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Telecentre article

Telecentre startup in Indonesia

With regard to economic situation in Indonesia, I want to share you some experiences in having a telecentre startup in Indonesia. I have started a telephone kiosk with two booths only to serve local community in my area two years ago, this is called a 'wartel' in 'bahasa Indonesia' (short of 'warung telekomunikasi) and served as a communication hub for the local community.

Acquisition of telephone lines required three-four months after applying to local telco because there was no wire distribution although the numbers were available. The wartel was finally open in September 1998 after investing some money to buy the wartel equipments (computer, printer, booths, table, chairs etc.). The space was only 3 times 4 sqm which is adequate.

The wartel is doing well but with a mere income of 300USD monthly gross until Februari 1999 when telecom tariff had been increased up to twenty percents with lot of protests from the people but the wartel had gained since. The tariff increment and a new sharing agreement with telephone company (telco) was giving an additional income to the wartel owner/operator according to micro-enterprise (ME) standard of 300-500USD monthly gross income per household. The wartel has become sustainable during the economic crisis.

Since the beginning stage of the wartel, no one would care to lend some money, not even the banks. At that time the cost of lending money went up to 55% interest rate per annum. Wealthy people will go eating in big restaurants or go to shopping malls instead of doing something to the micro-enterprises. Banks were going to collaps on giving big interest payments instead of lending money to new enterprises. I found out also that the banks will only give loans to existing and sound business only, not to startups.

The wartel system is really giving a chance to survive for the micro-enterprises because there is market available ie population, easy to use telephone system, people love to talk, telephone charge is a no problem solution for having communication between the vast distances in Indonesia. During 1999 there were more than six wartels in our area (we were not the first to open a wartel).

The telco is also giving a chance in helping the minority by lessening the regulation to open wartels in 1999. Therefore the system of wartels have grown fast enough since 1999. There are more than 70 vendors of wartel equipments, 35 of them certified by RISTI of PT Telkom. Most wartels are owned by the vendors themself. Some of them have a chain of 20 wartels using their own equipments. Remember the charging system of telephone cost in Indonesia is based on duration of calls and distances. The vendors produce telephone pulse metering system to be used in the wartels.

That's why the telephone business is having its peak during the economic crisis which is good for the wartels operators and also good to the telco who origins the system.

The MEs seldomly go to telco company for opening a wartel, instead they go to the vendors and of course the vendors are willing to file their request based on supplying equipments to the candidate wartel owners. There is no restriction on having telephone lines from the telco but if an ME goes to telco then he will be asked to buy the wartel equipments from one of the vendors certified by RISTI of PT Telkom.

So the request will be filed until he buy and give a proof of wartel equipments bought from one of the recommended vendors.

Telecentre startup: putting terminals for internet

The next stage of wartel to become a telecenter is to extend the facility by putting a PC terminal to connect to the internet. At least one PC terminal can be used for internet connection. The PC is a common equipment to use but the internet is still new. The wartel can use 386 or 486 computers but the internet should have at least pentium processors. Somehow the teaching on using the internet are still needed.

The ME can start with one terminal PC inside the wartel, an additonal line, and a modem when there is space available. If more space avail then additional PC terminals can be added to form the 'warnet' (warung internet), an indonesian way of telling internet café. For more than one PC, we have to put internet sharing devices such as network cards, cables, a server, an optional network hub and sharing software. Sharing internet connection to several PC terminals is no mystery nowadays.

To become sustainable the warnet should have at least five PC terminals with a possible income of 1000USD gross per month with an 18 months payback period for the initial investment. The main reason for an ME to go into internet café business is the growing interest of using the internet as the statistic shows.

Warnet population in Indonesia is gaining, for example in Yogyakarta - central Java, there are at least 60 warnets with full blown technology deployed. The exact numbers are not known but I could guess there are about 500 warnets in Indonesia at this time ranging from Sumatera
(Medan), Java (Jakarta, Bandung, Bogor, Yogyakarta, Semarang, Solo, Surabaya, Malang), Bali (Denpasar), Kalimantan (Banjarmasin, Balikpapan, Pontianak), Sulawesi (Menado, Makasar) and Irian Jaya (Jayapura, Sorong). Most of them initiate as a warnet and not as a wartel.

The telecenter approach will come again when we can use the internet to make voice calls using the VoIP technology. The warnet will also include possible telephony system using the internet as the carrier. The VoIP (Voice over IP) is to be implemented as back office system to provide lower rate of long distance call for the telecentre.

A telecenter startup can have telephone facility, internet connection, a possible business center, a postal service and further services for the local community. We don't put food distribution or health service in telecenter but we can bring some information on food distribution or health advice and other thing that could benefit the local community. The telecentre is built as a telecommunication hub with internet access to provide better quality of life for the community.

Once the internet connection is obtained then one can do browsing, send emails and other things such as homepage design, moderate mailing lists, and doing e-commerce on the web. Therefore we can make a standard of a telecentre startup and business models for telecentre sustainability.


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