net enthusiasm
JAKARTA (JP): The government's plan to increase fixed-line telephone rates may kill the momentum of the Internet in the country, an expert said here on Friday.
The chairman of the Indonesian Internet Service Provider Association, Heru Nugroho, said the planned increase in phone rates would discourage the use of the Internet.
"The hike would create a stagnancy of growth because subscribers would bear the cost of higher telephone bills," he told The Jakarta Post.
The House of Representatives approved last month the government's proposal to raise telephone rates by an average of 21.67 percent this year. But the House then asked the government to review the increase, which was scheduled to be implemented on June 10, following public criticism that the new rate structure was misleading.
Although the average rate increase would be 21.67 percent, some calls in Jakarta would be 167.86 percent higher.
Newly appointed Minister of Communications Budhi Mulyawan Suyitno asserted on Thursday that the government would review the telephone rate structure and circulate it among the public before implementation.
He did not say when the new rate structure would take effect.
Heru said that currently about 90 percent of the 450,000 Internet subscribers in the country used regular telephone lines to connect to the Internet. The other 10 percent use other means such as broadband cable and satellite.
Of the 450,000 subscribers, about 95 percent are individual subscribers who would be greatly affected by the increase, he said.
The increase would also stunt the growth of the Internet kiosk business, considered the spearhead for the country to breach the digital divide, Heru said.
"People will be reluctant to build an Internet kiosk once the telephone rates go up. The business would not grow and as a result the spread of the Internet would be crippled," he said.
Heru said the number of Internet kiosks had doubled during 2001 to some 3,000 kiosks from 1,500 kiosks at the end of last year.
He had expected this figure to reach between 5,000 and 6,000 Internet kiosks this year, but with the planned hike in telephone rates he fears the growth will come to a standstill.
"I am absolutely certain the target will not be reached, and there probably won't even be anymore additions to the existing kiosks," Heru said.
People will begin looking for other, cheaper alternatives to conventional telephone lines to connect to the Internet.
However, alternatives such as broadband cable are expensive and are a more appropriate alternative for corporate customers or households at the high end of the economic scale, Heru said.
The number of Internet users in Indonesia is currently estimated at two million, a majority of which access the Internet through Internet kiosks. (tnt)