Drop tariffs on imports of GSM hardware: Joop

Drop tariffs on imports of GSM hardware: Joop

BANDUNG, West Java (JP): Minister of Tourism, Post and
Telecommunications Joop Ave confirmed yesterday that his office
has asked the Ministry of Finance to exempt duties on imports of
global system for mobile (GSM) telecommunications equipment.

"My job is to make telecommunications equipment available to
everybody at the lowest possible price. Indonesians are still
very poor, if we do not give an opportunity to make this
affordable, then I think it would be a deterrent," he said at a
three-day telecommunications conference opened here yesterday.

"For that reason, according to my convictions,
telecommunications is the most important infrastructure for
humanity. If we accept that, then the more telecommunications
facilities you have, the faster your country will have an
opportunity to get along," Joop added.

The request, he said, has not yet been approved.

An executive of PT Satelindo, a provider of GSM service, said
last week that there was a possibility that the import duty on
handsets would be lowered from the current level of 25 percent to
zero percent.

Such a regulation is considered necessary due to the
increasing mobility of handset-holders. It is also expected to
help lower handset prices, making them more affordable to the
majority of Indonesians.

Handsets are currently priced at around Rp 1.89 million
(US$845) each, down from around Rp 3.95 million last year, when
they were first introduced to the Indonesian market.

The executive calculated that importers have to pay an extra
47 percent for each handset to compensate for levies including
import duties.

Currently the GSM operators in Indonesia are Satelindo and PT
Telkomsel, while PT Telekomindo is expected to start operations
in the near future.

Telkomsel, jointly owned by state-owned PT Indosat and PT
Telkom, announced earlier this month that it intends to open up
to foreign ownership.

Telstra

The chief executive officer of Telstra of Australia, W. Frank
Blount, said yesterday that Telstra was interested in engaging in
Telkomsel's GSM business and had approached the company several
months ago. He refused to disclose developments of the talks so
far.

"We intend to carry out long-term partnerships with
Indonesian companies and will not limit activities to what we
have achieved so far," he said.

Telstra, together with Japan's NTT and its Indonesian company,
Telekomindo, earlier this year won the bid to provide 400,000
telephone lines in Central Java. The project -- conducted under a
revenue-sharing operational cooperation scheme with state-owned
Telkom -- is part of the government's plan to establish five
million telephone lines by the end of the Sixth Five-Year
Development Plan period in 1999. Two million lines will be
provided by the private sector and the remaining three million by
Telkom.

According to Telstra's general manager for Indonesia, Ross
Abbott, Telstra will invest more than US$120 million over the
next 15 years in the Central Java project which will involve a
total of $700 million.

Construction of the project will begin early next year.

Telstra's revenues last year reached A$13.3 billion and its
assets A$21.1 billion. (pwn)