Government persistent on 4G domestic content level

Ilustrasi (dok)

JAKARTA (IndoTelko) - Minister of Communications and Information Technology (MCIT) Rudiantara finally responds the criticism of Smartphone vendors that are members of the Indonesian Telematics Device Industry Association (AIPTI) about the domestic content level (DCL) for 4G industry which would emphasize on software.

"Regarding on the criticizing brands on the plan (calculation DCL), just see how much investment and income they have here, they are welcome to criticize if it is up to 20%," said Rudiantara lately.

So far there are no exact figures about the DCL calculations of the Ministry of Industry. "The philosophy is that we do not want this to be focused on hardware only. If we rely only on the hardware only then this country will be a blue collar country, because of the global brand will compete with the cost of manufacturing," Rudiantara explained.

The 30% local content for 4G devices are already set in stone, only the structure is still unconfirmed. "Whereas this year only 20% compliance must be met by a 4G device," Rudiantara said.

The minister said 4g Smartphone vendors have a tricky way by selling 3g goods in the market, but the consumer can use the 4G technology by updating the firmware after the customer bought the product.

"I will discuss it with the Minister of Trade for this matter. It is technology it will always circumvent the regulation. We will follow up on this later," Rudiantara said.

Earlier, MASTEL Institute Chairman Nonot Harsono assessed that the DCL policies for 4G device is considered to be deviated from the original purpose if accommodating the majority of software calculations in the calculation of the local portion for a 4G Smartphone.

"A policy that is made with a philosophy then it has a purpose. To my knowledge 4G DCL policy was the initial objective was raised back in the local manufacturing industry. If it is focusing on the software, then it means it has lost its spirit," Rudiantara said.

The government seems to not providing the business certainty for manufacturers who already invested in order to respond the issued 4G DCL policies. "How can you equalize owning a factory or to have partnership with local manufacturing just simply by installing applications that have a million customers in the fulfillment of DCL? It's been misguided," he said.

Government should not worry about 4G DCL policy if it is focusing on hardware will end up such as the WiMAX DCL because there are differences in economic scale. "We are talking about 4G, now there are already 20 million 4G Smartphone’s in circulation. Although the operators are still in the developing stage of their infrastructure.  If now we are hesitant to policy, we could miss opportunities for the future," Harsono said.

Indonesian Telematics Device Industry Association (AIPTI) is still struggling to keep the government to leave out the 100% software option is deemed to comply for 4G Smartphone DCL software.

"We are still fighting until the last drop of blood. I've sent a letter to Mr. Jokowi (President Joko Widodo), met Mr. JK (Vice President Jusuf Kalla) to against the 100% DCL software for 4G Smartphone. If it is still forced in the inclusion in the technical guidelines Instructions, we will sue legally," said Vice Chairman of the Indonesian Telematics Device Industry Association (AIPTI) Lee Kang Hyun, recently.

The Ministry of Communications and Information Technology (Kemenkominfo) has completed its work by issuing Regulation On the Domestic content level policy on 4G device.

The regulation mentioned that starting 2016 the vendor must comply to the Domestic Content Level (DCL) with 20% subscriber station (Smartphone) and 30% base station. Then in early 2017 will be 30% subscriber station and 40% base station. The regulation being waiting for is from the Ministry of Industry on the DCL Calculation Procedures.

There are five 4G LTE Smartphone compositions DCL schemes in the draft procedures for calculation of the DCL. The first is 100% DCL (hardware) and zero percent of software. Second, 75% hardware and 25% software. Third, 50% hardware and 50% software, fourth, 25% hardware and 75% software. Last is zero percent hardware and 100% software.(es)