Government will not raise telephone rates next year: Minister

JAKARTA (JP): The government will not raise telephone rates next year unless the country's economy shows a marked improvement, Minister of Communications Agum Gumelar said on Monday.

Agum said raising phone rates before telephone users had fully regained their purchasing power would only elicit sharp criticism from the public

"So there will not be a rate hike in telephone services next year," he told the House of Representatives Commission IV for telecommunications, transportation and infrastructure.

According to data from state-owned telecommunications company PT Telkom, 185,014 customers -- comprising 135,083 residential subscribers, 49,272 business subscribers and 659 social subscribers -- canceled their service in the first nine months of the year due to the economic crisis.

This figure is an improvement over the 201,201 cancellations in the same period last year.

The data further stated that Telkom and its joint operation agreement (KSO) contractors had a total of 5.69 million subscribers in the third quarter of the year, a 9.11 percent increase over the 5.22 million subscribers in the same period last year.

The country's telephone rates -- including local and domestic long-distance charges, installation charges for fixed-line telephones, monthly subscription charges and peak and off-peak hours charges -- are adjusted every year by the government based on the Price Cap Tariff Decree issued in October 1995.

According to the decree, the government decides whether to raise telephone rates and the amount of the rate increase based on recommendations from telecommunications operators, including Telkom and cellular phone operators.

For cellular phone services, the government only determines rates for regular services, while cellular phone operators have the right to set rates for prepaid services.

Director General of Post and Telecommunications Sasmito Dirdjo also said the government would not modify the existing arrangement for peak and off-peak hours, as recently suggested by Telkom.

"There is no change either in the amount or structure of the rate system for telephone services planned for next year. It may be changed only if economic conditions allow," he said.

Telkom recently proposed a change in the peak and off-peak hours arrangement for fixed-line telephones to avoid call congestion during peak hours.

Under the proposal, telephone users would be required to pay a surcharge of Rp 25 between 8 a.m. and 8 p.m.

The government, however, elected to maintain the existing 25 percent surcharge from 8 a.m. to 6 p.m.

Separately, the Indonesian Telecommunications Society (Mastel) suggested on Monday the government raise air-time charges for cellular phone usage.

Mastel chairman Sukarno Abdulrachman said the buying power of cellular phone users had recovered much faster than that of fixed-line users.

"The recovery is clearly seen in the recent steady growth in the sales of mobile phones and prepaid cards," he said.

According to Telkom data, the number of active cellular phone subscribers jumped by 138.8 percent to 1.82 million in the first nine months of 1999 from 762,602 in the corresponding period the previous year. (cst)