Siemens' cellular sales drop 60 percent this year

JAKARTA (JP): PT Siemens Indonesia, a subsidiary of the Germany-based technology company Siemens AG, will suffer a major drop in the sales of its cellular telephones this year due to the country's worst ever economic crisis, a company executive said here on Tuesday.

Robby Darmasetiawan, the general manager of PT Siemens Indonesia, said that cellular phone sales were estimated to reach only 60 percent of the targeted 15,000 units.

He attributed the sluggish sales on the sharp depreciation of the rupiah against the U.S. dollar which caused a sharp increase in the prices of the cell phones.

The purchasing power of Indonesians dropped significantly with the rupiah's plunge, making mobile phones no longer affordable to most Indonesians, he said.

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. However, it is still well below the precrisis level of around Rp 2,500 in July of last year.

Robby estimated Siemens would be able to sell at least 20,000 cellular phones next year as the stronger rupiah would help improve the market.

"I am confident that the situation will be getting better next year and I believe we can sell about 20,000 units of Siemens's mobile phones," he told reporters at the launching of the newest product in Siemens SL 10 cellular phone line.

According to Robby, Siemens cellular phones control 12 percent of Indonesia's mobile phone market, its largest market in Southeast Asia.

The prices of Siemens mobile phones are currently between Rp 2.5 million and Rp 3.25 million.

Besides cellular phones, Siemens Indonesia also sells telecommunication and power generation equipment in Indonesia.

The country manager of PT Siemens Indonesia, Leo J. Lammering, explained that the company's total sales reached US$800 million in the 1997/1998 fiscal year which ended on Sept. 30.

He said that the company also received new orders worth $300 million during the year.

Despite the crisis, Siemens is committed to further expansion of its Indonesian market through alliances or equity partnerships with Indonesian companies, said Lammering.

"Although this economic situation and the reduced growth potential is not directly in favor of expansion, the company is full of confidence in our activities in Indonesia," he said.

In July 1997, he said, Siemens's subsidiary Osram signed a joint venture contract with a local partner to establish PT Osram Indonesia.

PT Orsam Indonesia, he added, has been operational since October 1997, producing light bulbs for both the Indonesian market and the export market in the region. (29)