House and government cannot connect on airtime rate
JAKARTA (JP): The government has turned down a recommendation from the House of Representatives to raise the airtime rate for cellular telephones by 15 percent.
Minister of Communications Giri Suseno said on Wednesday the 15 percent increase, as recommended by the House, was still too low.
"Remember, we decided earlier to increase the airtime by 46 percent," he said on the sidelines of a meeting with House Commission IV for communications.
The meeting was held to debate the new telecommunications bill, which will pave they way for the abolishment of exclusive rights held by PT Telkom Indonesia and PT Indosat.
The new bill will allow local and foreign companies to freely enter the telecommunications business without having to collaborate with Telkom or Indosat.
In January, the Ministry of Communications announced a decree to increase the airtime rate for mobile telephones by 46 percent to Rp 475 per minute, from Rp 325. The move was rejected by the House due to the economic crisis, forcing the government to delay the introduction of the decree.
The House Commission IV recently announced that it had asked the government to proceed with its delayed airtime raise decision, saying the ongoing recovery in the country's economic condition made the plan more acceptable.
The commission, however, agreed only to raise the airtime by 15 percent.
The airtime rate for cellular telephones is set by the government based on proposals from telephone operators, but the change is subject to House approval.
Unlike the airtime rate, operators are allowed to set their own pulse rate.
Director General of Post and Telecommunications Sasmito Dirdjo said the 46 percent increase in the cellular airtime was considered by the government the most appropriate sum to help cellular operators survive the crisis.
He said the government was likely to come up with another suggestion for the airtime increase rate that would better suit cellular operators' current requirements.
The Association of Cellular Telecommunication Indonesia (ATSI) said a significant raise in the airtime rate, the main income source of cellular operators, was necessary to offset the drop in cellular usage.
The monthly cellular revenue per user plunged from an average of Rp 250,000 in 1997 to Rp 190,000 in 1998. ATSI, which previously asked the government to raise the airtime rate by over 60 percent, said this year the rate had further dropped to Rp 160,000.
Head of the industry policy division of ATSI, Rudiantara, said the House's suggestion of a 15 percent increase was not sufficient to help the financially impaired local cellular industry.
"Compared to the international benchmark, which rates the average airtime at about 11 cents, or about Rp 700 per minute, a 15 percent increase is nothing," he told The Jakarta Post on Wednesday.
He said cellular operators expected the government to increase the airtime rate by 46 percent, if the latter could not afford to raise it by 60 percent.
There are currently seven cellular phone network providers in the country, serving three systems: the Advanced Mobile Phone System (AMPS), the Global System for Mobile Communications (GSM) and the Nordic Mobile Telephone (NMT) system. They serve over 1.3 million subscribers. (cst)