Cell phone operators may get consent to raise airtime rates

JAKARTA (JP): Local cellular telephone operators might soon be able to raise airtime rates after nearly six months of delay, House Commission IV for telecommunications, tourism and transportation said on Tuesday.

House Commission IV chairman Burhanuddin Napitupulu said improvement in the country's economic condition over the last few months made the rate increase more acceptable.

"We will ask the Minister of Communications to immediately issue the ruling on the rate increase so that it can be soon introduced," he told reporters following a hearing with PT Telekom Indonesia, PT Indosat and PT Satelindo.

The Ministry of Communications raised the airtime rate for mobile telephones by 15 percent to Rp 375 per minute from Rp 325 in January.

However, the introduction of the new rate was delayed after the House opposed the plan.

The airtime rate for cellular telephones is set by the government based on proposals from telephone operators but the change is subject to the House's approval.

Unlike the airtime rate, operators are allowed to set their own pulse rate.

An executive in the cellular phone industry said on Tuesday, however, operators actually asked for a 45 percent increase to enable them to beat financial hardships following the depreciation of the rupiah against the dollar.

Secretary-general of the Indonesian Cellular Telephone Association (ATSI) J.W. Junardy said a significant raise in the airtime rate, the main income source of cellular operators, was necessary to offset the drop in cellular usage.

He said monthly cellular revenue per user plunged from an average of Rp 250,000 in 1997 to Rp 190,000 in 1998 and Rp 160,000 so far this year.

There are currently seven cellular phone network providers in the country, serving three systems: the Advanced Mobile Phone System (AMPS), the Global System for Mobile Communications (GSM) and the Nordic Mobile Telephone (NMT) system. They serve over 1.3 million subscribers.

Burhanuddin said the commission also planned to ask for a rate adjustment in local airfares and sea fares.

"We are going to ask flag carrier Garuda to cut its rate for domestic flights by 20 percent," he said, adding that a meeting with local air carriers was scheduled for next week.

Executives of PT Telkom, PT Indosat and Satelindo expressed their view on the government-proposed bill on telecommunications during the hearing.

The bill will, among other things, lift exclusive rights given to the three companies in providing domestic and international telecommunications service in the country.

Telkom's chief operating officer Dadad Kustiwa said Telkom supported free competition but warned that an immediate abolishment of its rights would severely hurt business.

He said Telkom would ask for compensation from the government if its rights were terminated earlier than the term stated in the existing contract.

At present, Telkom holds the exclusive rights to provide fixed local and fixed wireless telecommunications services nationwide until 2010 and domestic long distance telecommunications (SLI) services until 2004.

Indosat and Satelindo are granted exclusive rights for overseas long distance services (SLJJ) until 2005. (cst)