Govt to raise telephone rates by 6.47 percent

JAKARTA (JP): The government will raise telephone charge rates by a maximum of 6.47 percent for next year, a senior official said yesterday.

Secretary-General of the Ministry of Tourism, Post and Telecommunications Jonathan L. Parapak said that there also would be some reduced telephone call rates.

He said the government would announce the overall increase by the end of this year after completing the calculation on the so- called "X factors".

"We will announce the X factors by the end of this month. These factors will decide the annual price cap for rate adjustments," he said.

The price cap is based on the calculation of the inflation rate minus the X factors.

The X factors are always decided by the government.

Parapak said the government was still studying the impacts of the current currency crisis in order to calculate the X factors.

"The X factors, and also the price cap, are a reflection of the influence of economic growth to the performance of the telecommunication industry."

Parapak said that the price cap for 1998 would be less or as high as last year's inflation rate of 6.47 percent.

He reiterated that there would be raised and reduced telephone tariffs for 1998.

"This is not special. We have done this since the initial public offering of state-owned PT Telkom in 1995," he said.

Telecommunications operators have urged the government to increase call charges, particularly after currency upheavals hit Indonesia early July.

The currency crisis, which has eroded the value of the rupiah by some 35 percent, has adversely affected some telephone operators, especially those with revenues in rupiah but most expenses in dollars.

Owing to the crisis, the government has even delayed the appointment of new cellular providers to operate the Digital Cordless System and the Personal Handy-phone Service regionally in Sumatra, West Java, Central Java, East Java, Kalimantan and eastern areas.

The government originally planned to award the new cellular license holders last month.

"There have been many projects postponed, so it's much better if we delay the announcement," Parapak said.

He refused to disclose the new schedule for the announcement of the 11 new cellular operators.

He said that the government, in the meantime, would not cut targets of telecommunications development set for the ongoing Sixth Five-Year Development Plan (Repelita VI) period to end in March 1999.

The government just announced last December a new installation target of eight million telephone lines for the Repelita VI, including 6.7 million fixed-telephone lines and a network of 1.3 million mobile telephones.

The previous target was just five million lines. (icn)