Government delays plan to raise telecom rates

JAKARTA (JP): The government has delayed its plan to increase the rates for fixed-line and cellular telephone calls by 21 percent and 41 percent respectively.

Director General of Posts and Telecommunications Sasmito Dirdjo said on Wednesday the new tariffs could not be implemented in July as previously scheduled because the government had not had the chance to discuss the matter with legislators.

"The new tariffs can't be implemented this month because we haven't discussed it with the House, they're very busy. I don't know when we can meet, but I hope soon after they're done with the General Session (in August)," he said on the sidelines of an e-commerce seminar.

The government earlier said it would increase by mid-July the rates for fixed-line telephone calls by 21 percent to Rp 226 per three minutes from the current Rp 187 per three minutes.

Meanwhile, the cost of using a cellular phone was to increase by 41 percent to Rp 475 per minute from the current Rp 325 per minute.

The government also has plans to further hike the rates for fixed-line telephone calls by between 15 percent and 18 percent in 2001 and eight percent in 2002.

The government reviews the rates for fixed-line telephone calls, which are provided by state-owned listed telecoms company PT Telkom, every year. It raised Telkom's rates by 15 percent in February last year.

Telephone tariffs, except those for prepaid-cellular services, are controlled by the government. A rise in telephone tariffs should first be consulted with the House before being introduced.

Sasmito acknowledged that some members of the House had informally expressed their disagreement with the planned tariff increases.

The government would, however, go ahead with the planned tariff increases even if they were opposed by the House during the upcoming consultations.

"We won't change it. The proposed new tariffs have been discussed with various parties including operators and the consumers' foundation, it's totally acceptable," he said.

He added that the increase in rates for fixed-line telephone calls was very important to help Telkom cope with rising operating costs as well as to make the country's telecommunications sector more attractive to investors.

"Our telephone rates are among the lowest. With such rates, it's difficult for Telkom to install the new lines that are needed by millions of people who still haven't got any access to telephones," he said.

Telkom currently operates about 6.18 million active telephone lines across the country, which has a population of over 200 million people.

Sasmito said the increase in telephone rates was also unavoidable since it was, in fact, among the items agreed with the International Monetary Fund (IMF) under the Letter of Intent.

According to the agreement with the IMF, Indonesia should have implemented the new tariff policy in March, he said. "We're way behind schedule." (cst)