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)