Govt to raise telecom tariffs by 15% in March

Govt to raise telecom tariffs by 15% in March

Dow Jones, Jakarta

The government plans to raise telecom tariffs by an average 15
percent in March after a two-month delay due to nationwide
protests against price hikes this month, a government official
said Tuesday.

Indonesia's had planned to raise the tariff in January to help
boost profits at state-owned PT Telekomunikasi Indonesia (TLK),
or Telkom, and make the company a more attractive target for a
foreign investor.

"We are still planning to raise tariffs because if we don't
Telkom won't be competitive," Djamhari Sirat, a senior official
at the transport ministry, told reporters.

President Megawati Soekarnoputri's government is likely hoping
that a decision this month to reduce planned hikes to fuel and
electricity prices means the public will accept the higher phone
charges.

The government scaled back its price hike plans for fuel and
electricity after protests broke out across the country.
Protesters complained the government shouldn't raise prices at a
time unemployment is growing.

But Indonesia needs to reduce subsidies on utilities, thus
pushing up prices, to help reduce its budget deficit.

The country's creditors, including the World Bank, say the
subsidies are expensive and don't target the really poor.