Operators in Indonesia Need Incentives

Ilustrasi (dok)

JAKARTA (IndoTelko) - Telecommunication operators proposes to the government to provide incentives in the form of a reduction or suspension of regulatory costs in a slowing pace of the national economy.

"Regulatory cost is one fixed costs component that is relatively large contribution for operator expenditure. If there is an incentive, it could encourage operators to continue to invest," said Secretary General of the Association of Telecommunication of Indonesia (ATSI) Merza Fachys.

Merza said that the regulatory costs that have been paid by the operators namely the frequency usage fee (BHP), telecommunications frequency usage fee (BHP Telekomunikasi) and contribution for Universal Service Obligation (USO). This component accounts for nearly 20% to the fixed costs spent by operators each year.

Merza suggested that all parties to sit together to discuss the procedures and forms of incentives for telecommunications operators so that businesses can survive in difficult conditions.

"The current environment is very difficult for operators with the negative earnings before interest, tax, depreciation and amortization (EBITDA) or slightly positive. Usually they have a fixed cost to reach 60% -70%, the investment is majority in foreign currency, low end customers that their purchasing power is currently being hit," Merza described.

Previously, the government announced tax holiday for a number of sectors including telecommunications where the investment requirement to have these facilities is reduced from Rp1 trillion to Rp500 billion.

The Minister of Communication and Informatics Technology Rudiantara on several occasions has a discourse for non-tax state revenues (PNBP) that are usually obtained from regulatory costs as a performance measurement of the ministry.

"Non-tax state revenue is like the government takes all ahead and operators pay for the uncertain. It is better being loosened, but there is tax to obtain later," he said. (es)