Expensive communication

I find it amazing that it is so expensive to make a call to Indonesia from Malaysia. It's even more expensive than a call to the U.S. -- which takes about 10 more times to travel to (20-hour vs. 2-hour flying). It's MYR 1.80 (~USD 0.50) for a minute to Indonesia, while it costs only half of that to call the U.S. (Telekom Malaysia's (TM) rate)

Of course, there are other countries with more expensive calling rate. Like India at MYR 3.50 a minute. Or Cuba at MYR 5.00 a minute.

The calling rate from the U.S. is no different (except it's cheaper). A call to Indonesia from the U.S. costs USD 0.35 (AT&T) or USD 0.12 (Vonage). A minute to Malaysia is USD 0.22 (AT&T) or USD 0.06 (Vonage). India is USD 0.34 and 0.17 with AT&T and Vonage respectively.

Why is it so expensive to call Indonesia - more expensive than to call Malaysia?

One explanation is monopoly (or duopoly or triopoly, for that matter). But if this is the case, I don't think Malaysia is much different. In fact, TM is probably the only international call carrier in Malaysia.

Or higher initial investment required. The main telecommunication infrastructure difference between the two countries is Indonesia requires more across-islands connection, while Malaysia is pretty much two big areas (West, or peninsular, Malaysia, and East Malaysia). This will also require higher maintenance costs.

Another explanation is high operations costs due to older networks. Though this seems to be a good explanation, I don't have any intelligent information.

It could also be higher operations costs due to other reasons. Like poor efficiency. Or inflated costs. Or pungli. And so on (corruption too).

Or is it merely one of the government's cash cows?

Not to say that these things don't happen in Malaysia. It's just probably not as bad (so the rate can still be lower).

But, with Malaysian telecom companies entering Indonesia (Telekom Malaysia acquired Excelcomindo and Maxis took over PT Natrindo Telepon Seluler), will this change? It's not directly linked to international call rate or settlement rate, but there might be hope.