Wednesday, 28 October 2015


The Ministry of Industry ensures support for the steps of the Ministry of Communications and Information Technology who has set the rules regarding Local Content (TKDN) in the manufacture of 4G device. Local content in 4G devices to reach 30 percent effective January 1, 2017. The regulation on Technical Requirements of Telecommunication Tools and Equipment Based on Long Term Evolution Technology was signed by Rudiantara, Minister of Communications and Information Technology in Jakarta, on Monday (July 6). The signing was done after a coordination meeting is held with the Minister of Industry, Slaeh Husin, and trade Minister, Rachmat Gobel.

“The support we provide is in the form of revision of Regulation of Minister of Industry No.69/2014 to support this policy, “said Industry Minister, Saleh Husin, after holding the coordination meeting. He added that later, calculation of Local Content (TKDN) for smartphones is not only about the hardware, but also the software. The end goal is to reduce imports of smartphones, which have entered Indonesia.

“In 2012, Indonesia imported 70 million units of smartphones and in 2014 we scaled it down to 54 million units. So it’s down about 23 percent, and in the future we will continue to lower it down, “he said. Besides, there are already 16 brands of phones assembled in the country that has met 20 percent local content. Those brands are Polytron, Evercross, Advan, Axio, Mito, Gosco, SPC, Asiafone, Oppo, Haier, Huawei, Smarthfren, Bolt, Ivo, Lenovo, and Smasung. Total production capacity reached 23.02 million units per year.

Application Designers

Saleh husin is also confident in the ability of Indonesia’s young generation to cultivate the development of smartphone applications that can contribute to the improvement of local content. “It’s also a good chance that application designers, who are still in school and collage as well as young professionals, have the opportunity in this giant industry,” said Saleh.

Director General of Metal, Machinery, transportation Equipment and Electronics of the Ministry of Industry No.69/2014 is carried out by calculating the software and creative components. “The revision is performed gradually according to the needs of the partners of the Ministry of Communications. Now they must immediately release the use of local content-based 4G LTE, “he described.

The Ministry of Industry said that the revision of Regulation of the Minister of Industry No.69/2014 only contains general regulations related to local content for electronics and telematics industry, and calculation details (technical guidelines) will be regulated in Regulation of the Director General of Metal, Machinery, Transportation Equipment and Electronics. Besides, the revised regulation which is issued on the first occasion is the transition rules for the validation of local content certificate that has been verified by an independent surveyor.

“The next thing to be done is to accommodate the business model of information and communication technology based on software or design house. The Ministry of Industry will conduct a study within the next six months,” said Putu.

Three ministries

After the signing, the minister of Communication and Information, Rudiantara, said that the decision is the joint work of three ministries, namely the Ministry of Communication and Information Technology, the Ministry of Trade, and the Ministry of Industry. “The reason is because the stipulation and oversight of this policy should be carried out together. It also shows that the three ministries go hand in hand, so it always shows a close coordination, “he said.

He added that while waiting for the implementation in 2017, regulations that are more technical will be issued through a joint circular of the three ministers. As for the potential of added value targeted by this policy is quite large, considering that Indonesian smartphone imports reached USD 3.5 billion. “Even if the illegitimate ones are taken into account, the value reached USD 4 to 5 billion,” he said.

The rules on local content were applied to 4G device with Long Term Evolution Frequency Division Duplexing (FDD LTE) technology. While, local content for 4G device with LTE-TDD technology may come info force in 2019. (E)

Business News - July 8, 2015

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