Telecom operators may raise tariffs due to currency woes

JAKARTA (JP): The ongoing currency turmoil may force telecommunications operators to increase tariffs, executives said here yesterday.

President of cellular operator PT Telkomsel, Koesmarihati Soegondo, said that she would accept any measures to increase cellular phone tariffs.

"The current Rp 270 per minute of air-time in Indonesia is the cheapest cellular rate in the world. The new rate will be discussed among the cellular operators to be proposed to the government," she said.

There are now seven cellular service providers operating three different systems in Indonesia.

The companies held a meeting Tuesday which also discussed new tariff arrangements.

State-owned domestic telecommunications provider PT Telkom earlier proposed a 2.64-percent rate increase.

But Telkom's president Asman A. Nasution denied this yesterday.

"What do you think is the best thing for a situation like now? It's the government's decision to adjust the tariffs," he said.

Sources at Telkom said yesterday that the company had met with the country's Association of Indonesian Electric Cables Producers to discuss how to overcome the rupiah upheaval which would increase prices and the rate of telephone investment per line.

Secretary-general of the Ministry of Tourism, Post and Telecommunications, Jonathan L. Parapak, has said that the government is committed to adjusting telecommunications tariffs annually.

"Just wait and see, there will be adjustments. But it's too early to talk about it now," he said over the weekend.

Nasution admitted Telkom would be very cautious with its budget in ongoing operations and future telecommunications developments.

The government has set a new target of telecommunications network development to have more telephones per capita.

Last year the government announced that it would install more telephone lines than originally planned for the ongoing Sixth Five-Year Development Plan period to end in March 1999.

Its previous target for new telephone lines has risen 60 percent from five million to eight million.

The new target is 6.7 million fixed-telephone lines and a network capacity for 1.3 million mobile telephones.

"We will use our own capital in the development program instead of using the remaining loans extended by overseas banks," Nasution said, adding that Telkom's long-term foreign debts had reached Rp 1.6 trillion.

A top executive of telecommunications company PT Telekomindo, Rudiantara, said that the utilization of foreign exchange in telecommunications business was still high because 80 percent of the industry's equipment was imported.

"Both cellular and fixed-line telephone companies have loans in foreign currencies, the difference is just in the interest rates," he said.

He said he believed that the companies would be able to manage all possible problems so as to avoid disadvantaging the public.

Five private firms which develop telecommunications networks in cooperation with Telkom, and a number of cellular operators have won loans of hundreds of millions of dollars to develop telecommunications infrastructure.

Currency turmoil may affect their ability to pay back the overseas loans.

There's no estimate of possible increases in per line costs for fixed line (between $800 and $1,000) and cellular (about $900 to $1,300) services.

Rudiantara said that the price of some cellular phones had gone up, and some brands had even disappeared from the market.

"This does not relate to cellular operators but to the handset sales agents or cellular providers' dealers," he said. (icn)