The latest price hike in Telekom Malaysia's fixed-line rental has raised eyebrows, as critics question if there is a valid reason for the move.

In a media statement today, DAP said the rise in phone rental effective from Saturday is unjustified considering that Telekom had o­nly last year increased the rental rate from RM20 to RM22.

"The previous increase of phone rental by RM2 had brought in Telekom an extra RM84 million. We can thus assume that the increase of a further RM3 will net the company another RM126 million. Is there any justification for such a drastic increase considering that Telekom had last year posted a group after-tax profit of RM1.09 billion?" asked national publicity bureau assistant secretary John Chung.

Social responsibility

The price hike in fixed-line rental rates to RM25 came just a year after the last year's increase o­n March 1 when the rates were raised from RM20 to RM22.

According to Energy, Communications and Multimedia Minister Leo Moggie, the price hike is part of a decision from last year to introduce the rent increase in stages. However, the minister said that the decision would not affect rural subscribers who were connected with telephone exchanges with a capacity of less than 1,000 users.

Chung also criticised the comment by Telekom Malaysia chairperson Radzi Mansur as reported in yesterday's newspapers that customers who do not want to pay the rent hike should consider changing their telephones to those which accept pre-paid cards.

"The advice by Radzi...clearly offers scant consolation to customers. Why should telephone users be made to suffer the hassle of changing their telephone sets as a result ot Telekom's unreasonable and unjustified increase in phone rental?" he said.

The DAP leader added that Telekom, as a public utility provider, should not forget that it has a social responsibility to ensure that the public is able to enjoy telephone services at a reasonable rate.

"Profit must not be its overriding concern. As it is now, Telekom is already reaping huge profits from its monopoly in the telecommunications sector. If Telekom Malaysia truly has the interests of its users at heart, then it should not have increased the rental. Such hikes o­nly enforces the public's perception that profit comes first for (the company)," said Chung.

'Set up tribunal'

In a separate statement, Penang-based social reform movement Aliran expressed its dissatisfaction with the price hike in stronger terms, likening the move to o­ne of greed by the utility company.

"The increase is grossly unfair, coming as it does a year after an earlier increase in rental last year...This raises a legitimate question: Should there be a limit to greed?" questioned Aliran president P Ramakrishnan.

Ramakrishnan expressed concern that Telekom had not provided an explanation as to why the price hike was necessary after the company posted a group profit last year.

"Telekom is not even bothered to explain why this additional capital is required. What is the justification for seeking this additional profit, if it is not caprice? They don't seem to be accountable to anyone. It appears that it is simply left to their whims and fancies," he said.

In addition, Ramakrishnan said such tariff increases by public utility companies should be deliberated upon by a suitable tribunal.

"Those seeking to increase tariffs should justify the proposed increase in an open hearing. This tribunal should have representatives from consumer groups, trade unions, other non-government organisations and political parties.

"By contrast, close-door decisions by ministry officials lack public accountability and are therefore totally unacceptable in a democratic society," he stressed.

Failed venture

According to statistics reported in newspapers, Telekom Malaysia posted the RM1.08 billion after-tax profit o­n a revenue of RM9.8 billion for the financial year ending Dec 31, 2002. In 2001, Telekom reportedly made RM1.85 billion in after-tax profits o­n a revenue of RM9.67 billion.

However, the company was also mired in a dispute with the Ghanian government over its investment into Ghana Telekom (Ghanatel).

According to a BBC report in January, Telekom is faced with losses of US$100 million after a currency devaluation of the Ghanian cedi eroded the company's returns after making large-scale investments upgrading Ghana's crumbling telecommunications network.

Telekom also found its presence resented by a new Ghanian government which disagreed with the Malaysian company holding management control despite owning o­nly 30 percent of Ghanatel's shares.