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The government will not raise telephone rates next year
unless the country's economy shows a marked improvement, Minister of
Communications Agum Gumelar said on Monday.
Agum said raising phone rates before telephone users had fully regained
their purchasing power would only elicit sharp criticism from the public
"So there will not be a rate hike in telephone services next year," he
told the House of Representatives Commission IV for telecommunications,
transportation and infrastructure.
According to data from state-owned telecommunications company PT
Telkom, 185,014 customers -- comprising 135,083 residential
subscribers, 49,272 business subscribers and 659 social subscribers --
canceled their service in the first nine months of the year due to the
economic crisis.
This figure is an improvement over the 201,201 cancellations in the
same period last year.
The data further stated that Telkom and its joint operation agreement
(KSO) contractors had a total of 5.69 million subscribers in the third
quarter of the year, a 9.11 percent increase over the 5.22 million
subscribers in the same period last year.
The country's telephone rates -- including local and domestic
long-distance charges, installation charges for fixed-line telephones,
monthly subscription charges and peak and off-peak hours charges -- are
adjusted every year by the government based on the Price Cap Tariff
Decree issued inOctober 1995.
According to the decree, the government decides whether to raise
telephone rates and the amount of the rate increase based on
recommendations from telecommunications operators, including Telkom and
cellular phone operators.
For cellular phone services, the government only determines rates for
regular services, while cellular phone operators have the right to set
rates for prepaid services.
Director General of Post and Telecommunications Sasmito Dirdjo also
said the government would not modify the existing arrangement for peak
and off-peak hours, as recently suggested by Telkom.
"There is no change either in the amount or structure of the rate
system for telephone services planned for next year. It may be changed
only if economic conditions allow," he said.
Telkom recently proposed a change in the peak and off-peak hours
arrangement for fixed-line telephones to avoid call congestion during
peak hours.
Under the proposal, telephone users would be required to pay a
surcharge of Rp 25 between 8 a.m. and 8 p.m.
The government, however, elected to maintain the existing 25 percent
surcharge from 8 a.m. to 6 p.m.
Separately, the Indonesian Telecommunications Society (Mastel)
suggested on Monday the government raise air-time charges for cellular
phone usage.
Mastel chairman Sukarno Abdulrachman said the buying power of cellular
phone users had recovered much faster than that of fixed-line users.
"The recovery is clearly seen in the recent steady growth in the sales
ofmobile phones and prepaid cards," he said.
According to Telkom data, the number of active cellular phone
subscribersjumped by 138.8 percent to 1.82 million in the first nine
months of 1999 from 762,602 in the corresponding period the previous
year.
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