Lippo launches new ISP despite row on Lippo e-Net

Lippo launches new ISP despite row on Lippo e-Net

JAKARTA (JP): Lippo Group launched on Friday an Internet
service provider (ISP), www.link.net.id, despite some controversy
over the group's insurance-turned-Internet company Lippo e-Net.

LinkNet claims to be the first ISP to offer high-speed
broadband access. It also will provide free access for individual
users and Internet rent providers (Warnet).

Lippo Group executive James Riady said LinkNet and Lippo e-Net
were completely separate companies, although they are both under
Lippo Group.

James, however, refused to say more about the group's
expansion into the Internet businesses.

Commissioner chairman of LinkNet Handoko Tanuadji said Lippo
e-Net had no involvement in LinkNet, although the company would
utilize the infrastructure owned by the ISP.

Handoko said Lippo Group had allocated at least Rp 50 billion
(US$6.3 million) for the development of LinkNet, in which the
group owns the majority stake.

He said LinkNet planned to expand its business by acquiring
another existing local ISP. "We will allocate another Rp 200
billion to back up the acquisition plan," he told journalists
during the ISP's launch.

The Lippo Group's publicly listed life insurance firm Lippo e-
Net is currently facing an investigation by the Capital Market
Supervisory Agency (Bapepam) for allegedly presenting
inconsistent information to the public.

The management of the Jakarta Stock Exchange reported Lippo e-
Net to Bapepam for allegedly creating the misleading image that
it had transformed itself into an Internet company. The
announcement of a shift in the company's core business in January
resulted in the company's share prices doubling within a week.

LinkNet managing director Sutrisno Wibowo said the company was
optimistic it would be able to compete with existing ISPs,
because its broadband access gave it a faster and free of charge
connection.

"I don't think we have any potential competitors now. LinkNet
has a much better quality connection, and it's free," he said,
adding that the company expected to sign up no less than 300,000
registered users within its first year of operation.

Sutrisno, however, acknowledged that like other Internet
start-up companies, LinkNet would not be able to turn a profit
during its first and second years of operation.

"LinkNet is expected to start earning a profit within the
third to fifth year of operation," he said, adding that LinkNet
was projected to reach the break-even point in two to three
years.

There are currently 35 ISPs operating in Indonesia, including
LinkNet, according to the Indonesian Association of Internet
Service Providers.

Sutrisno said his company would rely on advertisements as well
as corporate subscribers for revenue. He said LinkNet would
charge advertisers an average monthly fee of between $4,000 and
$5,000. (cst)