Syahrial Ali's Blog

Deregulation in telecommunication sector tends to encourage competition in multi-operator environment. The same phenomenon also happen in Indonesia. Currently there are 10 cellular operator with 12 types of services, namely 6 cellular services and 6 fixed wireless access services.

Indonesian big market has attracted many investors in telecommunication industry. According to the data from Directorate General of Post and Telecommunication, till the end of 2008, Indonesian mobile subscribers has reached 150 million. This is one of the magnet why the investors come to Indonesia.

The competition among mobile telecommunication operators have increased sharply which are supported by two main things namely the need for communication itself and the affordable tariff. In terms of communication need, mobile phone has become life style not only for high and medium class society but also for low class society. With regards to tariff, the tariff war among cellular operators has brought the tariff down to the lowest level. Moreover, currently there are many low cost handsets available in the market. With these things, the number of subscribers has sky rocketed.

Responding to the high competition, a control mechanism is released by telecommunication authority. To ensure that the competition is healthy and to protect the customers’ right, every telecommunication providers are obliged to provide a service within the standard quality of service. This rules is based on Minister Information and Communication decree no 12 in the year of 2008.

There are 4 main items in the Cellular Quality of Service Rule namely: Service Performance, Network Performance, Reporting, and Assessment, Reward & Punishment.

The service performance consists of billing complaint, other complaint, activation and customer care response. The billing complaint shall be less than 5% of the total complaint, and all complaint shall be resolved in 15 days. 98% of activation both for post and prepaid shall be finished in 24 hours. 85% of Customer complaints shall be finished in a year (this is to anticipate if most complaint happen at the end of the year). With regards to customer care, 75% of all calls to service center shall be picked up by operator in 30 seconds. The time is calculated after the caller presses a special digit which mean he/she wants to speak to operator.

In the network performance, the dropped call and blocked call rate shall be less than 10% from total calls. The test shall be done by drive test and static test with a minimum sample 260 and 200 calls respectively for each city/region. The call shall be 60 seconds holding time and 10 seconds pause time. In terms of short message service, 75% of the number of short message shall be sent at maximum 3 minutes. The total sample of SMS test is 100 messages with 160 characters long and the interval time to send the sms is 10 minutes.

The rule is also requested operators to report their quality of service performance, once a year. The report shall be submitted not late the second week of February. Besides that operator shall update and publish its quality of standard on quarterly bases in its own website.

To assess operators’ report, Indonesian Telecommunication Regulator performs quality of service measurement once a year. When the measurement result is not meet the rule criteria, a punishment such fine will be applied to the operator. The moral is the regulator wants to protect customers from bad service quality.

Almost all cellular operators in Indonesia right now are promoting their incredible low tariff to attract new subscribers. We may see their advertisement in various media such as: Free call for 3 months (Smart Telecom), Rp 1/call (Axis World), Free call and SMS (XL, actually from 12am – 6 am), Rp 0.5/second (Telkomsel), Rp 9/sec for 1 minute, then free (Mobile-8), Rp 60/call (HCPT), Rp 1/character for SMS (Bakrie). The customers become confuse which operator is suitable for him/her. Will he/she try every operator? Of course not.

As written in previous posting value-communication and standard-quality-of-services, several service providers’ networks are not ready to serve such number of new subscribers. Hence their quality of service drop significantly.

According to the survey conducted by Sharing Vision on April 2008, the Indonesian customers’ dissatisfactions rise by significant number both for GSM (global system for mobile communication) and CDMA (code division multiple access) subscribers. The survey items consist of service features, network response and the clarity of the voice. The figures are 7%, 19% and 16% respectively. This figures are far above the same survey on August 07, which only 3%, 5% and 2% respectively.

The survey also noted that the customers are fooled by the advertisements. They feel that operators seemed to hide some extra cost in their tariff. On each advertisement there is a star (*) which mention that terms and condition applied. It means that there is a special condition when the tariff applied such as on-net call, time of call, for special product only, etc.

So, the tariff war has result not only the drop in quality of services but also disappointed customers. All customers now will experience the low quality signal, drop call, call congestion, undelivered or delay SMS, etc.

In operator side, what have they got? New subscribers only. As the tariffs are going down to the lowest level, how much money can they earn from such numbers of new subscribers? In my opinion, tariff war has damaged both the customers and the operators. Do you think so?

We are waiting for regulator to fix up the mess in Indonesian Cellular Telecommunication. The ministry rules on Minimum Standard of Quality will be applied started on July 21st 2008. Since then, hopefully we can have a better telecommunication services.