Telkom ready to cut its telephone tariffs by 20 percent

Jakarta (ANTARA News) - State telecommunication operator PT Telekomunikasi Indonesia Tbk (Telkom) will cut the retail tariff of all of its services by an average of 20 percent when the government-sanctioned reduced cost-based interconnection tariff takes effect on April 1, 2008 , a spokesman said.

"Our telephone tariff will be reduced by an average of 20 percent. It will apply to all our services, including cellular phone (Telkomsel) and fixed wires (Flexi)," Telkom`s Enterprises and Wholesale Services Director Arief Yahya told ANTARA on Friday.

The government on February 4 announced a new cost-based interconnection tariff which implied a reduction of 20-40 percent in cellular phone tariffs and a cut of 5-20 percent in fixed-wire tariffs.

The interconnection tariff`s reduction by 20-40 percent was one of the components in deciding the collection tariff for telecommunication services.

Interconnection is the connection among telecommunication operators or termination from different operators.

Yahya added basically tariffs would drop naturally after the government had imposed the new interconnection tariff.

"Besides due to the support of the regulation, the tariff reduction will also be influenced by competition among operators and subscribers` demand and thus operators should be competitive," he said.

He added Telkom had handed the Interconnection Offer List (DPI) that would serve as reference among operators in deciding their interconnection tariff.

"We handed the DPI to the regulators on February 27 which will be used by the government as the basis to decide the ceiling tariff and lower ceiling for all kinds of communication services," he said.

President director of state-owned cellular phone operator PT Telkomsel, Kiskenda Suriahardja, said the DPI would be part of the company`s formal offering and should be known by the government to make it transparent.

He, however claimed that the tariff reduction had been implemented,reflected by features provided by the cellular operators.

President of a private cellular phone operator, PT Excelcomindo Pratama (XL) Hasnul Suhaimi said the company has reduced its service tariff since 2004.