More companies enter leased line sector

I. Christianto, Contributor, Jakarta

Although many Indonesian companies are still in financial difficulties, the advancement of information technology remains a number one priority for many.

The use of more advanced technology for a rapid transfer of data either in the form of voice or video is a prerequisite these days if companies want to survive the tight competition in the market.

The sophisticated IT technology would mean nothing, however, if it is not supported by adequate infrastructure such as software applications, hardware sets and more importantly the telephone lines.

Telephone lines in Indonesia are generally made available for monthly charges from state-owned PT Telkom but if customers want them for a specific purpose, they can lease them.

Basically, a leased line is a telephone line that which is leased for private use. In some contexts, it's called a dedicated line. A leased line or leased circuit is usually contrasted with a switched line or dial-up.

Typically, medium to large companies rent leased lines from the telecommunications carriers to interconnect different geographic locations to their branch offices. The alternative is to buy and maintain their own private lines or, increasingly perhaps, to use the public switched lines with secure message protocols.

In Indonesia, there are few companies delivering leased lines. Actually, until late last year, there were only PT Telkom and PT Indosat that owned telecommunications infrastructures. Most private companies extend leased lines by utilizing Telkom's infrastructure.

Now customers have a new option since the privately owned PT Excelcomindo Pratama has begun to offer leased lines through its own fiber optic system. Excelcomindo, popularly known as the XL cellular operator, is utilizing its existing backbone, offering leased lines for permanent access to communications, including the Internet, for its whole network.

Excelcomindo's corporate account manager Dedi S. Sirath said many companies still viewed leased lines as an efficient and economical communications tool for simultaneous, instant connections among their branches.

"We are entering the market as a real new player as customers knew only limited providers," he said.

In addition to Telkom and Indosat, the established players for leased line service are, among others, PT Citra Sari Makmur and PT Lintasarta.

Telkom, the country's domestic telecommunications operator, offers leased circuits, which includes analog and digital systems. The company operates its own system across the country and remains the giant for leased line service providers as it has been operating under a monopolistic license for decades.

Indosat which operates international telecommunications offers leased circuits for those seeking connections abroad. The company offers five types of leased circuit services. One of the services, Indosat World Link, is a high-speed international privately leased circuit providing a 24-hour, high-quality digital communication link between one party in Indonesia to a dedicated partner overseas with speeds ranging from 64 Kbps to 2 Mbps, suitable for constant high volume communications. The service supports a full-range of telecommunications applications, including high speed data communications, e-mail, a remote database look up and processing, to more advanced applications such as CAD/CAM. It also supports interactive audio-visual communication.

Another service, Indosat Direct Link, is an international high-speed digital telecommunication system providing point-to- point, point-to-multi point or even mesh configuration that connects subscribers in Indonesia with their counterpart businesses overseas using satellite transmission and VSAT equipment.

Meanwhile, Lintasarta offers High Speed Connections or a Digital Data Network (DDN) service, which offers a premium quality dedicated line, available for 24-hour, non-stop operation. It uses digital technology to enable superior local point-to-point connections.

The company also has Dedicated Internet Lintasarta, a 24-hour, high bandwidth, dedicated connection to the Internet. Citra Sari Makmur has the CSM MultiNet, a multi-services telecommunications network providing solutions for data and voice communications. It is designed to be the right solution for modern telecommunications needs such as LAN interconnections for data, voice and videoconferencing.

With the presence of Excelcomindo which offers XLnet, the leased line service competition will likely be stiffer.

XLnet was a new service designed to meet corporate communications requirements, an interesting package of services, combining leased line services and broadband Internet access, and presented a complete one-stop solution service for the customers, Dedi said.

He added that an XLnet leased line service was based on the fiber optic backbone developed by Excelcomindo which spanned from Sumatra and Java to Bali and Lombok.

"As a new player which owns its own infrastructure, we want to attract prospective customers to experience an unsurpassed level of reliability and capacity," he said, adding that there were presently some 40 customers since the introduction of the service earlier this year.

The backbone infrastructure of XLnet utilizes microwave transmission and SDH technology. By applying such a fiber optic transmission technology, capacity upgrade could be easily done.

The demand for multimedia, the Internet and data communications has and will likely increase in Indonesia following the trend globally. Since mostly corporate users generally apply the services, operators regard the corporations as the main target. The competition here for high quality, modern communications technology could get very interesting.