Regulator says 35% of CAPEX must be spent on Indonesian equipment

30 Oct 2009

The Jakarta Post reports that on 16 October the Indonesian Ministry for Communications and Information Technology ruled that all telecom companies must spend 35% of their capital expenditure on equipment manufactured domestically. In addition, at least 40% of the gear must be locally sourced, rising to 50% within five years. The decision was not made public until this week. Failure to comply could lead to the withdrawal of operators’ concessions. One operator has welcomed the intention to develop the local components industry but questioned how practical the proposal really is. ‘I don’t think the domestic industry is ready to supply our requirements,’ said the president of Excelcomindo (XL), Hasnul Suhaimi. ‘I think Indonesia needs new advanced technology like WiMAX, but we can’t build such towers with high levels of local components because currently the local manufacturers don’t produce WiMAX components,’ he added.