Telkom reacts `childishly' to govt delay<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
President of state-owned telecommunications giant PT Telkom
\nKristiono said the delay of phone charge increases would limit
\nthe company's ability in developing fixed lines and providing
\ntelephone services to more people in the country.<\/p>\n
\"Of course it will automatically affect (the fixed-line
\ndevelopment) because the intention of the higher rate is for
\npenetration,\" he was quoted by detik.com as saying on Thursday.<\/p>\n
As of Sept. 30, Telkom had around 7.6 million telephone lines
\nacross the country and planned to invest around Rp 3 trillion
\n(US$337.1 million) to build some 750,000 more lines this year.<\/p>\n
The government raised phone charges by an average of 15
\npercent earlier this month as part of the government's three-year
\nplan, demanded by the International Monetary Fund (IMF), to crank
\nup phone charges by 45.49 percent in a bid to boost investment in
\nthe country's fixed line telecommunications sector. However, as a
\nresponse to public outrage, the government agreed on Wednesday to
\ndelay the increase.<\/p>\n
Telkom raised phone charges by an average of 15 percent in
\nJanuary last year.<\/p>\n
But independent telecommunications expert Roy Suryo criticized
\nKristiono's statement as \"childish,\" saying that as a virtual
\ntelecommunications monopoly, which reaped huge profit last year,
\nTelkom has an obligation to develop fixed lines in the country.<\/p>\n
\"Telkom has always been asking for its rights before it
\ncarries out its obligations ... This is childish,\" he said.<\/p>\n
Telkom's net profit in the first nine months of last year more
\nthan doubled to Rp 7.57 trillion, although it was greatly helped
\nby capital gains from the sale of a stake in cellular phone unit
\nPT Telkomsel.<\/p>\n
Roy said that the delay in the rate increase would only cause
\nthe company to lose some Rp 75 billion in potential revenue,
\nwhich was \"peanuts\" compared to its overall profit.<\/p>\n
He said that with such huge revenues, Telkom should have a
\nsufficient cash flow to continue its investment program.<\/p>\n
He added that Telkom should pursue a strategy of efficiency so
\nthat the cost of installing fixed lines could be lowered, and
\nthus would not have to put so much burden on its customers.<\/p>\n
\"Telkom has not always been transparent,\" he said.<\/p>\n
Suryo said that there must be an independent regulatory body
\nwhich could provide sanctions to utility companies like Telkom if
\nit failed to deliver.<\/p>\n
Elsewhere, Kristiono said in an effort to bring in more
\ncustomers, the company would reduce the installment cost of each
\ntelephone line to US$160 to $200 from around $300 (currently
\naround Rp 2.7 million) last year.<\/p>\n
He claimed the company would strive to boost its revenue this
\nyear by increasing efficiency and cutting operating costs.<\/p>",
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