JAKARTA (IndoTelko) – The Indonesian government demands 40 percent of local content in the network Frequency Division Duplexing Long Term Evolution (FDD-LTE) or 4G in 2017.
"We will apply the Local Content Level (DCL) for 4G gradually both in the network and consumer devices," said Director of Telematics Electronics Industry, Directorate General of High Technology-Based of the Industry Ministry Ignatius Warsito, yesterday (3/2).
Warsito said that at least 30 percent of the local content for the network is expected to be applied by 2015, which expected to increase to 40 percent by 2017, as for the local content level for consumer devices is expected at 20 percent by 2015 and increase to 30 percent by 2017.
"The local content level portion to companies is set realistic and gradually in order to increase competitiveness and deepening the local content industrial structure," Warsito said.
Based on Minister's Decree (Ministry of Industry) No. 69/2014 on Terms and Procedures for Calculating the Local Content Level Value on Electronics and Telematics Industry, the value determination is divided into two, namely 80 percent for manufacturing and 20 percent of local content development.
Director of the Post and Information Device Directorate of the Communications and Information Ministry Bambang Suseno said that the local content level calculation methodology is not only determined by the constituent components but also through employment or the human resources (HR), to finance R&D (research and development) both in universities and other educational institutions.
According to Bambang at least eight vendors in the industry who have expressed their readiness for establishing the local content level to the fourth generation 4G mobile technology sustainability with the long-term evolutionary adaptation listing, such as Polytron, Mito and Evercoss.
Aries Indo Global Marketing Director Janto Djojo said that his company could qualify the local content level from the government. "We are trying to accept the government regulation," he said.
Advan Marketing Director Tjandra Lianto said that there are currently a lot of vendors who produce local components in Indonesia. So far, they are only building assembly plants.
"If the government provides incentives, then the local content targets can be achieved. Currently, the components are still imported, it is heavy," he said.
Speedup VP Product Marketing Rahmat Widjaja said that the company's factory that will be opened in the second quarter of 2015 can met the local content level approximately 20 percent.
"The government should provide clarity on the regulation of meeting the need of local content for mobile phones. In addition, we need tax incentives to build the factory," he said.
Previously, the government proposed the existence of a certain percentage of local content for the application of TDD and FDD LTE technology.
Apart from that, the government reportedly have also continued discussing plans to implement a luxury tax for smartphones with a specific price and asks every IMEI numbers of every 4G smartphones must be registered when imported into Indonesia.(es)