Indonesian Mobile Phone Retailers Rally on Registration Rule

(Bloomberg) -- Shares of Indonesian mobile phone retailers rallied after the government announced plans to introduce a measure in August to curb the distribution of illegal handsets.

The government will issue a rule on Aug. 17 that will allow the regulator to track and deactivate handsets which have not been sold by local distributors, Communications Minister Rudiantara said by phone on Wednesday. The government will use a device identification, registration and blocking system, known as DIRBS, to help trace invalid International Mobile Equipment Identities, or IMEI.

“With this regulation in place, upcoming illegal cellphones could no longer be used in Indonesia,” RHB analysts Michael Setjoadi and Jessica Pratiwi wrote in a research note. The new measure “will immediately eradicate black-market phones, which account for about 25% of the market.”

The measure was intended to protect the local industries and foreign investments by handset makers such as Samsung Electronics Co., according to Janu Suryanto, director for electronics and telematics at the industry ministry.

Shares of PT Erajaya Swasembada and PT Sat Nusapersada jumped 2.6% at close. Both stocks outperformed the 0.7% rise in the Jakarta Composite Index.

To contact the reporter on this story: Harry Suhartono in Jakarta at hsuhartono@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Naoto Hosoda, Kurt Schussler

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