Consumers likely to pay lower interconnection charges next year<\/p>\n
Anissa S. Febrina
\nThe Jakarta Post\/Jakarta<\/p>\n
Trying to keep his phone bill as low as possible, Fajar, a 25-
\nyear-old police officer stationed in Semarang, Central Java, has
\nto subscribe to two different cellular service providers.<\/p>\n
\"My girlfriend (in Jakarta) uses Telkomsel and I have to pay
\nmore whenever I call her using my first number (provided by a
\ndifferent operator),\" he said.<\/p>\n
So he subscribed to Telkomsel too, for love ... and for money.<\/p>\n
\"By subscribing to the same operator, I can significantly save
\nevery month. But it's not comfortable carrying two cell phones
\nall the time,\" said Fajar.<\/p>\n
Well, there's good news for him and other telecommunications
\nconsumers: interconnection costs will be lower starting Jan. 1,
\n2006, although the largest telecommunications firm, PT Telkom,
\nhas yet to sign up to the proposed new charges.<\/p>\n
Currently, a Telkomsel cellular subscriber, for example, pays
\nRp 813 (8 U.S. cents) for a one-minute local call in Jakarta to a
\nfellow Telkomsel subscriber. But the charge is higher at Rp 938
\nper minute if the call is made to a non-Telkomsel subscriber,
\nwith the difference being the interconnection cost.<\/p>\n
Interconnection is a system that enables a telephone user of
\none network operator -- be it fixed-line or cellular, local,
\nlong-distance or international -- to call a person on a different
\nnetwork.<\/p>\n
The Ministry of Communications and Information's directorate
\ngeneral of posts and telecommunications is designing a new cost-
\nbased interconnection charge formula with the help of the
\ntelecommunications regulator (BRTI) and European
\ntelecommunications consultant Novum.<\/p>\n
\"The draft is ready, but Telkom is still objecting to the
\norigination cost formula. We hope this will be settled before the
\nstart of next year,\" said BRTI member Suryadi Azis on Tuesday.<\/p>\n
He said the different charge formulae could result in lower
\nrevenues for Telkom, the parent company of Telkomsel. Telkom's
\noperations director Garuda Sugardo refused to comment.<\/p>\n
According to the BRTI, the new regulation would not affect
\noperators' incomes. In fact, it would make a positive
\ncontribution as consumers would make more calls if the costs were
\nlower.<\/p>\n
Interconnection calls contributed 48.7 percent to Telkom's Rp
\n11.24 trillion revenue last year. Of the total of 11.2 billion
\nminutes of interconnection, 95 percent came from cellular calls.<\/p>\n
Meanwhile, the second largest telecommunications company, PT
\nIndosat, received Rp 707 billion from interconnection fees, or
\nonly 7 percent of its total revenue in 2004.<\/p>\n
Previously, telecommunications service providers applied the
\nrevenue sharing approach, by which charges were set through a
\nbilateral agreement among operators. This led to domination by
\nthe incumbent operators with larger networks and subscriber
\nbases.<\/p>\n
Samuel Tarigan from the Telematics Policy Research Group said
\nthat the high interconnection charges set by the incumbent
\noperators could serve as a barrier to entry on the part of new
\noperators.<\/p>\n
With the cost-based method, the government will decide on a
\nformula based on the cost that an operator bears in providing
\ninterconnection for other operators.<\/p>\n
It would also create the sort of perfect-competition market
\nstructure applied in developed countries such as Australia,
\nCanada and the United States.<\/p>\n
The lower charges would result in lower costs that consumers
\nhad to pay in making calls, both fixed-line and cellular, to the
\noperators.<\/p>\n
\"We are intensifying the process and hope it will be made
\nofficial as soon as possible,\" communications minister Sofyan
\nDjalil said.<\/p>",
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"sponsor": "Okusi Associates",
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