Mobile cellular fever to continue for several years

By I. Christianto

JAKARTA (JP): The mobile cellular telecommunications fever currently hitting Indonesia will continue for the next few years, as all of the nine operators are expanding their networks throughout the country.

Few customers, however, realize that the tariffs for cellular telephones in Indonesia are among the most expensive in the world.

There are currently some 300,000 mobile cellular phone users out of the country's population of 200 million. More than three- fourths of the total are subscribers of the Global System for Mobile Communications (GSM) operated by two firms, PT Satelindo and PT Telkomsel. GSM, initially developed in Europe, is one of the world's most popular digital mobile cellular telecommunications systems.

In addition to the digital system, there are currently two analog modes operated in the country, including the Advanced Mobile Phone System (AMPS) and Nordic Mobile Telephones (NMT). The rapid development of digital cellular telecommunications, however, is expected to edge out the increasingly outdated analog system.

A boon to the GSM network is the accelerated development of telecommunications networks by the government. The target will include a ratio of 20 fixed telephone lines for every 100 people by the year 2020, while the rate of cellular telephones is expected to reach between 10 percent and 20 percent of the total phone lines in that year.

The current fixed telephone density per 100 people in Indonesia is less than two. Cellular telephone penetration, meanwhile, is currently just 0.15 percent.

As the market is still very young, analysts believe that Indonesia, with a steady growth of gross domestic product (more than 7 percent per year), is a big potential market for cellular telecommunications. Cordless phones also provide an advantage in a country which consists of so many islands, which make Indonesia the largest archipelagic state in the world.

In the meantime, despite the small penetration of cellular telephones, increasing numbers of people conversing through handsets in public areas are a common sight in the country's business cities such as Jakarta, Surabaya, Bandung, Medan and Batam.

People in major urban cities are now accustomed to seeing cellular phone users ignore their surroundings in theaters, cinemas, restaurants, hotel lobbies, meeting rooms, toilets and even offices by speaking loudly into their handsets.

Another factor which will make the cellular phones even more popular is the recent removal of the import duty on cellular handsets which makes cellular phone prices more reasonable. From a range of about Rp 500,000 (approximately US$212) to Rp 2.5 million ($1,064) -- or even much lower on the black market -- more people now can afford the tool of "prestige".

Many cellular users, however, have yet to learn the "rules" in operating their handsets.

A director of Telkomsel, Garuda Sugardo, said that the "rules" in cellular telephone operation are related to the bio-effect, safety/security effect and convenience effect.

In several nations, cellular telephones, traditionally prohibited on airplanes, have been banned in hospitals because experts believe they interfere with medical equipment.

Many countries ban cellular telephone operations from within two meters of medical equipment, in hospital wards and operating theaters and near X-ray, intensive care, accident and emergency and obstetric-newborn units.

But it is common to see people or even paramedics in Indonesia using cellular telephones in hospitals, arguing they need to be always accessible.

Telkomsel's manager, Doede Visser, said that hospitals could actually put no-handset operation signs in particular places where cellular phones may interfere with medical equipment.

"Just like special rooms provided for smokers in certain places, hospitals can also provide special rooms for cellular telephone operation," he said.

For safety, some other countries have banned the use of cellular telephones by drivers -- except ambulances, fire brigades and police vehicles -- considering the risks of accidents not only to the drivers, but also to passengers and pedestrians. Violators will face serious penalties for breaking the rule.

In Indonesia, people can use cellular phones even when they are driving on freeways, such as toll roads.

A handset held by a person frequently rang during the performances at the recent inauguration of the Dance Festivals at Graha Bhakti Budaya in Taman Ismail Marzuki. The user did not bother at all about the other spectators who grumbled.

Some cinemas in Jakarta now display a sign before running films. It is the no-handset operation sign, featuring a crossed cellular handset, which aims to ban spectators from using their phones during the show. But who really observes the rule?

Many users also seem unaware of the operating cost of a cellular phone, one of the most important things which should have been considered before buying one.

