Higher rates may kill Net enthusiasm

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)