YLKI criticizes plan to hike telephone rates next year

YLKI criticizes plan to hike telephone rates next year

Adianto P. Simamora, The Jakarta Post, Jakarta

The high-profile Indonesian Consumers Foundation (YLKI)
opposed the government's plan to hike telephone rates next year,
saying there was no strong reason to do so.

Executive secretary of YLKI Husna Zahir said on Tuesday that
given the current economic hardship and the fact that the state-
owned telecommunications firm PT Telkom had already been making a
good profit, the raising of phone rates starting next year was
inappropriate.

"This is not the right time for the government to raise
telephone rates, particularly due to the current (weak) economic
situation," Husna told The Jakarta Post.

She called on both the government and the House to carefully
assess the public's purchasing ability before making any decision
to hike telephone rates.

House of Representatives Commission IV overseeing
infrastructure and transportation affairs approved on Monday the
government's proposal to hike telephone rates starting next year,
although the percentage of the hike has yet to be decided.

The government has proposed a 21.67 percent rate increase in
January next year as part of a 45.49 percent rate increase
planned over a three-year period.

Legislators have demanded that the rate increase be reduced to
a level affordable by the public.

Telkom and the government said that increased telephone rates
were crucial for expansion of the telephone network as well as to
attract new investors.

Telkom unveiled its plans to install 1.2 million telephone
lines by the end of 2004, including 257,990 lines this year.

It said that the company would only be able to install a
maximum of 129,000 telephones lines if there were no rates hike
next year.

Telkom recorded a 17 percent increase in net income, to Rp
2.54 trillion (US$242 million) in 2000, compared with 1999.

Husna urged the government not to burden telephone customers
in order to finance expansion in the domestic telecommunications
sector.

"Telkom must not burden them (customers), because it (the
expansion program) is Telkom's responsibility," she said.

Chairman of the Indonesian Internet Service Provider
Association (APJII) Heru Nugroho shared YLKI's views.

"I don't agree with the government's proposal because it will
only discourage people from using the Internet," he said.