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Indonesia cleans up SMS

Telcos spammed one other to harm service

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Indonesia has changed its telecommunications laws to ensure that the nation's mobile carriers pay for SMS messages sent to rivals.

Indonesia's current regime is a “sender keeps all” arrangement whereby a mobile subscriber's carrier charges for a TXT, but the recipient's carrier (if different) doesn't get a single rupee. The new regime, which comes into force on June 1st, will mean sending carriers must pay 23 rupiah – about a fifth of a US cent – to the recipient carrier. 140RP is a common price to send a TXT in Indonesia, but some telcos charged no fees for SMS as a lure for customers and a way of harming rivals.

The fifth of a cent may not sound like a lot of money, but it's worth noting that Indonesia has a population of nearly 250 million and one mobile carrier – Telkomsel - has over 100 million subscribers. As is the case in many developing nations, mobile phones are more prevalent than wired phones, thanks to easier installation of wireless infrastructure. Indeed, the CIA World Fact Book reports 220 million cellular connections compared to 39 million wired phones.

Indonesia's spiffing No Spam logo

Indonesia's rather spiffing No Spam logo

That makes for a lot of TXTs buzzing around in Indonesian airspace.

The 23RP interchange price is also important in the context of bruising competition in the Indonesian mobile telecoms market that has seen carriers offer marketers – often rather spammy markters at that – the chance to broadcast SMS to rivals' subscribers. Those schemes saw the originating telco scoop up marketers' cash, while also imposing costs on rivals and degrading the customer experience.

Some of those unsolicited SMSes led to premium SMS scams, whereby users are tricked into receiving several messages that debit many times the price of a conventional TXT to their accounts. Such messages and the schemes that caused them to be sent were banned in Indonesia in late 2011, resulting in a profit hit for some legitimate telcos who reported their non-carriage revenue fell to as little as 10 per cent of previous levels.

The new 23RP charge will give some a chance to recoup some of that revenue. It will also make a big difference for average Indonesians, who will likely receive less Spam.

Indonesia's government hopes they'll also notice an improved overall service, as the new interchange fee is expected to help carriers fund network builds. A press release outlining the new arrangements also expresses a hope that the new arrangements won't mean free TXTs disappear from offers made to Indonesians, but that the cost of such offers will now be properly shared. ®

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