Government to raise domestic phone rates

Government to raise domestic phone rates

JAKARTA (JP): The government will raise the rates of domestic
phone calls by at least 24 percent beginning Feb. 1 to allow for
increasing operating costs, a senior government official said on
Wednesday.

The director general of post and telecommunications at the
Ministry of Communications, Sasmito Dirdjo, said the ministry
would announce next week the amount of increase for local and
domestic long-distance calls as well as the monthly rental fee.

"I can't disclose the increase now because we still have to
have further discussions with our superiors, but the rise will be
in the vicinity of 24 percent," he announced at a breaking of the
fast ceremony.

He said the rate increase was crucial to help state-owned
domestic telecommunications firm PT Telkom maintain its service
in the worst-ever economic crisis.

"We understand that the crisis has made things harder for
everyone these days, but we do need to ensure that our
telecommunications operator can run its service," he said, adding
that the plan to increase rates had been deliberated since
October.

On Tuesday night, PT Telkom president Asman Akhir Nasution
said his company had proposed a 30 percent to 42 percent rate
increase for local phone calls to cover increasing operating
costs caused by the rupiah's 70 percent fall against the U.S.
dollar.

Nasution said the rupiah's collapse had pushed up the cost of
installing new telephone lines and of maintaining existing ones,
leaving no other way but to increase the rates.

The cost to establish a telephone network is about US$1,000
per line, while Telkom charges a Rp 250,000 ($33) connection fee,
he said.

The company charges a monthly line rental of Rp 20,500,
compared to the monthly Rp 44,000 it cost to maintain a phone
line before the crisis, he said.

Telkom proposed raising its rates in October and urged the
government to approve the increase effective this month, he said.

However, Telkom's proposal was rejected by the House of
Representatives, which insisted that a 30 percent to 42 percent
was too high an increase during the crisis.

The legislators, instead, suggested a maximum 24 percent
increase.

Legislator Burhanuddin Napitulu of House Commission IV for
telecommunications said a 42 percent increase was unrealistic at
a time when most people were struggling to make ends meet.

"At a time when the national economy has yet to stabilize, we
cannot raise the rates by 42 percent. It would burden the people,
so we decided on a 24 percent rise," he said.

The intracity call rate is currently Rp 145 per pulse, while
domestic long-distance calls cost Rp 112 per pulse. One pulse is
either 1.5, two or three minutes, depending on the distance and
time period. (das)