Fuel price hike takes toll on Indonesian Mobile industry

28 November 2008
Indonesia, Telecommunication

In September 2008, total retail unit sales of mobile phones in 23 major cities in Indonesia only increased by 4.3% compared to the previous month. As a comparison, in 2007 growth was 14.5% during the same period.

Some retailers have attributed this to the fuel price hike of 33.3%implemented last May. The decision to increase the fuel price was taken by the Indonesian Government after the increasing price of the world's crude oil to over US$140/barrel. This impacted on the price of many primary needs products.

At present, the Indonesian Government is planning to adjust the fuel price by decreasing it by 8.3% after the price of world's crude oil reaches about US$60/barrel. Although this is only a minor adjustment, the Indonesian industry, including mobile phone manufacturers and operators, are hoping that this price change will trigger economic growth.

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GfK Retail and Technology, www.gfkrt.com