"I have discarded my cellular phone. My last billing statement reached Rp 1.2 million," said Winda, an account executive of a major newspaper in Jakarta.

Macky, a junior manager at a major business group, said that his cellular handset bill was paid by his company. "But I have to be responsible for making calls only related to business."

Seruni, a broker at the Jakarta Stock Exchange, argued that mobile cellular telecommunications is a must for her job. "Before taking this profession, I combined a beeper with a handset to save money."

Although all the mobile cellular telephone operators are private companies, competition in the country is totally based on services, as the tariff is controlled by the government.

Mobile cellular telephone operators charge Rp 388,400 for a new installation, which includes Rp 300,000 for the activation fee, Rp 8,400 for frequency utilization, Rp 25,000 for frequency administration and Rp 55,000 for the first-month charge.

The monthly billing statement stipulates the fixed Rp 55,000 for the monthly charge and Rp 8,400 for frequency utilization in addition to the fees based on the volume of traffic calls, which are subject to the 10-percent value added tax.

Several cellular operators admitted that the current billing system is very complicated, as the government has yet to deregulate the interconnection system between the cellular and public switching telephone network (PSTN).

The complicated traffic calls from cellular telephones are also caused by the zone divisions arranged by the state-owned domestic telecommunications operator PT Telkom for long-distance call traffic.

Analysts said that cellular telephone operators should no longer have recognized PSTN tariffing, but only air-time charges.

The current cellular telephone tariff structure in Indonesia consists of three components: an air-time charge, local call charge and long distance charge.

The air-time charge includes two tariffs: from cellular to fixed-telephone (Rp 275 per minute) and from cellular to cellular phone (Rp 550 per minute).

Local calls are categorized into two time divisions: normal and peak hour. Normal hours are between 3 p.m. and 9 a.m., while peak hours fall between 9 a.m. and 3 p.m.

Long distance calls are categorized into five time divisions which have different charges, depending on work days and holidays.

Cellular operators also set up three zone divisions. Zone one is for calls made within a 31 km to 200 km range. The range of Zone two is 200 km to 500 km, and the range of Zone three is over 500 km.

Telkom sets three time zone divisions: Zone one, between 30 and 200 km; Zone two, between 200 km to 500 km; and Zone three, over 500 km.

GSM subscribers must also remember that they will be charged for roaming if they receive long-distance calls when they are out of town.

For example, a subscriber registered in Jakarta who is visiting Surabaya in East Java and receives a call from a fixed telephone in Bandung in West Java will be charged Rp 1,650 per minute for the long-distance call in Telkom's Zone three.

Mobile cellular users will also face higher charges if they intend to use a number of optional features offered by the operators. Because the government controls both the tariffs for telephone calls and the installation fee, cellular operators can compete only in services, meaning that they should be creative in offering features.

The monthly charges for the features range from Rp 16,000 to Rp 25,000 a month depending on the additional facilities, which include call forwarding, voice mail, a fax service and short message service.

Table 1 Call traffic charges

Calls Normal hour Peak hour

(3 p.m.-9 a.m.) (9 a.m. - 3 p.m.) -------------------------------------------------------------------- Handset to Rp 275/minute Rp 275/minute fixed telephone X 100 percent X 125 percent

+ Rp 55/ minute + Rp 55/ minute

Handset to Rp. 550/minute Rp. 550/minute handset X 100 percent X 125 percent

(plus Rp 55 per minute (plus Rp 55 per minute

if calls to handset if calls to handset

from different operator) from different operator)

Table 2 Cellular telecommunications zone

Zone distance Long distance call division -------------------------------------------------------------------- Zone Distance Charge Time Workdays Holidays

(km) per minute -------------------------------------------------------------------- 1 20-200 Rp 950 9 a.m.-3 p.m. 125 percent 50 percent 2 200-500 Rp 1,320 3 p.m.-6 p.m. 100 percent 50 percent 3 > 500 Rp 1,650 6 p.m.-9 p.m. 50 percent 50 percent

9 p.m.-6 a.m. 25 percent 25 percent

6 a.m.-9 a.m. 100 percent 50 percent