When we log onto the Internet, we take a lot for granted. We assume we will be able to browse OTT India any website we want, whenever we want, as many times as we want, at the fastest speed, whether it’s a corporate or a mom-and-pop site. We assume that we can use any service we like – watching online videos, listening to songs or podcasts, sending instant messages – anytime we choose. What makes all these assumptions possible is Net Neutrality.
Telecom operators/ISPs are access services providers, and can control either how much you access, what you access, how fast you access and how much you pay to access content and services on the Internet.
Net neutrality is the principle that Internet Service Providers (ISPs/Telcos) and government should treat all data on the Internet equally, should give their customers equal access to all lawful websites and services on the internet, without giving priority to any website over another.
This means Net Neutrality is about:
• All sites must be equally accessible
• No telecom-style licensing of Internet companies
• No speeding up of specific websites
• No “zero rating” or making some sites free over others.
Why there is Sudden Buzz and debates about Net Neutrality in India
• Telecom companies have lobbied to TRAI (Telecom Regulatory Authority of India) and are trying to bring regulations into the usage of Internet, putting at stake our freedom to choose & privacy.
• If this happens in India, our ISPs will decide which website or app we will be given access to and how much we’ll have to pay for accessing each website/app.
• If you are an app publisher or a website owner, you’ll have to pay to each ISP to make your app/website visible to the people on their network.
For Ex: In an Airtel network, Airtel may ‘charge’ us to use WhatsApp while Hike Messenger will be free to use since Hike is an Airtel product.
With the rise of wireless broadband, the debate intensified and created major differences in perspectives. While the debate is going on globally, India’s TRAI has sought recommendations (for the first time from the general public, and not just the industry) by circulating a consultation paper on Regulatory Framework for Over-the-top (OTT) services, seeking comments from the public. The buzz about Net Neutrality increased when Airtel, India’s leading telecom carrier, launched “Airtel Zero”, a platform designed for partnering with various internet-based companies in order to generate revenues. There has been significant furore in the public domain and a campaign against Airtel Zero, leading to the company’s withdrawal of the program.
One of the main reasons the Internet has been so successful is that people have generally been able to use it according to their wish. It’s important for access to knowledge, services and free speech, as well as freedom and ease of doing business online, for this access to be neutral. Internet service providers (ISPs) can’t restrict the best access or pick winners and losers in the online marketplace for services and ideas. The worst thing policy makers could do to the network would be to allow telecom companies to mess with that. Rather, they should focus on what it will take to make broadband accessible for everyone.
Indonesia is the world’s fifth largest telecom market in terms of cellular subscribers after China, India, USA and Russia. It is also one of the fastest growing markets in the world with total number of cellular subscribers increased from 163.7mn in 2009 to 262.3mn in 2012. Indonesia’s large population (fourth largest in the world) and steady economic growth have supported strong demand for telecom services in the country.
Telecom services in Indonesia have been provided by a succession of state-owned companies since 1961. The Indonesian Government, through the Ministry of Communication and Information Technology (MOCIT), has extensive regulatory authority and supervisory control over the country’s telecom sector. While the government has historically maintained a monopoly over telecom services in Indonesia, reforms initiated since 2000 have attempted to create a regulatory framework to promote competition and accelerate infrastructure investment in telecom facilities.
The cellular market in Indonesia is currently dominated by three major operators: Telkomsel, Indosat, and XL Axiata. Together they hold about 94% market share in the Indonesian cellular industry. These operators primarily offer cellular services using GSM technology. Starting in 2002, the Indonesian government issued new cellular licenses for using CDMA technology to Mobile-8 and fixed wireless access services licenses using CDMA technology to Telkom, Indosat, and Bakrie Telecom. There are also other smaller players in the Indonesian cellular market, such as HCPT, Axis, Smartfren and STI. Competition in the industry is based primarily on service quality, pricing, availability of data services and value-added features such as voice mail and text messaging.
Since its introduction in 1998, prepaid service has been popular in Indonesia, because it permits customers to register for wireless service without undergoing a credit review. Prepaid service also gives customers more control over monthly expenditures. SMS has proven to be popular in Indonesia, particularly on the prepaid platform, as it provides a convenient and cost-efficient alternative to voice and e-mail communications. The contribution from data services to industry revenues is growing steadily. This is in line with the trend of increase in people’s need for data supported by cellular phones with internet capabilities and growing use of value added services such as over the top services (OTT services like Skype, Viber, WhatsApp, etc.), IP Messaging, and Cloud services.
Cellular penetration in Indonesia has increased above 100%, indicating the industry is gradually maturing. However, this rate is still below as compared to some of the other Asian countries like Thailand, Malaysia, South Korea, Singapore, and Hong Kong, indicating some more growth potential is left in the industry. Industry growth going forward is expected to come from regions outside Java, where the cellular penetration rate is still low. In addition to the growth in core markets, there are sizable emerging segments of strong growth, primarily in the consumer broadband and mobile towers segment. Indonesia’s cellular industry and demand for wireless telecommunication services are expected to continue grow as Indonesia develops and modernizes. As such, stocks and bonds (mostly high yield bonds due to sovereign rating cap) issued by Indonesian telecom companies offer good investment opportunities for global investors.