Govt raises phone charges by 15 percent

Debbie A. Lubis, The Jakarta Post, Jakarta

Minister of Transportation and Communications Agum Gumelar announced on Tuesday that telephone charges would increase by an average of 15 percent starting Jan. 31.

He said that the hikes in phone charges were needed to attract new investment into the country's fixed-line telecommunications sector.

Speaking to reporters during a gathering, Agum said that the ministerial decree authorizing the increases would be signed later on Tuesday.

The phone charge increases are part of the government's three- year plan to crank up phone charges by 45.49 percent. The government initially proposed a 21.67 percent rate hike as part of the first phase, but this was rejected by the House of Representatives as the House claimed it would overly burden the public. In the end, the legislature only approved a 15 percent increase.

Agum admitted that the phone charge increase was not a popular policy given the fact that the government had earlier raised fuel prices and electricity rates.

But he said that the increase was essential to attract investors to finance the expansion of the local fixed-line telecommunications network.

He also said that although the state-owned telecommunications firm PT Telkom had made hefty profits from its monopoly over the country's fixed-line service, its cash flow was not sufficient to finance the targeted installation of at least two million telephone lines by 2004.

"Telkom's profit is only enough to install 150,000 lines," Agum said.

As of Sept. 30, 2001, Telkom had installed a total of 7.1 million telephone lines across the country, the equivalent of 3.24 telephone lines for every 100 people.

The government will revoke Telkom's monopoly over local telephone services in 2002, its domestic long-distance call services in 2003, and state-owned PT Indosat's exclusive rights over international direct-dial services in 2003.

Meanwhile Director General of Posts and Telecommunications Services Djamhari Sirat said that local calls would go up by 17 percent and long distance calls by 13 percent.