Ericsson to cut its cellular phone prices

JAKARTA (JP): PT Ericsson Indonesia, the local subsidiary of a Swedish telecommunications firm, is to cut the price of its cellular telephones in response to the stronger rupiah, an executive of the company said here on Tuesday.

Ericsson Indonesia president Mats Olsson said the adjustment was needed because the price of cellular telephones, like other imported goods, follows the rupiah-U.S. dollar exchange rate.

However, he was reluctant to disclose how much his company plans to cut the price of its mobile phones, which currently retail for between Rp 1.6 million and Rp 4.4 million in Indonesia.

The rupiah, which plunged to a low of Rp 17,000 against the U.S. dollar in January, has stabilized at between Rp 7,500 and Rp 8,000 since early October, still well below the pre-crisis level of around Rp 2,500 in July, last year.

The collapse in the value of the rupiah resulted in a sharp price increase in all imported products, including mobile phones.

Olsson said he hoped the rupiah would strengthen further to enable his company to sell cellular telephones at even lower prices.

He said lower prices would help Ericsson to boost sales in Indonesia, one of the company's main markets in the Asian region, adding that facilities such as new service centers would be also be developed as part of a drive to further increase the companies share of the market.

Speaking to reporters following the opening of a service center in the ITC Shopping Center, Central Jakarta, Olsson said the Indonesian cellular market was tight this year as a result of the economic crisis.

But he said that sales would pick up again next year in line with a recovery in the economy.

He estimated that sales would increase by 50 percent next year from about 100,000 units this year.

Olsson said that Ericsson currently has 10 service centers in Indonesia and plans to increase the number to 40 in the future. (29)