Cellular phone price likely to decline

JAKARTA (JP): The price of cellular phones will likely continue to decline on the world market over the next few years due to mass production and new innovations, an executive said.

"In Germany in 1990, terminal prices reached 4,500 marks (US$3,000 at the current rate). At present, they have dropped to 1,000 marks for low specification terminals and 2,000 marks for high specification," the general manager for telecommunications of Siemens Telecommunications of Germany, Hartmut Wilhelm Luecke, said yesterday.

He said prices may decline by 1999 to less than 500 marks ($333) for terminals with low specifications and 1,000 marks for those with high specifications.

He said that the decrease in prices will also happen in Indonesia, even though there is no handset manufacturer in the country.

Siemens is the major supplier for the state-owned telecommunications operator PT Telkom and telecommunications equipment producer PT Inti.

Siemens, which produces cellular mobile phone handsets, is now the main supplier for PT Telkomsel, the operator of digital cellular telecommunications.

Handsets for mobile phones are still extremely expensive in Indonesia -- generally 144.74 percent higher than those in other countries -- due to several taxes and duties. But fiercer competition has caused the price to decline.

Handsets for the global system for mobile communications sell for between Rp 4.34 million and Rp 1.95 million, depending on their brand and type.

Telecommunications executives in Indonesia have urged the government several times to abolish taxes and duties on handsets.

They said that overseas handset manufacturers are reluctant to establish a join venture plant in Indonesia because the market is still considered too small.

The government expects to install 600,000 cellular mobile telephone lines in addition to some five million fixed telephone lines during the ongoing Sixth Five Year Development Plan. (icn)