Tue, 25 Oct 1994

Surtax on cellular phone handset high: Executive

JAKARTA (JP): The large amount of government levies keeps the prices of mobile telephones in the country quite high, an executive says.

"The government's levies on the sales of handheld telephones are equivalent to 182.5 percent of the import prices of the phone equipment," a director of PT Satelit Palapa Indonesia (Satelindo), Adi Rahman Adiwoso, said yesterday.

He explained that the levies include a 30-percent import duty, 10-percent value added tax (VAT) and 30-percent luxury goods tax.

Satelindo, a private satellite and telephone operator, sells handheld telephones using the Global System for Mobile Communications (GSM) at a range of between Rp 3.95 million (US$1,811) and Rp 5.95 million each.

Adi said the prices include the installment fee, subscriber identity module and first month subscription fee.

"Satelindo will not charge subscribers for any incoming calls. We just collect frequency utilization fees of Rp 8,400 per month which will then be passed on to the government," he said, adding that monthly subscription fees will be set at Rp 37,500 and call fees at Rp 100 per every 15 seconds.

The government currently plans to arrange a Fundamental Technical Plan, an integrated regulation on the telecommunications business in the country, which will likely include charges on air utilization.


Satelindo has invested Rp 67 billion in its GSM project, which includes the establishment of facilities for the operation system support (OSS), network sub-system (NSS) and base station sub- system (BSS). The company plans to have marketed 30,000 cellular phone lines by the end of this year, of which 6,000 have been ordered since the launch of its marketing in early September.

Adi said that the operation of the GSM project will begin on Nov. 1 and "we plan to complete connection works within one day, as compared to 60 days at present."

Satelindo, owned 30 percent by the state-owned domestic telecommunications company PT Telkom, 10 percent by the state- owned international telecommunications company PT Indosat and 60 percent by PT Bima Graha, a subsidiary of the Bimantara Group, offers six brands: Nokia, Ericsson, Phillips, Alcatel, Motorola and Siemens.

According to Adi, 50 percent of the first 6,000 subscribers preferred to use costly phone handsets.

He also said that by the end of this year, the coverage of his company's telephones will include the greater Jakarta area, which will be expanded next year to include Cikampek, Purwakarta and Anyer, all in West Java.

Within the next five years, some 30 cities in 12 provinces will be covered by Satelindo's GSM system, he added.

Besides Satelindo in Jakarta, Telkom also operates a GSM system for Riau province. The government has already given Telkom approval to run a nationwide GSM system in cooperation with Indosat. (icn)