International call rates to rise due to rupiah's fall

JAKARTA (JP): International telephone calls will soon be 25 percent more expensive when the government adjusts the rates to a new lower rupiah exchange rate against the dollar.

Minister of Tourism, Post and Telecommunications Joop Ave told a hearing with the House of Representatives Commission IV for public works yesterday the increase was necessary to keep PT Indosat healthy.

He did not rule out further increases in the future.

Indosat, the state company which manages international telephone communications, is a publicly listed company.

Joop said the company has suffered severe financial losses because of the rupiah's plunge in the last seven months.

"We've studied everything carefully. The adjustment will be made in phases. Initially, we will increase it by 25 percent, assuming that the rupiah stabilizes at Rp 5,000 to the dollar.

"If the rupiah falls below that, we will have to make new adjustments," he said.

The rupiah has depreciated by more than 75 percent since July, from Rp 2,400 to the dollar to about Rp 10,000 this week.

Joop did not indicate when the increase would take effect but said the ministry was currently discussing the issue with various parties, including the Indonesian Consumers Foundation.

He said the rupiah's fall has forced Indosat's international communications costs to rise because its providers, such as America's AT&T and Japan's NTT, charged in dollars while Indosat's revenues were in rupiah.

As a publicly listed firm, Indosat's huge losses could damage its entire shares in the stock exchange, he said.

The government has already raised the rate of local calls 8.7 percent to Rp 125 per pulse, and cut intercity calls 10.2 percent to Rp 97 per pulse since Jan. 1.

State-owned PT Telkom manages local telephone communications.

Joop said telephone rates in Indonesia were still among the lowest in the world. "Adjusting the rates for various telecommunications services is necessary and can no longer be delayed," he said.

He also announced that the maximum fee for installing cellular phones would be reduced from Rp 300,000 to Rp 200,000, while minimum air-time charges for cellular phones would be raised 20 percent to Rp 325 per minute.

The government sets the minimum air-time charges and maximum installation fees for cellular phone services, for which state companies compete with private operators. (gis)