Original URL: http://www.theregister.co.uk/2013/07/22/indonesia_ponders_500_sim_card_price_hike/

Indonesia ponders 5,000% SIM card price hike

Carrot, stick, come out to handle 50 million subscribers churning each month

By Simon Sharwood

Posted in Government, 22nd July 2013 06:31 GMT

Badan Regulasi Telekomunikasi Indonesia, the communications regulator in the world's fourth-most-populous nation, will reportedly increase the cost of SIM cards by 5,000 per cent.

The move may seem odd given the nation has the world's 43rd highest GDP and ranks 158th for GDP per person, at just $US5100 per capita.

Easy and cheap access to mobile phones seem just the thing for a developing economy, rather than a plan that pushes up the price of a SIM from about $0.20 to $5 or even $10.

The reason for the rise is that Indonesia already has nearly 250 million mobile subscribers for its 251 million people, 20 per cent of whom change SIMs each month, according to Tech In Asia.

One reason for the frequent changes, says Indonesian news outlet Detik is SIMs being all-but given away as promotional tools or as a way of creating lists of mobile numbers so that advertisers – scrupulous or otherwise – can send marketing TXT messages.

Indonesian carriers have form with such tactics, as some have in the past flooded rivals' networks with TXT spam, either to degrade service or to deplete subscribers' pre-paid balances under pay-to-receive arrangements.

Chasing better deals is another reason Indonesians buy new SIMs, but as the nation does not have number portability doing so erodes the utility of mobile phones by making it harder to call someone!

Whatever the reason Indonesians acquire new SIMs, the resulting churn is a problem for local telcos and also depletes the pool of phone numbers available in Indonesia. Enter Badan Regulasi Telekomunikasi Indonesia with a pricing carrot and stick that it is hoped will slow down SIM buys and restore a little order to the local market. ®