A regulation requiring a certain minimum of local content on all 4G mobile phones sold in the country will be rolled out in the first half this year, limiting expansion of international smartphone manufacturers such as Apple.



By 2017, the government will require device manufacturers to have at least 40 percent of the contents of 4G smartphones produced locally. Few details have been unveiled on how the transition into this new regulation will take place, given the low capacity of local manufacturers and popularity of international brands.



'We will issue a minister regulation in the middle of this year to set a quota on the amount of local content that device manufacturers will have to meet by 2017,' said Communications and Information Minister Rudiantara.



The regulation on a minimum amount of local content is not strictly for hardware, software and intellectual property rights must also have a minimum amount of materials sourced from Indonesia, he added.



Critics raised concerns that Indonesians' access to technology will be limited and that costs for phone manufacturers could soar, blocking expansion in Southeast Asia's largest economy with a third of its 250 million people owning a smartphone.



'The United States shares these concerns, and strongly supports ensuring the information and communications technology, which can be instrumental to economic development, be openly available in Indonesia,' a US Trade Representatives (USTR) spokesman said, as quoted by Reuters.



Minister Rudiantara explained, however, that his ministry had not yet decided on the minimum level for the local content, saying that it would first carry out a public consultation by inviting all related parties to voice their stance regarding the planned regulation.



Most local device makers, such as PT Hartono Istana Teknologi and PT Sat Nusapersada, currently have at least 20 percent local content in their smartphone products, he said.



Indonesia Cell Phone Association (APSI) secretary-general Ina Hutasoit previously warned the government that they might need to impose a different quota of local content for each part of the production process, depending on the readiness of the manufacturers.



While cellphone importers were ready to comply with the regulation, they urged the government to set the quota lower than the planned 40 percent.



Indonesia, which exports tin commonly used for various electronics components, already produces a number of components for handsets. Some components, such as integrated circuits, however, still depend on imports.



Meanwhile, the Indonesian Cell Phone Dealers and Importers Association (Aspiteg) lauded the government's planned regulation as it could benefit local manufacturers.



'For us, 40 percent is actually quite low. We're already able to produce plastics, batteries and keyboards, among other things. So, we believe that we can aim for more as there are still two more years,' Aspiteg chairman Ali Cendrawa said.



Device manufacturer Hartono Istana Teknologi, which produces local phone brand Polytron, might be ready to meet the 40 percent quota by the time the planned regulation comes into force, as it already had around 35 percent local content on its smartphones, according to the firm's general manager for the mobile phone division Usun Pringgodigdo.

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