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)