Govt to raise cellphone rates by 50 percent

Govt to raise cellphone rates by 50 percent

JAKARTA (JP): The government will raise basic call rates of
mobile telecommunications by between 46 and 50 percent to be
effective on March 1, following a 24 percent hike in domestic,
fixed-line phone call rates, a senior official at the Ministry of
Communications has said.

The Director General of Post and Telecommunications, Sasmito
Dirdjo, said on Friday the tariff increase was crucial as relief
for the high operational costs burdening the country's seven
cellular operators.

"The exact rise is currently being studied by a team comprised
of government officials, House of Representatives legislators,
and ATSI (Indonesian Association of Cellular Telephone
Operators)," Sasmito said.

He said the new cellular service rate would be based on the
exchange rate of Rp 8,000 to the U.S. dollar.

He did not say whether the increase would include both air
time rates and the monthly service charge.

A 50 percent rise would bring the current cellular air time
rate to Rp 487.5 (5 U.S. cents) per minute from Rp 325 per
minute. It would boost the current monthly service charge of Rp
65,000 to Rp 97,500.

The government in February raised cellular air time rates by
20 percent from Rp 270 per minute and the monthly service charge
by 12 percent from Rp 58,000.

A plunge in the rupiah's value last year led ATSI to propose a
70 to 80 percent tariff hike to the government and the House
members in October.

Both the House and the government, however, only gave approval
to a maximum 50 percent rise.

A director at cellular operator PT Excelcomindo, Rudiantara,
was quoted by Bisnis Indonesia daily as saying that the cellular
air time rate in Indonesia was about 11 U.S cents per minute at
the 1997 pre-crisis exchange rate of Rp 2,450 to the dollar.

At the exchange rate of Rp 8,000 to the greenback, the air
time rate had plunged to 4 U.S. cents per minute, he said.

The rupiah's value continued to sink last week to around Rp
8,750 against the U.S. dollar.

The government earlier announced the plan to raise domestic
fixed-line phone call rates by 24 percent effective in February.

On Friday, Sasmito also announced an up to 85 percent hike in
domestic and international postal rates starting February, to
adjust to soaring operational costs.

The tariff hike for the domestic postal service ranges from
18.5 percent to 67 percent, while that of international postal
service ranges from 8 to 85 percent, he said.

The rise would be applied in two different phases, the first
phase being on February 1 and the second on July 1, he said.

"The increase may seem high in percentage points, but the
public will in practice only have to pay an average of Rp 100 to
Rp 250 more than before," he said.

The cost of sending a postcard within the country, for
example, will rise to 250 from Rp 150. An international postcard
will cost Rp 550 after the rise from the current rate of Rp 300.

Sasmito said 95 percent of the cost of the international
postal service was paid in U.S. dollars.

At the same time, the cost of maintaining the domestic postal
service had risen by 100 percent in the past six years, almost
exceeding the existing postal tariffs, he said. (das)