Telephone tariffs to rise by 21.67% in June

Telephone tariffs to rise by 21.67% in June

JAKARTA (JP): After being delayed for more than a year, the
government finally got approval from the House of Representatives
on Friday to raise telephone tariffs by 21.67 percent in June.

Minister of Communications Agum Gumelar said that the increase
would be part of the government's plan to raise telephone charges
by 45.49 percent over three years.

"We will need time to communicate the tariff hike to the
public first but, yes, it will probably be in June," Agum said
after a hearing with the House's Commission IV for infrastructure
and transportation.

At the hearing, Commission IV formally presented its letter of
approval to the minister, saying that the House understood the
urgent need to raise the tariffs.

The commission's vice chairman, Rosyid Hidayat, said that the
House recognized the need for the hike as a determining factor in
attracting investment in the telecommunication sector.

"(It is also needed) to meet the construction and maintenance
costs of telecommunications infrastructure," he said.

In addition to approving a fixed-line tariff rise, the House
also approved an increase to post-paid cellular phone charges.

Rosyid said the House approved an increase of the air time
tariff to Rp 375 a minute, up from the existing Rp 325 per
minute.

The tariff of the pre-paid cellular service is not regulated
by the government.

The Ministry of Commucations proposed in May last year a
gradual increase of fixed-line tariffs by up to 45.49 percent
over three years -- 21.67 percent in 2001, 15.60 percent in 2002
and 8.22 percent in 2003.

House members have since been evaluating the proposal, a
process which has involved considering the opinions of
telecommunication experts, scholars, telecommunication
organizations and the Indonesian Consumers Society (YLKI).

Director General of Post and Telecommunication Djamhari Sirat
said the tariff increase for local and long distance calls would
vary, but the average increase would be 21.67 percent.

"There will be a rebalancing. It doesn't mean that all calls
will be increased by 21.67 percent," he said.

The House also set down conditions to be fulfilled by the
government, including that the government should take concrete
steps toward a restructuring of the telecommunications industry.

They also stipulated a requirement for the immediate issuance
of various regulations, including a regulation relating to the
telecommunication tariff formula, Rosyid said.

The House also asserted the need for state-owned
telecommunication company PT Telkom to quickly finalize the
drawn-out disputes with its five joint operation scheme (KSO)
partners so that construction of telecommunication lines in their
operative regions could be resumed.

"Of course, we will have to study the House's conditions
carefully, and we will try to abide by them. We will do it as we
go along," Agum said.

He said the government promised to push for the improvement of
telecommunication services to the public as compensation for
higher tariffs.

Djamhari said that Telkom is currently developing a cheaper
alternative for long distance telecommunication such as with
voice over Internet protocol (VoIP).

Telkom is also working on a program to increase coverage in
rural areas, a component of which would see the opening of more
telecommunication kiosks in remote locations he said, adding that
the company is also offering up to 75 percent discounts at
certain times. (tnt)