Indonesia Struggles to Make Internet More Affordable, Available

By Trish Anderton Jakarta 31 July 2007

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Indonesia says it is working to make high-speed communications more affordable and available by increasing competition in the marketplace. Trish Anderton reports from Jakarta.

Acehnese women study computer at a class in Banda Aceh, Indonesia, 7 Mar. 2005 (file photo)

Indonesia's new communications minister, Muhammad Nuh, says the price of Internet service in the world's fourth most-populous country is too high. He blames that partly on companies taking excessive profits, and partly on a lack of direct connections to the outside world.

There are only two telecommunications hubs linking Indonesia to other countries, he says, which makes it a less attractive market for investors. Nuh plans to address that by establishing new connections with Australia, Malaysia and the Philippines. He also hopes to recruit more companies to establish operations in the country.

"We have two policies. We invite foreign investors to establish the industry telecom here. Not only trading, but invest here. And also we empowering the domestic industries for the telecom," he explained.

The ministry is installing 10,000 kilometers of fiber-optic lines by next year, creating a new network that would connect several of the country's major islands. It is also urging state-owned companies to share their fiber-optic lines, reducing the need for new infrastructure.

According to the website InternetWorldStats.com, about 20 million Indonesians use the Internet. That is only about nine percent of the population, as opposed to 16 percent in the Philippines and 48 percent in Malaysia.

Many rural Indonesians lack access to even more basic communications. About 38,000 villages have no phone lines. Nuh says he hopes to rectify that situation too by next year, setting up data-ready voice lines that will one day also provide internet to a central location in each village.

"The system itself, the equipment, should be complying with the data. Because after that, we will set up what we call CAP, the community access point. The CAP is to be the Internet in the village," he said.

Lack of competition may not be the only factor limiting Indonesia's communications growth. Last month, the country's Business Competition Supervisory Commission said it had uncovered evidence that two large cell-phone service providers may be colluding to keep other companies out of that market. Nuh said he could not comment on the allegations.