Govt to increase phone charges by 15 percent

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.