Telkom plans to launch VOIP service next month

Telkom plans to launch VOIP service next month

JAKARTA (JP): State-owned telecommunications company PT Telkom
said on Wednesday it would launch a new service next month to
allow customers to save money on international phone calls by
using voice over internet protocol (VOIP) technology.

The company's director of technology and planning, Kristiono,
said call charges using the VOIP technology could be 40 percent
or 50 percent less than the conventional international direct
dialing service (IDD) offered by existing IDD operators Indosat
and Satelindo.

He said the move was meant to challenge Indosat, which
recently launched a calling card which enables customers to use
the IDD service at a lower price than the rates charged for its
regular IDD telephone service.

"We can beat Indosat in this VOIP business," he was quoted as
saying by Antara news agency.

Telkom's director of operations and marketing, Komarudin
Sastrakoesoemah, said the company's offering of local and IDD
calls through VOIP did not violate Indosat's exclusive right to
provide IDD service.

Indosat and its subsidiary Satelindo hold the exclusive right
to provide IDD calls until 2004. However, the companies will lose
this right in 2003 as part of the government's plan to abolish
government monopolies in the country's telecoms sector.

"It's not like the switch-based IDD service, which can only be
provided by licensed IDD operators. It's only a value-added
service ... just a matter of taking advantage of some advanced
technology to reduce call charges," Komarudin told The Jakarta
Post on Wednesday.

He emphasized that Telkom, which was awarded the license in
principle for IDD services earlier this month, would only start
its IDD business in 2003 as regulated by the government.

He said the company would likely use its own gateway to
support the VOIP service for local calls, but had yet to decide
on a gateway for international calls.

According to him, Telkom may lease a gateway from IDD
operators Indosat, Satelindo or Singapore's SingTel, or use its
own satellite.

Kristiono said Telkom was still looking for the IDD gateway
operator that would offer it the best price for its VOIP service.

Komarudin acknowledged that Telkom and SingTel signed a
memorandum of understanding several years ago to cooperate in a
number of areas, including the VOIP service.

"But we have not made any deal on VOIP with SingTel yet,
although it may be an alternative," he said.

In addition to the VOIP service, Telkom also is preparing to
provide cellular telephone services on the GSM-1800 format,
having received a license in principle several months ago.

Kristiono said in a teleconference with investors on Tuesday
evening Telkom planned to earmark between US$100 million and $200
million in initial investment for its new cellular business.

He said Telkom would start the bidding process for vendors and
network installation was scheduled to commence next month.

"We expect to kick off commercial operation by the middle of
2001," he said. (cst)