Indosat hikes international call rates up to 50 percent

JAKARTA (JP): Publicly listed international telecommunications provider PT Indosat announced on Wednesday that it would raise international telephone rates between 4 percent and 50 percent effective on Nov. 25.

The government approved the increase on Nov. 12 due to the rupiah's sharp depreciation against the U.S dollar, the company said in a statement.

"The communications ministry explained that the basic reason for the rate adjustments was to improve the (condition of the) country's international telecommunications industry which has been negatively influenced due to the high depreciation of the rupiah," the statement said.

Indosat said the new rates represented an increase ranging from 4 percent to 34 percent to 55 countries and an increase of about 50 percent to 29 countries.

There is no increase in rates for the 152 other countries served by Indosat.

Telex service rates will be raised by 25 percent for all countries, Indosat said.

The government raised international call tariffs by 25 percent in March to offset the rupiah's depreciation.

Without any publicity, the government has approved the increase in international call rates on Nov. 12, saying it was needed to avoid massive outflow of foreign exchange to overseas providers.

The Indonesian currency has lost from 60 percent to 70 percent of its value against the American greenback since early July last year. It is currently trading at Rp 7,500 to the dollar, compared to its precrisis level of Rp 2,450.

Analysts argued that a rate increase was necessary for Indosat to maintain its strong operating results and warned that as a publicly listed company its losses could adversely affect the stock exchange.

Indosat earlier said that the rupiah's sharp fall has caused its international communication costs to soar because its overseas providers, such as America AT&T and Japan NTT, charged it in dollars while its revenues are in rupiah.

Indosat's net profit for the first nine months period of this year surged by 89 percent to Rp 847.7 billion, compared to Rp 447.6 billion in the corresponding period last year.

The company is listed on the Jakarta and New York stock exchanges. (gis)