Tight screening helps cellular operators cut overdue bills

Tight screening helps cellular operators cut overdue bills

JAKARTA (JP): The rate of overdue subscriber bills at local
cellular operators has declined significantly, with an industry
executive crediting the development on more exacting methods to
prune out unsuitable applicants for services.

The director of commerce of PT Telkomsel, Hasnul Suhaimi, said
on Monday that overdue bills at his company decreased to about 7
percent from around 11 percent last year. The industry average is
now below 10 percent from about 15 percent last year.

He attributed much of the decline to the company's tighter
assessment of prospective customers, particularly of applicants
for Telkomsel's postpaid billing card product, Halo.

"We have been more careful in giving approval to new
applicants by having our team check on the applicant to make sure
that the person is really qualified to accept the obligations as
a customer."

Fewer acceptances are being made now, he said after the
handover of a Telkomsel donation of about Rp 200 million to
Unicef.

Hasnul said Telkomsel's monthly card sales declined to 25,000
cards from an average 35,000 before the tighter assessment was
introduced.

Telkomsel now serves about 350,000 Halo customers and earns
average monthly revenue per subscriber of about Rp 200,000.

Stricter application procedures also are being applied by the
other two GSM operators in the country, PT Satelindo Palapa
Indonesia (Satelindo) and PT Excelcomindo Pratama.

An executive of PT Satelit Palapa Indonesia (Satelindo)
acknowledged recently the company was sometimes forced to use the
services of debt collectors to handle overdue bills.

"This strategy worked well. But we only use them (the debt
collectors) if the customer did not respond to our initial
reminder calls and written warnings," he said.

There are about 180,000 active Satelindo postpaid billing card
subscribers.

Satelindo reduced the level of unpaid bills to about 5 percent
this year from around 10 percent in 1998, he said.

"The level was even higher at between 30 percent and 45
percent in mid-1997. We managed to bring it down to below 15
percent by mid-1998," he added.

Separately, corporate communications manager of PT
Excelcomindo Pratama, Ventura Elisawati, said the rate of overdue
bills to her company now stood at below 2.5 percent of
Excelcomindo's total revenue.

"The level stood at two digits in the middle of last year but
it has gradually declined to single digits early this year due to
our extensive antidebt programs."

She said the company began cleaning up bad bills beginning in
late 1997 by expelling delinquent customers, but some could not
be traced because they provided false identities or addresses.

Excelcomindo now serves about 60,000 XL customers.

The Indonesian Cellular Telephone Association reported early
last year that cellular operators lost about Rp 200 billion due
to unpaid bills.

According to a reliable source in the industry, the level of
bad debts for all operators in the industry averages about 15
percent.

"It was above 20 percent last year. The level is in the double
digits because it also includes the high level of bad debts
suffered by non-GSM operators," the source added.(cst)