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)