Telecommunications executives wary of Telkomsel's plan

Telecommunications executives wary of Telkomsel's plan

JAKARTA (JP): Telecommunications executives are wary of PT
Telkomsel's plan to attract more cellular telephone subscribers
by allowing them to buy any handset sold by their agents or other
distributors.

"Indonesia may become a technology garbage dump, unbranded
cellular handsets will likely penetrate the country's
telecommunications industry," chairman of the Indonesian
Association of Domestic Telecommunications Firms, Rahardjo
Tjakranigrat, told The Jakarta Post over the weekend.

Telkomsel, the new operator of the global system for mobile
communications (GSM), introduced a new marketing strategy which
allows subscribers to use any GSM handset. Although introduced in
Medan, North Sumatra, the marketing maneuver will be applied
nationwide.

A manager at PT Philips Development Corporation, Simon
Rikoemahoe, said that such a strategy will cause problems for
people who bought Philips handsets outside Indonesia as they can
not go to his company, the sole Indonesian distributor of
Philips, for any administration service.

Telkomsel's operations director, Garuda Sugardo, said the
company's business is charging for telephone calls and selling
subscriber identity module (SIM) cards.

"We are not dealing with the sales of handsets, but we
recommend people buy selected brands from local agents which
offer after-sales service."

The marketing strategy introduced by Telkomsel was described
by Minister of Tourism, Post and Telecommunications Joop Ave as
good for the public because it will allows a wider range of
handset prices.

GSM is a digital cellular mobile telecommunications technology
which allows subscribers to use any handset if they have been
issued a SIM card. Users just plug their SIM card into the
handset to make calls.

PT Satelindo, also a GSM operator, has six handset suppliers.
The company puts an international module equipment identity
(IMEI) set in all handsets sold in Indonesia. SIM cards issued by
Satelindo do not work in unlisted handsets.

Smuggling

Rahardjo said that he was worried that Telkomsel's marketing
strategy might encourage an increase in the smuggling of handsets
into Indonesia.

"Handset prices are still costly in Indonesia. When Telkomsel
sets the strategy, some people will look for cheaper ones
overseas and smuggle them into the country," he said.

According to Garuda, the prices of cellular telephone handsets
in Indonesia are 144.74 percent higher than those in other
countries due to the imposition of several taxes and duties.

A GSM handset distributor in Medan, PT Bahagia Pratama, which
is also a Satelindo distributor in Jakarta, sells several GSM
telephones at different prices in the two cities. For instance, a
Motorola 8200, which costs about Rp 1.3 million (US$576) in
Singapore, sells for Rp 4.18 million ($1,854) in Medan and Rp
4.95 million ($2,196) in Jakarta. (icn)