Cellular phone industry suffers slump<\/p>\n
JAKARTA (JP): Sales of cellular phones are projected to slump
\n80 percent this year as consumers slash their spending to cope
\nwith rising inflation.<\/p>\n
The general manager of mobile phone company PT Ericsson
\nIndonesia, Franky Prionggo, said yesterday sales were likely to
\nfall to between 180,000 units and 200,000 units this year from
\nabout one million units last year.<\/p>\n
\"The currency upheaval has affected everyone, including mobile
\nphone suppliers. The market is likely to shrink 80 percent this
\nyear,\" Franky said in a cellular phone workshop yesterday.<\/p>\n
He also said 60 percent to 70 percent of mobile phone
\nsubscribers used their phones less due to rising usage rates.<\/p>\n
Some, he added, had even stopped using their phones
\naltogether.<\/p>\n
According to Franky, there are currently 1.2 million cellular
\nphone users in the country, up slightly from 1.1 million as of
\nDecember 1997.<\/p>\n
Sales have suffered, he said, mainly because of sharp price
\nincreases of mobile phone units at a time when people's
\npurchasing power was dwindling.<\/p>\n
Prices of cellular phones have more than doubled from their
\nprecrisis levels since the rupiah's sharp depreciation.<\/p>\n
Most cellular phones are imported.<\/p>\n
The rupiah has depreciated 75 percent against the U.S. dollar
\nsince July last year.<\/p>\n
\"Although we are still able to slow down the rate of the price
\nincrease, our sales are still decreasing. It's also because of
\nthe public's increasing consciousness over prices,\" he added.<\/p>\n
Franky declined to reveal Ericsson's sales figures, but said
\nthe company had been experiencing a significant drop this year.<\/p>\n
He predicted, however, that the mobile phone industry in
\nIndonesia would improve slightly next year, mainly because of
\nrapid growth in the use of prepaid subscriber identity module
\n(SIM) cards.<\/p>\n
\"The prepaid SIM card has become increasingly more popular
\nbecause it allows users to control their bills.\"<\/p>\n
Ericsson, which controls about 40 percent of the country's
\ncellular phone market, plans to launch several innovative
\nproducts next year, including the SH-888 mobile phone which
\nutilizes GSM and digital cordless system (DCS-1800) technologies.<\/p>\n
\"Dual-band handsets are workable at different frequencies,
\nwhile dual-mode handsets support different telephone standards,\"
\nhe said.<\/p>\n
\"It's the trend. We have to follow the technology and people
\nwill be forced to use the dual-band or dual-mode handsets if they
\nwant to be more accessible within the cellular systems.\"<\/p>\n
Franky said Ericsson had conducted several marketing
\nstrategies to attract new buyers and take more control of the
\nslowing market.<\/p>\n
He said the company had introduced an \"X-Change\" program in
\nMay which allows customers to trade in their used Ericsson
\ncellular phones for newer models.<\/p>\n
The company also has a drawing for new buyers who could win
\nvarious tourist packages.<\/p>\n
There are seven cellular phone providers in the country,
\noperating three systems: the Advanced Mobile Phone System (AMPS),
\nthe Global System for Mobile communications (GSM) and the Nordic
\nMobile Telephone (NMT). (gis)<\/p>",
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