Government wins House's approval to raise telephone charges

Government wins House's approval to raise telephone charges

JAKARTA (JP): The House of Representatives has given the go
ahead to the government to raise telephone charges by about 45
percent over three years to help fixed-line operators cope with
their rising operating costs.

The approval was given during a meeting on Wednesday evening
between the House's special telecommunications team and the
House's Commission IV for infrastructure and transportation.

The chairman of Commission IV Sadjarwo Sukardiman said that
the government could go ahead with its plan to raise telephone
charges.

"We understand why telephone charges need to be increased," he
told The Jakarta Post on Thursday. He added that an official
letter informing the Ministry of Transportation and
Telecommunications about the approval would soon be on the way.

An increase in telephone charges was needed to help revive the
ailing telecommunications industry, Sadjarwo said, explaining
that the current investment return rate (IRR) was less than 10
percent, much lower than a bank's time deposit interest rate of
15 percent.

"This way investors would rather not put their money in
telecommunications," he added.

Sadjarwo said that about 97 percent of the country's
population were not connected to a telephone line, and he hoped
the hike would invigorate the investment climate so that more
telephone lines could be built and more people connected to the
system.

The Ministry of Transportation and Telecommunications proposed
in May last year a gradual increase in fixed-line telephone
charges of up to 45.49 percent over three years.

Sasmito Dirdjo, then the Director General of Posts and
Telecommunications, proposed that the charges be increased by
21.67 percent in 2001, 15.60 percent in 2002, and by another 8.22
percent in 2003.

He said earlier that the government was only awaiting the
approval of the House before implementing the new charges.

However, the vice chairman of Commission IV, Rosyid Hidayat,
said in a statement that the House had not explicitly approved
the hike.

He said that telephone charges were an integral part of the
restructuring of the national telecommunications sector, and that
there were many things to be considered before the hike could be
implemented.

The House had recommended that the government make public its
plans for the installation of new telephone lines and the
provision of alternative telephone services such as voice over
Internet protocol (VoIP) that are cheaper than conventional phone
services

The House had also proposed that the government set
differential charges for disadvantaged economic groups, Rosyid
said.

Sadjarwo stressed that the government must restructure the
telecommunications sector's regulatory environment and prepare
the instruments which would serve as guidelines for
telecommunications services.

"I think the government has already prepared the regulations,
it just needs the Minister's signature to put them into effect,"
Sadjarwo added.

Besides a hike for fixed-line telephone charges, the House
also gave its approval for a hike in cellular phone charges of up
to 30 percent, he said, adding that the hike was completely up to
each operator's discretion but that it must not be higher than Rp
450 ($0.045) a minute. (tnt)