Government denies phone call price rise

Government denies phone call price rise

JAKARTA (JP): The government said yesterday it would not raise
telephone call charges later this year or early next year.

"What we are currently discussing is the new structure of
interconnection tariffs between public switched telephones and
cellular telecommunications," Director General of Post and
Telecommunications Djakaria Purawidjaja said at his office.

He said local, long distance or cellular call charges would
not increase by next year.

Earlier reports said the state-owned telecommunications
provider PT Telkom planned to introduce new tariffs next January.

According to a prospectus issued before its initial public
offering in October last year, Telkom will evaluate telephone
call tariffs yearly.

Director of Telecommunications Affairs, Eman S. Sumantri, said
yesterday the current trend for global telecommunication tariffs
was "downward".

"There are several factors, which could affect telephone call
tariffs, such as the performance of the operator and the
country's inflation rate," he said, adding that a higher
inflation rate in one country would push up call tariffs.

The country's cumulative inflation rate in the first 10 months
of this year was 5.35 percent, compared to 7.34 percent for the
same period last year. The inflation rate is estimated to fall to
7 percent this year from 8.64 percent last year.

Local call tariffs are set at Rp 110 for every two or three
minutes depending on distances and time periods. Long distance
calls are set between Rp 237.5 and Rp 2,062.5 a minute depending
on zone divisions and time periods. Mobile cellular
telecommunications tariffs begin at Rp 330 a minute.

Djakaria said yesterday the planned new interconnection tariff
structures would be introduced soon. "But it depends on the team
which compiles the structures."

Second offering

In a related development, Djakaria and Secretary-general of
the Ministry of Tourism, Post and Telecommunications Jonathan L.
Parapak refused to confirm that Telkom would launch its second
offering early next year.

According to reports, the government will divest 15 percent of
its shares in the company in the second offering.

PT Bahana Sekuritas has been appointed to manage Telkom's
second offering domestically, according to the reports.

Telkom floated 19 percent of its 9.33 billion shares on the
New York, London, Jakarta and Surabaya stock exchanges last year,
raising Rp 2.3 trillion ($974.5 million) from the domestic
offering and $519.1 million from the overseas offering.

The company's initial public offering price was Rp 2,050.
Yesterday the shares closed Rp 150 lower at Rp 3,800 at the
Jakarta Stock Exchange. (icn)