Lower tariffs needed for cellular telephone calls

Lower tariffs needed for cellular telephone calls

JAKARTA (JP): Indonesia needs to restructure the tariffs for cellular mobile telephone calls in order to boost the number of subscribers, a senior telecoms executive said yesterday.

"A new structure of call tariffs for mobile cellular phones is necessary to encourage more people to use mobile telephones, following the exemption of import duty on cellular handsets," a director of PT Telkomsel, Garuda Sugardo, told reporters after inspecting the company's business expansion preparations.

Last month the government lifted the 25-percent import duty on cellular telephone handsets, thereby making them more affordable. Their prices now range between Rp 1.5 million (US$655) and Rp 4 million ($1,750), about one-third lower than the prices of two years ago.

Garuda said that mobile cellular telecommunications operators in Indonesia compete only in the quality of services because call tariffs are set by the government.

"The government would do better to let operators formulate their own tariffs," he said.

He said cellular telephone calls are billed on the bases of air time and distance.

"In foreign countries, cellular telecommunications operators charge their subscribers for air time only," he said.

Study

Director General of Post and Telecommunications Djakaria Purawidjaja said recently that the government is still studying several tariff arrangements of various foreign operators.

Indonesia expects to increase the number of cellular telephone subscribers to one million by the end of this decade from about 200,000 at present.

Telkomsel, established in May this year, is one of the country's three operators of global system for mobile (GSM) telecommunications. The other operators are PT Satelindo and PT Excelcomindo.

Telkomsel, which is 51 percent owned by state-owned domestic telecommunications operators PT Telkom and 45 percent by state- owned international operator PT Indosat, currently operates in seven provinces: Riau, North Sumatra, West Sumatra, East Java, West Java, Bali and West Nusa Tenggara.

As of Nov. 4, the company had registered 15,172 subscribers.

Garuda said that next month the company will commence services to five more provinces: Central Java, Yogyakarta, South Sumatra, Lampung and Jakarta.

"We have invested Rp 251.65 billion for the expansion; for the establishment of 106,000 lines," he said, adding that Telkomsel will launch its Surabaya service tomorrow.

The company will install 10,000 lines in Surabaya and 50,000 lines in the first step in Jakarta, he said.(icn)