29 Juni 2009 How to make Telkom remain competitive

Protus Tanuhandaru
Jakarta

The Jakarta Post – As broadband networks become increasingly available in Indonesia, it is now possible for a Voice over Internet Protocol (VoIP) network to be implemented as a national telecom, provided the state telecommunications company, PT Telkom, integrates VoIP into its Public Telephone Service Network (PSTN) system (the traditional telephony).

VoIP allows Internet users to make calls over the Internet at a lower rate than conventional long distance and international calls. Because of the lower cost, VoIP users can save a considerable amount on communications and can thus make not only more, but also longer calls. In business this would mean more opportunities for transactions that could result in higher sales, which in turn will boost the growth of businesses that turn to VoIP.

This dynamism is shown by the substantial number of companies adopting VoIP as their main communication mechanism. According to VoIP Rakyat (VR), Indonesia’s free VoIP provider, corporate customers account for 7 out of every 10 users. There are more than 70,000 user registered with VR.

Now imagine what would happen when the PSTN is “completely” interconnected with VoIP, allowing all Telkom’s customer to dial – and receive calls from – PSTN through VoIP.

This increased interconnectivity would have a significant multiplier effect on the economy, increasing business activity and contributing to economic development.

But this is unlikely to take place as long as such interconnectivity in Indonesia is difficult for VoIP providers to establish. Obtaining the license required for becoming a VoIP provider might be free, but the process is not easy.

Candidate providers are required to pass an operational acceptance test, in which it needs to demonstrate that its equipment is up to standard and is capable of performing at the level expected by the Communications Director General.

The process, although important, can be time-consuming and requires VoIP providers to make costly initial investments in equipment without any guarantee they will actually be able to operate.

This uncertainty means providers must think twice about investing in this business.

This is worsened by the fact that theses providers operate independently, prohibiting their respective users from communicating with one another. Without such interconnectivity VoIP services are not appealing to most users. This further discourages investment in VoIP providers in Indonesia.

So what is needed is VoIP implementation on a national scale; a task that only a company the size of Telkom could carry out. But Telkom seems reluctant to do so, as it seems to have the misconception that once such a network is establish it would lose profits.

However, Telkom has in fact already begun losing its market share, particularly in long distance and international calling, precisely because it has not implemented a VoIP network. Simply put, as more Telkom subscribers turn to VoIP, the less dependent they are on PSTN.

As a state company, Telkom is liable to its shareholders and obliged to improve its performance by adopting the best technologies available to avoid the potential risk of being outdone by other competing companies. Now that such a technology is available, Telkom has but to consider the viability of becoming a VoIP provider. There is no reason for Telkom to withhold the pilot of the implementation.
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The writer is the program officer
for the One Destination Center, an
NGO concerned with information
Technology issues.