Government of the Federated States of Micronesia

FSM Telecommunications slashes international phone rates

PALIKIR, Pohnpei (FSM Information Service): February 2000 - Living in the FSM will become a lot cheaper for telephone users beginning April 1.

FSM Telecommunications Corporation will slash to one dollar a minute all international calls made from 5 p.m. to 8 a.m. Monday through Friday and all international calls made all Saturday and all Sunday, said John D. Sohl FSM Telecom deputy general manager.

This is a cut from $2.50 a minute to $1.00.

"No, this is not an April Fools joke," smiled Sohl.

The deputy general manager said there are two reasons for the Corporation's cutting the rates. First is to show customer appreciation.

"Now that we have done well financially, we want to give some back to our consumers," said Sohl.

Another reason is to assist the Corporation with a tariff study being done on telephone use. They want to prove that lower rates will generate more telephone cans and this in turn will generate more revenue in the long run.

"If the volume of telephone traffic remains the same, Telecom will lose $350,000; however, if people begin making longer calls or call more often, then this loss will decrease, and we will rush back to the Board to make the rate slash permanent," said Sohl.

Sohl explained that they wanted to make the rate cut begin March 1, but they were restricted from doing so because Board policy dictates that public consultation had to be done first.

Sohl explained further that the reason Telecom must increase the number of telephone calls outside of the FSM is because of pressure being put on it by the United States Federal Communications Commission.

He explained that right now the volume of telephone minutes coming into the FSM from the United States is three to every one minute of telephone calls going to the United States. This unequal balance is resulting in a large amount of money being paid by American carriers.

Another area of telephone use is Telecom's Internet market, which is experiencing its biggest growth in revenue. These will not be affected by the cost cut, but it does give some indication of the solidity of the Corporation.

In 1998 Telecom made $386,712 in Internet revenue, but last year this increased to $746,998, said Sohl.

When asked how much more this market will grow, Sohl simply pointed at his telephone and said, "The telephone will soon be history. Soon everyone will be using the computer or computer like instrument for everything.

For further information on this release, please contact:

FSM Office of the President
Public Information: Press, Radio, Video
P.O Box 34
Palikir Station, Pohnpei, FM 96941
Tel.: (691) 320-2548/2092
Fax.: (691) 320-4356