Govt allows cell phone operators to set their rates

Govt allows cell phone operators to set their rates

JAKARTA (JP): The government will allow local mobile phone
operators to set their own rates as part of its program to
gradually liberalize the country's telecommunications sector, a
senior telecom official said here on Saturday.

Sasmito Dirdjo, director general of post and
telecommunications at the Ministry of Communications, said,
however, the government would continue to set a ceiling for
mobile telephone rates in a bid to protect the public.

"The existing uniform call charge will be replaced with a
ceiling tariff," he told The Jakarta Post.

The government and mobile phone operators will soon meet to
discuss the details of the planned change in the policy of fixing
cellular phone rates, he said.

All of the country's seven mobile phone operators charge their
customers with the uniform call charge set by the government. The
current call charge is Rp 325 (about 4.5 US cents) per minute.

The government currently determines the call charge for the
country's regular mobile phone service based on proposals from
the mobile telephone operators. Changes in the rate, however, are
subject to approval by the House of Representatives.

The House signaled its compliance early last week to demands
by mobile phone operators for greater freedom in setting call
charges according to the terms of their services and market
conditions.

The operators said the self-adjustment tariff system would
positively impact customers, because it would push operators to
compete with each other in providing the best service at the most
reasonable price.

At present, mobile phone operators are free to set their own
prices only for particular prepaid services.

Sasmito said the government previously could not allow
operators to set their own rates because some of the mobile phone
operators were not ready to face open competition.

According to the Association of Indonesian Cellular
Telecommunications Operators (ATSI), the ideal call tariff for
Indonesia's mobile phone industry is around 11 US cents per
minute.

The country's seven mobile phone operators -- PT Satelindo, PT
Telkomsel and PT Excelcomindo, which use the Global System for
Mobile Communications; PT Telesera, PT Metrosel and PT
Komselindo, which operate the Advanced Mobile Phone System; and
PT Mobisel, which runs the Nordic Mobile Telephones System --
currently serve around 2.4 million subscribers.

ATSI projects the number of mobile phone subscribers will rise
to over three million by the end of this year, up from around
2.05 million registered at the end of 1999 and 1.1 million at the
end of 1998.

ATSI also predicts the price of mobile phone usage per
subscriber will climb to an average of Rp 400,000 per month this
year, up from an average of Rp 300,000 per month in 1999. (cst)