Dealers raise cellular phone connection fees

Dealers raise cellular phone connection fees

JAKARTA (JP): Operators of Global System for Mobile
Communications (GSM) telecommunications view the illegal increase
in fees for cellular telephone connection as a compliment for
telecoms services in the country.

"We see it as a compliment that our service is sold at a
premium," Satelindo's general manager for marketing, Raymond C.
Chatab, said.

Satelindo is one of the two current operating GSM providers in
Indonesia. Satelindo controls the digital mobile cellular
telephone market in Jakarta, while PT Telkomsel, the second GSM
carrier, is still new to the city.

Under government regulations, the installation of a GSM
telephone costs Rp 390,400 (US$167) which includes a subscriber
identity module (SIM) card of Rp 300,000, the first monthly
subscriber charge of Rp 50,000 with value added tax of Rp 5,000,
a frequency administration charge of Rp 25,000, a monthly
frequency utilization charge of Rp 8,400 and stamp duty of Rp
2,000.

However, many GSM dealers in Jakarta and other big cities
charge between Rp 500,000 and Rp 550,000 for new GSM
installation.

A GSM dealer at the newly-opened Mal Mangga Dua in Central
Jakarta, for example, charges Rp 550,000.

"If you want to buy a handset worth Rp 1.6 million, just pay
Rp 2.4 million and you will get the handset and two SIM cards
from Satelindo," the dealer said. "Or pay Rp 2.1 million and you
get the hand set and one SIM card and line connection will be
made in one day."

Satelindo has launched a promotion program allowing customers
to have two SIM cards while purchasing just one handset. Many
dealers take advantages from the promotion as most buyers don't
want two SIM cards. The promotion expires by the end of this
month.

The dealer said that he also sells Telkomsel's SIM card at Rp
550,000, which will be connected within three days.

The dealer admitted that the official price of the new
installation of a GSM telephone is just Rp 390,400. "But this is
business, we are looking for higher profits."

Satelindo's president, Iwa Sewaka, told The Jakarta Post over
the weekended that he would study the pricing issue.

"We will review partnership with dealers which set illegal
prices," he said.

Early this year, Satelindo followed Telkomsel's lead in
adopting an open market system which allows subscribers to buy
and use any handset sold by agents or other distributors, not
just the brands specifically recommended by the GSM operators.
Previously, SIM cards issued by Satelindo would not work in
"unlisted" handsets. (icn)