WiMAX may send Internet rates plunging

The Jakarta Post, Jakarta | Mon, 09/28/2009 1:11 PM

The Indonesian Internet Service Provider Association (APJII) predicts the country's Internet tariffs may drop by between 40 percent and 50 percent after WiMAX (Worldwide Interoperability for Microwave Access) tech-nology is introduced to the market next year.

APJII supervisory council member Sapto Anggoro told The Jakarta Post on Sunday that Inter-net tariffs would drop because of improved services by Internet service providers, compared to the number of potential users in the country.

The Ministry of Communications and Information spokesman Gatot S. Dewa Broto shares similar views on the likely fall in national tariffs, saying that WiMAX will provide better data access, and increase competitiveness among Internet service providers.

WiMAX technology, expected to be operational early next year, is an advanced telecommunications technology providing wireless transmission of data using portable and fully mobile Internet access.

It provides high-throughput broadband connections over long distances without having to build costly infrastructure and large numbers of transmission towers.

The technology, which provides an alternative to cable and Digital Subscriber Lines (DSL), can cover up to 50 kilometers in radius from each base station, and has relatively low-investment costs compared to existing 3G technologies.

Sapto said the current technology with lower frequencies than WiMAX, like 3G, resulted in services mostly tagged at about Rp 150,000 (US$15) per month, while non-3G-Internet services, like Speedy from Telkomsel, provided a cheaper subscription tariff at Rp 75,000 for a maximum 15 hours per month.

APJII data says there are 25 million Internet users in the country out of a population of 240 million.

Sapto said the eight winners of the WiMAX tender, announced on July 31, were expected to provide competitive tariffs compared to the current Internet subscription prices.

"WiMAX will be one of the best alternatives to existing internet access," he said, adding that the bidding prices set for the WiMAX tender would influence consumer tariffs.

PT Indosat Mega Media, who won the tender for the West Java zone, also acknowledged that it would charge tariffs based on its bidding price. Indosat won the West Java zone, tendering at Rp 18.4 billion.

"We are going to discuss further about ranges of tariffs with other winners to provide our customers with competitive pricing," said Indosat marketing director Guntur S. Siboro.

Gatot said the government set the bidding prices based on ranges of strategic rates for the WiMAX target market zones. Banten and Jakarta's consumer tariffs would be the highest, as their bidding prices were the highest compared to other zones, he said.

PT Telekomunikasi Indonesia (PT Telkom), one of the winners of the WiMAX tender, said Maluku was expected to have the lowest consumer tariff due to the lowest level of bidding prices.

The Indonesian Telecom-munication Regulator Agency (BRTI) member Heru Sutadi said WiMAX would serve as an alternative option to existing Inter-net services and help to provide more affordable data services, whilst also providing wider network availability.