Be prepared for prepaid cards

Be prepared for prepaid cards

There's no doubt about it, ever since financial turmoil struck
Indonesia, GSM prepaid cards have become the best choice for
cellular users.

Some people consider cellular phones a necessity. Without one,
they feel inconvenienced. Many people experience the need to be
reachable and accessible at any time, anywhere. Their mobile
phone meets this need. It is also viewed as a status symbol.

The crisis has turned the trend. When the price of handsets
increased, people turned to the secondhand market and
reconsidered their options: whether to continue paying their
monthly fees for cellular phones or cut expenses. The prepaid
card market has steadily surged ever since. It is estimated that
some 45 percent out of the total GSM customers use prepaid cards.

Three GSM providers in Indonesia -- PT Excelcomindo Pratama,
PT Satelindo and PT Telkomsel -- have introduced their own
prepaid card products called Pro-XL, Mentari and simPATI
respectively. The operators claim to be very successful in
selling their prepaid cards.

When Telkomsel launched the first prepaid card in Indonesia in
late 1997, many people considered the product as lacking in
features. Now people prefer using prepaid cards because they can
really save money. Others still regard the cards as a conniving
way for operators to make more money.

"Each product, postpaid or prepaid, has its own market.
Operators, on the other hand, will not create a prepaid card with
full features like postpaid cards have, otherwise there would be
no more regular users," Hasnul said.

He said Telkomsel, which currently leads the Indonesian
cellular market, predicted a corporate growth rate of between 16
percent and 25 percent this year.

"It's hard to estimate which will do better, postpaid or
prepaid cards. It will absolutely depend on the economic
situation. As long as the situation remains like this, prepaid
cards will also remain popular," he said.

Rudiantara of Excelcomindo agrees, "The number of GSM users
may continue to increase, but 35 percent out of the total figure
this year will be prepaid card users. This means we won't see any
increase in terms of quality."

He said that serious operators relied on postpaid cards which
offered better quality both for investors and customers.

But prepaid cards have in some ways also freed operators from
bad debtor cases. Reports said last year that some 30 percent of
cellular users in Indonesia were bad debtors.

It is predicted that the cellular phone industry will see
little growth this year, a maximum 10 percent, after standing
still last year.

Since prepaid cards will likely remain the best buy for people
needing mobile telecommunications, customers must consider what
they really need from their cellular phones.

In general, those who are likely to spend less than Rp 150,000
per month would be better off using prepaid cards. Because
postpaid cards come with a monthly Rp 71,000 subscription charge,
people who do not have a high rate of usage would be better
advised to use prepaid cards.

Prepaid cards are also easy for foreigners visiting the
country. It is not necessary to provide identification, a credit
card or anything else to buy a prepaid card. Just buy the first
package and continue with the vouchers to continue using the same
number.

However, foreign businesspeople temporarily in Indonesia
should be aware that prepaid cards are as yet unable to serve
wireless data transfer.

However, it may not remain that way since there are three
different companies introducing different gimmicks to promote
their products. There is also an emotional factor in choosing a
product, such as whether a provider will give a customer a number
of choices.

Mentari has standard rates. The time unit is based on one
second. Call times are not rounded off and there is no flat
tariff. This product is suitable for people who have many
relatives in town.

People who frequently travel out of town will find Pro-XL and
simPATI more convenient.

simPATI can only be used in the original coverage area. But
Telkomsel has introduced simPATI Nusantara which can be used
nationwide. For the time being, the latter product is only
available in Greater Jakarta. People outside the area can buy the
product in Jakarta and use it in Kalimantan, for instance, but
each time they make or receive calls, their remaining credit will
be cut by long-distance rates.

A conventional simPATI bought in Jakarta, for another example,
has more benefits for people who often travel in surrounding
areas since local call charges are imposed for calls made within
Greater Jakarta.

Pro-XL is appropriate for those who frequently travel within
Java and Bali/Lombok. Currently, there is no charge for receiving
calls while out of town, but outgoing calls are subject to long-
distance rates when made out of the original town.

Mentari, who at present only operates in Java/Madura, imposes
long-distance charges for both incoming or outgoing calls. With
per second charging unit, this product offers the most
competitive rates.

To make a local call to a fixed line between 8 a.m. and 6
p.m., for example, Mentari charges Rp 8 per second or Rp 479 per
minute, while Pro-XL and simPATI charge Rp 850 and Rp 520 per
minute respectively.

Both Pro-XL's and simPATI's charging unit is per 30 seconds.
For a call of less than five seconds, a user will loose 60
seconds. Any two-second call is free from Pro-XL.

SimPATI issues prepaid vouchers worth Rp 100,000, Rp 200,000,
RP 300,000, Rp 500,000 and Rp 1 million. There are two Pro-XL
vouchers, Rp 100,000 (with an extra value of Rp 5,000) and Rp
300,000, (extra Rp 30,000). Mentari offers four vouchers worth Rp
110,000, Rp 275,000, Rp 550,000, and Rp 1.1 million.

Validity period is important when buying a prepaid card.
Mentari offers 180-day validity period plus a 30-day grace
period. With a total 210 days or a seven-month active period, a
user seldom making outgoing calls will find this product
preferable.

Pro-XL has a maximum validity period of 90 days with a grace
period of 30 days, while simPATI Nusantara has various validity
periods up to 240 days, depending on the value of the voucher.

Remaining units with Pro-XL vanish at the end of the active
period unless users recharge the card shortly before expiration.
simPATI promises to keep the remaining units for users after
expiration and they are accumulated once the users refill the
cards.

Both Pro-XL and simPATI have several features to spoil users
with, such as voice mail and incoming short message services
which are not available with Mentari.

In addition, Mentari can be converted to a postpaid card, but
not the reverse. Pro-XL can be converted to postpaid (GSM-XL) and
vice versa. simPATI users, at the moment, cannot convert their
cards (kartuHALO) and vice versa.