Govt raises local-call charges

Govt raises local-call charges

JAKARTA (JP): The cost of local telephone calls will rise 4.54
percent tomorrow but it will be cheaper to phone long distance or
209 other countries.

Secretary-General of the Ministry of Tourism, Post and
Telecommunications Jonathan L. Parapak told a press conference
yesterday that the state-owned telecommunications provider PT
Telkom would raise local phone charges from Rp 110 (US$0.04) to
Rp 115 a pulse (every 1.5, two or three minutes, depending on
distances and time periods).

"However, long-distance call charges will be reduced by 1.82
percent from Rp 110 to Rp 108 a pulse, and international-call
rates to 209 nations will also be reduced," Parapak said.

But charges on international calls to 22 other countries would
rise because of the rupiah's depreciation against the U.S.
dollar, he said.

Long-distance calls cost between Rp 110 and Rp 2,062.5 a
minute depending on zone divisions and time periods.

Parapak said that air-time charges for cellular
telecommunications services would also be reduced by 1.82
percent, from Rp 275 to Rp 270 a minute.

Telephone installation fees, he said, would be reduced by
between 5 percent and 28.13 percent.

Installation fees for business subscribers, which now range
from Rp 200,000 to Rp 900,000 depending on the location, will be
cut by a range of 5 percent to 11.2 percent.

Installation fees for households, which now vary from Rp
100,000 to Rp 700,000, will be cut by a range of 15 percent to
17.5 percent.

The installation fees for subscribers with social missions,
which now range from Rp 80,000 to Rp 560,000, will be cut by a
range of 25 percent to 28.13 percent.

Parapak recalled Telkom's statement in its prospectus for its
initial public offering in October last year which said that it
would review tariffs every year.

"There are two factors considered when setting the maximum
tariff adjustment (price cap) each year: The inflation rate minus
the X factor. The X factor is decided by the government.

"Because the inflation rate for 1996 was 8.64 percent (similar
to 1995's inflation) and the X factor is 6, the maximum
adjustment rate for telecommunications charges in 1997 is 2.64
percent," he said.

Only last month, the government pledged not to raise local,
long-distance or cellular call charges.

The Indonesian Consumers Foundation has strongly objected to
the 4.54 percent increase in local-call charges.

"I don't understand why this raise should be made. The
government raised charges at the expense of the general public
without any consultation with the House of Representatives," the
foundation's executive chairwoman, Tini Hadad, told The Jakarta
Post.

She said it was unclear why tariffs for local calls had
increased.

"This is also unexpected. The government or Telkom should have
given a transition period for the introduction of higher
tariffs," she said.

She said that, since Telkom had gained handsome profits with
the existing local-call tariffs, it should not have increased
them.

"I'm sure there are many families who pay Telkom more than Rp
500,000 in monthly telephone bills. Hence, even household
subscribers do not need any subsidies," Mrs. Hadad said.

She also criticized the lack of transparency with which the
tariffs were determined.

Telkom said the number of telephone lines in service increased
this year by 36.27 percent to 2.13 million lines in Greater
Jakarta and East Java. The number of installed telephone lines in
other areas increased 26.79 percent to 1.79 million.

Telkom said its number of subscribers increased 32.18 percent
to 3.79 million.

Minister of Tourism, Post and Telecommunications Joop Ave,
Telkom president Asman A. Nasution and Indosat president Tjahjono
Soerjodibroto said the adjustment of telephone tariffs would not
affect the financial soundness of Indosat and Telkom next year.

"It's negligible," Joop said. (icn)