Telkom finally postpones plan to raise phone rates

Telkom finally postpones plan to raise phone rates

JAKARTA (JP): State-owned telecommunications company PT Telkom
has finally postponed the plan to raise telephone rates,
initially scheduled for Sunday, due to strong opposition from the
public.

Telkom's assistant vice president for corporate communications
A.M. Sampurna said here over the weekend that the new rates would
be implemented after the government had finished reviewing the
new rate structure.

"This doesn't mean that the hike is canceled. It is only
postponed until the review is finished," Sampurna was quoted as
saying by Antara.

The postponement came following calls from the House of
Representatives for a review of the rate structure which had been
found to be misleading.

Telecommunications experts had found that in some areas of
Jakarta the increase would reach as high as 167.86 percent, far
higher than the 21.67 percent average that had been approved by
the House.

Newly installed Minister of Communications Budhi Mulyawan
Suyitno had agreed on Thursday to the review.

Sampurna said that the postponement was in fact a blessing for
Telkom, as not all areas were ready to implement the hike on June
10.

Along with the plan to increase fixed-line telephone services,
the government also plans to hike air time rates by 15 percent to
Rp 375 a minute from the existing Rp 325 a minute on July 1.

Director General of Posts and Telecommunications Djamhari
Sirat however said that the decision was pending the approval of
the House.

Unlike the controversial planned rate hike for fixed-line
domestic telephone services, an increase in air time for cellular
services should not pose a problem because of the difference in
the target markets of the two services, he said.

Djamhari said the market segment of cellular telephone
services was aimed at the higher income groups, unlike fixed-line
telephone services.

Currently there are seven national cellular operators in
operation using the global system for mobile communications
(GSM), the advanced mobile phone system (AMPS), and the Nordic
mobile telephones (NMT) system.

Leading the cellular market in Indonesia are operators under
the GSM system -- PT Telkomsel, PT Satelindo, and PT Excelcomindo
Pratama -- which hold the majority of the more than 4 million
cellular users in the country.

The others are PT Telesera, PT Metrosel, and PT Komselindo
which operate under the AMPS; and PT Mobile Selular Indonesia
(Mobisel) which will soon switch to the call division multiple
access (CDMA) system from the existing NMT system.

The hike in the air time rate was not considered a threat to
the operators.

"People still need to communicate whether the rate is
increased or not, it's a basic need. For business people
especially, they can't stop business just because mobile
telephone calls are expensive," Excelcom's corporate
communications Sutji Lantyka told The Jakarta Post.

The government also determines the connection fee based on the
air time.

For connections to fixed-line telephones from mobile phones,
the charge is one times the air time rate, for connections
between mobiles the charge is twice the air time fee. Calls from
fixed-line telephones to mobile phones are charged at one times
the air time rate.

Besides air time, the customer has also to pay a call charge,
which is determined by the cellular operators.

With the new rate, the total costs for local calls using post-
paid services will cost about Rp 505 a minute, compared to
existing Rp 450. (tnt)