Govt. may limit licenses for cellular operators to protect customers

The government may limit the number of licenses issued to cellular operators wanting to enter the telecommunications market, citing fierce competition in the industry that has led to "panic and excessive marketing efforts",The Jakarta Post reported Saturday (29/12/07).

Director General of Post and Telecommunications at the Information and Communications Ministry, Basuki Yusuf Iskandar, said he believed the country had "enough" cellular operators and that the government needed to issue some regulations to control the competition among them.

"We've seen exceedingly fierce competition. This has caused a kind of panic among operators, which has led to excessive marketing efforts, price wars and so on," said Iskandar.

"If the cellular operators spend most of their money to beat competitors in such a way, what will be left for the customers?"

The telecommunications industry had surpassed the cigarette industry as the country's top advertising spender, he added.

Basuki said the government planned to draft and issue regulations to control competition, with the main focus on “predatory” pricing practices, in which some operators offer services with "zero fees".

"I see a tendency toward excessive price wars. If that continues to occur, only the big operators will survive and that can mean a monopoly in the end. Predatory pricing is a very dangerous practice and we need to make regulations on it immediately."

Also set for regulation was pricing on premium SMS rates, Iskandar said. There are currently 11 operators in the sector.
_________________________ Indonesian Business and Investment News Aggregator