Surtax on cellular phone handset high: Executive

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.

Subscribers

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)