Phone rate hike could create monopoly in Internet sector

Phone rate hike could create monopoly in Internet sector

Dewi Santoso, The Jakarta Post, Jakarta

The government's recent phone rate hike decision, which was aimed
at ending the monopoly in the fixed line telecommunications
sector, could create a monopoly in the internet sector, a
monopoly watchdog has warned.

"The recent phone rate increase will leave Telkom in a
position to monopolize the internet sector," Business Competition
Supervisory Commission (KPPU) director Murman Budijanto said on
Tuesday.

The government last week decided to allow fixed line operators
to raise local telephone rates by up to 28.21 percent.

The new local call rates affect all internet service providers
(ISPs) except TelkomNet Instan as it uses a port wholesale (PWS)
dial-up service.

TelkomNet is a subsidiary of state-owned PT Telkom, the
country's largest fixed-line operator.

PWS dial-up services use the numerical prefix 0809 and cost a
total of Rp 9,900 (US$1.15) per hour, consisting of a PWS fee of
Rp 6,600 per hour, plus a connection fee of Rp 3,300 per hour.
Currently, 48 percent of internet services are provided by
TelkomNet Instan.

Telkom has the authority to facilitate internet providers with
the PWS dial-up service.

Murman said that the low rates of TelkomNet Instan would
entice customers to select it as their provider.

He criticized the government's decision to allow Telkom to
raise phone rates, saying that it was apparently made based only
on the interests of Telkom, and without considering the interests
of other businesses.

Telecommunications expert Roy Suryo agreed with Murman, saying
that the recent phone rate hike would only benefit Telkom.

Data from Information & Communications Technology (ICT) Watch
show that non-PWS ISPs have to charge their customers Rp 11,500
per hour (including 10 percent tax), which consists of a
connection fee of Rp 3,300 per hour, plus local call rates per
hour.

"Internet users will eventually turn to TelkomNet Instan,
further strengthening its already dominant position," said Roy.

Data from the Indonesian Internet Providers Association (APJI)
shows that 93 percent of internet users use dial-up services. Of
these, 48 percent use TelkomNet Instan as their ISP provider and
45 percent use other providers such as CBN, Centrin, Radnet and
Indonet. The remaining 7 percent use non-dial-up services, such
as cable, lease-line and wireless.

APJI secretary general Heru Nugroho had earlier demanded that
Telkom open up PWS services to all internet companies.