Government pledges to limit phone hike to 28.74%

Government pledges to limit phone hike to 28.74%

JAKARTA (JP): The government guaranteed on Monday that the
planned increase of fixed telephone call rates in Jakarta and its
surrounding area would be limited to a maximum of 28.74 percent.

Minister of Communications Budi Mulyawan Suyitno said the plan
to adopt a single tariff system in the capital would be dropped
so that increases of up to 167 percent, as proposed in the new
tariff structure, could be prevented.

The change in the proposed single tariff system will be one of
the most important issues to be reviewed by the government, he
said in a press conference held to appease criticism over the
government's new telephone rates.

The government planned to increase telephone rates by an
average of 21.67 percent this week. However, implementation has
been delayed due to controversy over the use of a single tariff
system in the capital.

The new system has sparked protest because the increase in
call rates during working hours reached as high as 167 percent,
far higher than the 21.67 percent average approved by the House
of Representatives.

The government and state-owned telecommunication company PT
Telkom earlier acknowledged that the rise in call rates within
Jakarta would reach as high as 167 percent during peak hours.
They argued, however, that the average overall tariff increase
would remain at 21.67 percent because the change to a single
tariff system would be followed by a sharp drop in call rates at
certain distances.

The existing tariff structure for Jakarta is based on a
multiple tariff system in which a call is calculated based on the
distance between the caller and the recipient, the duration of
the call, and the time of the call.

The single zone tariff would eliminate consideration of the
distance and time of the call in the calculation and set a single
charge of Rp 150 a minute for all calls within the 021 area code.

Therefore, at a certain distance, calls that would now cost Rp
56 a minute would cost Rp 150 a minute under the new tariff
system, amounting to an increase of 167.86 percent.

"We will review the level of the tariff, the duration, and
also the time frame, so that it will not be higher than 28.74
percent," Telkom director of operations and marketing Komarudin
Sastrakoesoemah said.

He said that the review would consider the possibility of
retaining the single zone but vary the cost of calls depending on
the time frame -- peak hour and non-peak hour.

"So, there may be certain times in which we provide a cheaper
social rate for example," Komarudin explained.

Without setting a definite deadline, the recently appointed
Minister of Communications said that the revised tariff would
only be implemented once a compromise had been reached between
the government and representatives of the public, including the
Indonesian Consumers Agency (YLKI) and the House of
Representatives.

"A time limit is not our priority. It would depend on how
effectively we publicize the new hike," Budi said. (tnt)