International phone rates raised by 25%, ministry says

JAKARTA (JP): The Ministry of Tourism, Post and Telecommunications announced yesterday a 25 percent increase in international telephone call rates due to the depreciation of the rupiah against the U.S. dollar.

The ministry said the new call rates will be effective from March 15. The increase includes standard international telephone tariffs to 204 countries and international telex tariffs to 206 countries.

The new rates will apply to both the publicly listed PT Indosat and PT Satelindo companies, which manage international telecommunications services.

The ministry said the increase was necessary because the sharp drop in the rupiah's value has reduced Indosat and Satelindo revenues by 76 percent. The rupiah has depreciated by about 75 percent against the greenback since the monetary crisis first hit the country last July.

The rupiah's tumble has inflated the two companies' international communication costs because their providers, such as the United States' AT&T and Japan's NTT, charge in dollars while Indosat and Satelindo revenues are in rupiah.

Outgoing Minister of Tourism, Post and Telecommunications Joop Ave said earlier that 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.

The ministry also announced a plan to increase local phone rates starting April 1.

Local phone rates for households subscribers will be increased by around 10 percent and a maximum 15 percent for business subscribers. There will be no increase in tariffs for subscribers with special missions.

The ministry said the increase was essential to keep the publicly listed PT Telkom healthy because a loss suffered by the company could damage the condition of all other companies listed on the Jakarta Stock Exchange.

Telkom, which controls domestic telephone services, is listed on the London, New York, Jakarta and Surabaya stock exchanges.

The ministry said Telkom's prospectus for its initial public offering in October 1995 had stated its tariffs were subject to annual adjustment by the government. The adjustment depends on inflation and efficiency factors.

On Jan. 1, the government raised the rate of local telephone calls by 8.7 percent to Rp 125 per pulse (every 1.5, two or three minutes, depending on the distance and time period) and cut intercity calls by 10.2 percent to Rp 97 per pulse. (gis)