Mon, 11 Jun 2001

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)