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)