Telkom to cut long distance call rates by up to 46%

Novia D. Rulistia, The Jakarta Post, Jakarta | Tue, 04/08/2008 11:52 AM

 

Thanks in part to a government intervention, competition in the telecommunications industry has finally forced the biggest player in the industry, PT Telekomunikasi Indonesia (Telkom), to cut its long distance call rate by up to 46 percent, starting Tuesday.

 

Telkom's vice president for public and marketing communications, Eddy Kurnia, said the rate would be cut to increase landline use amid increased competition from mobile phone services.

 

Earlier this month, the connection charge between mobile phone operators was cut by between 20 percent and 41 percent in response to a regulation issued by the Directorate General for Post and Telecommunications earlier this year.

 

"The regulation naturally affected our calculations for long distance calls, hence the new rates need to be introduced," Eddy said.

 

The regulation was issued on the back of a report by the Business Competition Supervisory Commission in November, which said the industry was marred by unhealthy competition as demonstrated by the fact, among others, that consumers here are paying the highest charges in Asia even though there are no entry barriers to competition.

 

Eddy said the new rate would be applied to almost all long distance calls between landlines and between landlines and mobile telephones.

 

"The percentage for the new charges will vary, depending on the distance and time bands," he said.

 

According to Eddy, a call from a landline to a mobile phone between 7 a.m. and 8 a.m. across more than 500 kilometers, for example, will be charged at Rp 465 per 20 seconds, 46.2 percent lower than the previous rate of Rp 865 per 20 seconds.

 

Calls between landlines and mobile phones across 30 to 200 kilometers during the same period will now be charged at Rp 300 per 20 seconds, down from Rp 583.3 per 20 seconds.

 

He said there would be no changes for local call rates, which would remain at Rp 250 per two minutes, or for the subscription fee, which would remain at Rp 32,600 per month.

 

According to Eddy, the company now has 8.7 million subscribers for landlines and 6.5 million for mobile wireless connections (CDMA) under its Flexi brand.

 

In 2006, the company recorded a net profit of Rp 11.055 trillion, up 37.7 percent from Rp 7.99 trillion the previous year. The increase was mostly attributed to the significant increase in its wireless service, TelkomFlexi.