Telkom to raise phone rates by 15 percent

A'an Suryana, The Jakarta Post, Jakarta

State-owned telecommunications company PT Telkom Tbk will raise local and long distance call rates by an average of 15 percent in January next year, pending a decree from the Ministry of Communications.

The increase is part of the government's three year plan to crank up phone charges by 45.49 percent in a bid to boost investment in the country's fixed line telecommunications sector.

Telkom raised phone charges by an average of 15 percent in January of this year.

After next year's increase, Telkom plans to raise charges again in 2004 to bring the total phone charge increase to 45.49 percent.

"The biggest hike for next year will be applied to local call rates, as these are still subsidized by long distance calls," Telkom president director Kristiono told reporters here after attending a seminar titled "Developing a New Indonesian Interconnect Rule".

Kristiono refused to provide details on the new tariff scheme, saying a special company team was still working on it.

According to Kristiono, the rate increases would strengthen Telkom's financial abilities to expand its business and to attract foreign investment to the country's telecommunications sector.

With additional income from the tariff increase, the company hoped to be able to meet its target of installing 300,000 new telephone lines next year, another 1.2 million lines in 2004 and three million lines in 2006.

As of June 30 this year, Telkom had 7.5 million lines across the nation.

Telkom monopolized the country's local and long-distance phone business until August this year when the government officially allowed another telecoms firm, PT Indosat Tbk, to operate a long- distance call business. Indosat was earlier only allowed to operate international call services.

However, Indosat can only start the new service in November this year.