Thursday, January 20, 2011

Indonesia - Regulator is to investigate mobile roaming charges

[the jakarta globe] The Business Competition Supervisory Commission laid out its agenda for the year, with plans to prioritize probes of cellular roaming charges in the telecommunications sector and electricity rate hikes.

Nawir Messi, the newly elected chairman of the antimonopoly body, also known as the KPPU, on Thursday said there were indications that roaming charges, both national and international, were too expensive and overburdening consumers.

“The amount you pay compared to the amount of time you use the telephone while roaming may be too expensive. We’re still investigating the pricing method of the roaming tariff and benchmarking the tariff with other countries,” he said on Thursday.

He said there was no objective explanation on the roaming charge pricing.

In addition, the KPPU has received reports from the public that the charges were too expensive compared to other fees for other services such as SMS charges, which have decreased over the years.

International roaming charges vary from $1 per minute to $4 per minute depending on the call’s destination.

The tariff is also set in cooperation with the destination country’s mobile phone operators

The KPPU also said there were indications of unfairness in a government attempt to cap electricity price hikes at 18 percent.

“The policy created discrimination among industries. While some industries ‘enjoy’ the capping, others pay the tariff according to the amount of electricity that they use,” he said.

In July, the government implemented a regulation stating that no industry would experience an electricity rate hike greater than 18 percent.

The regulation came after state electricity utility Perusahaan Listrik Negara, backed by the government, decided to increase its electricity rates.

Several industries claimed the uncapped rate hike would raise their power bills by up to 80 percent. PLN removed the cap last year, saying it would violate business competition laws by creating unhealthy competition.

Nawir said the policy would be revised if it was proven to violate competition laws.

In addition, the KPPU plans to focus on monitoring the energy, food and public infrastructure sectors, as well as companies with high market share.

“These sectors are prone to practices of monopolies or cartels. We’re here to make sure that that doesn’t happen,” Nawir said, warning that economic challenges may tempt companies to engage in unhealthy practices.

“Rising oil prices, the food price crisis and a possibility of capital outflows may prompt the government to shift its economic policies. Any changes in the economic policy that could hurt business players may trigger them to cooperate instead of compete,” he said.

Roaming Fees, Rate Hikes Squarely in KPPU’s Sights

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