Govt urged to lift duties on telecoms equipment
Govt urged to lift duties on telecoms equipment
JAKARTA (JP): Telecommunications executives have urged the government to eliminate import duties on the terminals of radio paging, satellite-based and radio trunking telecoms services to increase the use of such equipment.
"The government last year abolished the 25-percent import duty on all cellular telephone handsets, but radio paging terminals remain subject to import duty," Hendarso Hadiparmono, an executive of PT Indolink First Pacific, a nation-wide radio paging provider, told The Jakarta Post.
The government collects 25 percent import duty and 10 percent value added tax on communications devices.
A decree of the Minister of Finance dated Oct. 10, 1995 scrapped import duty on mobile cellular telephones in a bid to expand the domestic cellular telephone market to one million lines by the end of this decade.
In contrast to the tariffs of cellular telephone calls which are still very high, the prices of cellular telephones themselves have declined to a range of around Rp 1.2 million (US$512) to Rp 4 million ($1,723) from as high as Rp 7 million.
Hendarso said that due to the duties, the growth of radio paging subscribers would likely remain slow.
"In order to get more customers, many radio paging operators currently provide subsidies of 25 to 35 percent of the pager prices to customers," he said.
Radio paging operators in Indonesia generally purchase pagers from suppliers at about Rp 250,000 ($106.65) to Rp 425,000 ($181.31)
According to Hendarso, abolishment of the import duty will contribute greatly to expanding the number of the number radio paging subscribers.
The government last year revised its target of radio paging subscribers from one million to three million within the ongoing Sixth Five-Year Development Plan (Repelita VI) period which will end in March 1998. There are now some 500,000 pager subscribers in the country. The number is expected to double this year.
Meanwhile, an executive of PT Indosat, the state-owned international telecommunications, Ilham L. Poetranto, told the Post that the government should also eliminate the import duty on terminals using for satellite-based telecommunications system.
Indosat's is the accounting authority of the International Maritime Satellite (Inmarsat) services in Indonesia. The company serves Inmarsat B and Inmarsat M systems which are useful for telecommunications on oil exploration projects, shipping firms and other businesses or activities in remote places without any telecoms infrastructures.
"Many people in the country's remote areas stopped using the service after realizing that the price of the Inmarsat terminal is very high," Ilham said.
There is a limited selection of Inmarsat services sold in Indonesia -- Nera from Norway, which is sold at between Rp 35 million to Rp 130 million, Thrane & Thrane from Britain, which is sold at less than Rp 100 million and the Japanese JRC.
Cheaper prices, as a result of import duty elimination, will encourage people to buy the terminal Inmarsat, Ilham said.
There are currently about 170 parties subscribing to Inmarsat services through Indosat, most of them shipping firms.
Meanwhile, a director of PT Mobilkom Telekomindo, a private radio trunking operator, Jessi Manurung, also voiced a similar suggestion, saying that elimination of import duty on radio trunking terminals would also boost the number of subscribers.
He said that the current price of terminals for radio trunking systems is between Rp 2.5 million and Rp 3.5 million.
"Prices will probably drop to a range of Rp 1.5 million to Rp 2.5 million this year, but a further lowering of prices would bring even more users," he said.
The three telecoms executives said that last year they separately submitted proposals to the government for the abolishment of import duty and other charges on telecommunications equipment. (icn)