Govt to increase phone charges by 15 percent

The Jakarta Post, Jakarta

The government yesterday announced plans to raise telephone charges by 15 percent from this February, ending months of speculation over the increase.

Transportation and communications minister Agum Gumelar confirmed the price hike, which comes amid protests over higher fuel and electricity costs.

State-owned electricity company PLN raised power prices by 6 percent for the first quarter of this year, while the government announced an average 22 percent increase in fuel prices last Wednesday.

Agum acknowledged that the triple increase in the cost of phones, fuel and power was unpopular, but said the move was essential to encourage foreign investors to expand the telephone network.

State-owned telecommunications company PT Telkom installed just 150,000 new telephone lines in 2001, well short of the government's target of two to three million lines by 2004.

The House of Representatives (DPR) approved the proposal to raise phone charges in November of last year, but the process has been marred by controversy.

The government initially planned a hike of 21.67 percent, then gradual increases up to 45.49 percent over three years. However, the plan met strong opposition from the House of Representatives, non-governmental organizations and the public.

Following the House's recommendation of a reduced hike of 15 percent, PT Telkom said last week it was ready to implement the hike, pending the signing of a ministerial decree.

Telkom vice president for rates and interconnection Mundarwiyarso said the cost of local calls would increase by an average of 16.77 percent, while domestic long distance call rates would rise by about 13.3 percent.