New decree on VoIP puts light out on old operators

New decree on VoIP puts light out on old operators

Debbie A. Lubis, The Jakarta Post, Jakarta

The government is set to issue a new ministerial decree this
week that bans existing Voice over Internet Protocol (VoIP)
operators from continuing their services and gives the go-ahead
to five new operators to start their services.

VoIP is a technology for transmitting ordinary telephone calls
over the Internet using packet-linked routes.

Gatot S. Dewabroto, spokesman for the Directorate General for
Post and Telecommunications at the Ministry of Communications,
said that under the decree the current 12 VoIP operators have to
stop their services before June 1.

As of that date, only the five new operators will be allowed
to offer VoIP services, namely state-owned companies PT Telkom,
PT Indosat and Indosat's cellular subsidiary PT Satelindo, and
private companies PT Gaharu Sejahtera and PT Atlassat Solusindo.

The five companies received licenses from the government to
operate VoIP services last year, according to Gatot.

"The existing 12 operators have to stop their services because
the government never licensed them to do VoIP business. Their
licenses are not for VoIP," Gatot said.

The granting by the government of licenses to five new
operators and the plan to stop the existing operators' business
have drawn strong protests from the operators as well as the
Indonesian Internet Service Providers Association (APJII).

The association objects to the government's argument that the
operators had never been granted licenses to offer VoIP services.

The association acknowledged that the licenses held by the 12
operators did not mention VoIP. Instead, the licenses only name
"Internet telephony, protocol talk, protocol Internet phone,
Internet talk or Internet phone" as the businesses the operators
are allowed to engage in.

"True, the licenses do not explicitly say 'VoIP'. But
'Internet telephony, protocol talk, protocol Internet phone are
nothing but VoIP," an APJII executive, who asked for anonymity,
said at a recent media conference.

The executive regretted that the government had not asked the
association to discussion the matter.

"We have never been involved in policy-making; suddenly it
(the government) says there will be only five VoIP operators," he
said.

He also criticized the appointment of Gaharu and Atlassat as
VoIP operators, which he said did not follow a transparent tender
process.

"We have never heard of them," the association said.

APJII legal advisor Hinca I.P Pandjaitan said the association
had asked the government to explain to it the fate of the current
VoIP operators once they are forced to cease operating after May
31.

He said the request was made early this year in a letter to
Minister of Transportation Agum Gumelar, whose ministry also
oversees communications. The association received no response
from the minister.

"It appears that the 12 operators will be forced to merge with
one of the new license holders once the decree comes into
effect," he told The Jakarta Post.

Turf war over VoIP services emerged as Telkom and Indosat saw
in the technology a new threat to their current call services.

VoIP can slash phone bills by up to 70 percent for
international calls compared to those made through Indosat's
lines.

For example, a call to Hong Kong that would cost Rp 8,000
using Indosat's international call service costs Rp 2,000 through
VoIP.

This inspired Telkom and Indosat to add VoIP to their services
instead of compete against it.

Telkom VoIP director Endy Prijanto said its recently launched
VoIP service TelkomSave boasted a monthly call traffic of 15
million minutes.

Most Telkom VoIP calls are made to destinations like
Singapore, Australia, the United States, China and Hong Kong,
according to Endy.

"This is a potential market so we need strategic steps to
increase the traffic," he said.

He said Telkom signed last week an agreement with an America-
based VoIP operator, that would improve the quality of phone
calls made to the U.S.

Telkom's extensive fixed-line infrastructure has a traffic
capacity of 50 million minutes a month, of which only a third was
being utilized, he said.

"We plan to launch local VoIP some time in April to utilize
our infrastructure," Endy said,

Indosat, meanwhile, plans to launch its VoIP services by the
second quarter of this year, with VoIP installation completed in
Jakarta, Medan, Surabaya and Batam.

Its subsidiary Satelindo launched its VoIP service last
February, although it is presently limited to Jakarta residents
and subscribers of its GSM postpaid service.