Mon, 07 Feb 2000

Number of Internet users in RI expected to increase

JAKARTA (JP): The number of Internet users in Indonesia are projected to increase from approximately 1 million in 1999 to 1.45 million in 2000 and 1.98 million in 2001, according to the Association of Indonesian Internet Service Providers.

The association attributed the sharp growth in the number of Internet users to the increase in the people's awareness about the benefits of the service.

The number of local Internet domains surged by nearly 80 percent throughout 1999, hitting 4,685 sites in December from only 2,624 sites in January, the association said in its report.

The association said corporate domains recorded the most dynamic growth last year with sites rising by about 75 percent to reach 3,544 sites in December from 2,042 in January.

And the U.S.-based telecoms and IT research firm, International Data Corporation, estimated the number of Internet users in Indonesia who will make purchases through e-commerce will grow from approximately 70,000 in 2000 to 600,000 by 2003.

Indra M. Utoyo, general manager of multimedia division at state telecoms company PT Telkom, said Internet and e-commerce had become more and more attractive to business enterprises due to their potential gain.

"The potential gain offered by Internet and e-commerce businesses have also made them favorite choices for stock market players, a condition which I consider a natural consequence," he told The Jakarta Post over the week end.

At least eight new players are set to enter the virtual business market during the first two months this year, including listed companies like the insurance firm Asuransi Lippo Life (Lippo E-net) and electronics and office equipment suppliers Astra Graphia, Multipolar and Metrodata Electronics.

Multipolar plans to develop a high speed Internet access using fiber optic with investment of Rp 130 billion (US$18.5 million); Metrodata will create a portal site, Internet service and business-to-business e-commerce worth no less than $2.5 million; and Lippo Life will expand business to Internet and e-commerce businesses.

Indra said it was a very good decision for companies interested in the Internet and e-commerce sectors to immediately establish their infrastructures and embark on the business.

"One of the keys to success in Internet business, besides the prerequisite excellent infrastructures, is to be there earlier than your competitors," he said.

"Internet, e-commerce is a very competitive business and a zero sum game -- either you are in the business or out of it completely," he added.

Indra said the more Internet and e-commerce services established in the country, the more people would be aware and interested to utilize services to ranging from booking a cinema ticket to purchasing a cellular phone.

However, Indra warned it was possible that the predicted increase in e-commerce users would not be achieved due to the fact that Indonesia was still lacking in telephone lines and computer access.

Data from state-owned telecommunications company PT Telkom at the end of September last year showed there was only 5.94 million fixed lines available for Indonesia's population of over 200 million.

Whereas only about 250,000 of approximately two million computer users in Indonesia last year actually possess computers in their homes.

Risa Merdekawati, executive director of the Indonesian Telecommunications Society, said e-commerce, especially the business-to-customer, was actually still at early phase of development in Indonesia since the facilities were mainly used for product display, information and orders, while payment for the commerce was still person-to-person.

"No total e-commerce system is in place yet because banking settlement to enable direct and secure credit card payment through the Internet has not yet been established," Risa said.

She estimated that business to business e-commerce would continue to dominate the service due to the lack individual involvement. It would be easier for companies to benefit from e-commerce in business deals with other companies because business entities generally have similar access to the prerequisite infrastructures, she said.

Both Indra and Risa agreed that in order to maintain the current healthy growth of Internet and e-commerce use, the government and Internet industry must further promote not only the awareness but also access to computers.

They said the number of Internet and e-commerce users would increase to balance the supply of services only if there were adequate and affordable access to telephone, computers and Internet services. (cst)