Reality Check: Wireless Service In Indonesia
A reader, whom I’ve been engaged in many private conversations with about how much the mobile operators here in the U.S. rip us off, sent me information about how much mobile phone service costs in Indonesia, along with some basics about how the service works. For the record, Indonesia is the fourth biggest country by population, behind China, India, and the U.S. It is, therefore, a somewhat relevant comparison.
Each outbound minute of calling to a landline costs Rp. 531/minute for the three carriers, calling to a mobile on the same provider costs Rp. 540-813, depending on carrier, and calling a mobile on another operator costs Rp 540-975, depending on carrier. SMS (text messaging) costs Rp. 250-300 within Indonesia, Rp. 500 to locations outside Indonesia. The monthly access fee? Rp. 350, unless you spend a certain amount on your bill.
To put this in American pesos dollars, a minute of calling to a landline costs less than $0.06 a minute, a minute of mobile calling costs less than $0.09, SMS costs $0.03 within Indonesia, $0.05 outside. The access fee is nearly $0.04. And, of course, these costs are for outbound only calls/SMS, incoming calls/SMS are free as they should be.
Let’s compare this with the typical rate plan here in the US, where you pay a certain amount of money (minimum $39.99) for a certain amount of minutes (450 is the minimum, I think), pay a ridiculous amount per minute for overage (up to $0.45, depending on the plan), include made-up fees (“regulatory recovery charge” comes to mind), and of course you pay for incoming and outgoing calls. You might get free mobile-to-mobile or night-and-weekend minutes, but let’s face it–how many people actually use their phones that often during those times?
If you were to actually make 450 outbound minutes worth of calls to a mobile on another carrier in Indonesia–the worst case scenario-it’d work out to almost exactly what you’d pay for a 450 minute rate plan per-month with all the taxes and made-up fees. Of course, if you use less minutes, you don’t actually have to pay for 450 outbound minutes, you pay for–and get charged for– exactly what you use.
And don’t even get me started on SMS charges, which without a package can cost up to $0.20 a pop. International SMS? $0.25 a pop, and you can’t buy packages that include international SMS. How can international SMS only cost $0.05 a message in Indonesia and a quarter in the U.S.?
The CTIA says that other operators worldwide want to become more like the U.S. carriers. No wonder: they’d love to get away with charging for service they don’t provide, and overcharging for the services they do provide, just like U.S. mobile operators! Pity most people in this country haven’t seen how it works elsewhere to know there’s a better way, let alone demanded it.
What irks me even more is that large business demanded a better way, and have gotten it. T-Mobile and AT&T offer to large corporations per minute plans, where you pay a monthly access charge with no minutes included. All inbound/outbound minutes are charged a per-minute charge on the order of what you pay for a minutes of calling in Indonesia. SMS and Data services are add-ons and are charged at the same rates as consumers for similar services.
Why aren’t these plans offered to average consumers? They are, in a sense, in the form of prepaid service. However, all prepaid plans in the U.S. charge far too much per minute. T-Mobile is the only operator approaching a reasonable per-minute rate, but only if you buy 1000 minutes (which costs $100). However, I’d like to see these available as a post-paid plan available to consumers as well. Doubt it will happen.
What do you think? Are we getting ripped off here in the U.S. by the mobile carriers? Leave your thoughts!
(Photo by Wm Jas, used under a Creative Commons license)
Bookmark with: del.icio.us Digg it Furl iFeedReaders ma.gnolia Maple.nu RawSugar reddit Simpy StumbleUpon
Tags: ctia, mobile network operators, ripoff Fnord
Pingback by EQO Community | Blogs and Forums
Pingback by Eric's Site - Eric's
Pingback by Surya
Pingback by The PhoneBoy Blog
Pingback by Pages tagged "service"
[...] = “34d024″; var mooter_wrapper_url=”"; var run_method = “onload”; var mooter_target = “0″; Reality Check: Wireless Service In Indonesia saved by 1 others Gorillazfan1230 bookmarked on 01/15/08 | [...]
Comment by Stefan Constantinescu
And the GDP per capita of Indonesia is $3,900, while the USA is $44,000. That is an order of magnitude more, yet our rates are only double or sometimes triple. I think we get the better end of the deal. It’s all relative.
Trackback by The Mobile Technology Weblog
Wireless Service In Indonesia Compared To The U.S….
A reader sent me some information about mobile phone charges in Indonesia, which is the forth biggest country in terms of population, behind the U.S., India, and China. Quoting from my piece on phoneboy.com: Each outbound minute of calling to……
Comment by spg
for prepaid in the USA i recommend pageplus. it is an MVNO opoerating on the verizon network. customer service will assist with unlocking and programming any CDMA phone from any carrier. the price depends on the amount of payment you make. but if you make payment in increments of $80 you get 1400 minutes(5.5 cents per minute). almost twice as many as t-mobile; you only need to p[ay once every 120 days – if you pay $10 your rates is higher but are still good for 120 days and your previous balance rolls over. another good one is stimobile you can get a plan with .25 cent per day access and call for 7.9 cents per minutes including free international to lots of countries. i know about a dozen more prepaid all that are MUCH cheaper than the big guys; you also get the distinct advantage that you actually talk to a knowledgeable person who cares if you need to call customer service.
the thing about prepaid in USA is you need to deal with the little companies that do not spend there whole budget on advertising but give good rate instead.
Comment by Antony Pranata
I couldn’t agree more that North American operators (US and Canada) has very high price for their wireless services.
However, I also agree with Stefan. The GDP per capita income for Indonesia is very low. Stefan’s number, $3900, is a bit optimistic in my opinion. The GDP for Indonesian should be lower than this. Wikipedia mentions something around $1800 for year 2006.
Btw, I am originally from Indonesia although I live in North America now.
Pingback by Indonesia » Blog Archive » Seno Gumira Ajidarma
[...] Reality Check: Wireless Service In Indonesia [...]
Comment by PhoneBoy
@spg: Point me at a GSM-based MVNO that gives you 1000+ minutes for less than $100 with the minutes being good for a year and we’ll talk.
@stefan and @anthony: Yes, I know Indonesia has a much lower GDP per capita than North America, which is why I said it wasn’t *exactly* an Apples to Oranges comparison. Pricing is one thing, but the whole business model–pay for what you use versus buying “bundles”–is another.
People *think* they are getting a good deal in the U.S.–and maybe some people are–but the vast majority would do better under a pay-per-use regime. Anyone with a $40 (or cheaper) price plan is probably *very* profitable for the carrier. Why? Because they don’t use a lot of minutes.
Pingback by SMS Text News » Archives » The sorry state of affairs in the US mobile marketplace
[...] Reality Check: Wireless Service In Indonesia The CTIA says that other operators worldwide want to become more like the U.S. carriers. No wonder: [...]
Comment by BigFatGeek
Another data point – Norway:
My plan has 120 minutes and 90 sms per month included. After that I pay about $0.10 per minute for voice, a bit less per SMS.
How much is the flat fee per month for this? $0. I don’t use that many minutes, and haven’t paid a phone bill for years
Pay some small flat fee per month, and you get much lower rates.
Oh, and our GDP per capita is higher than the US.
Comment by spg
phoneboy,
use pageplus and buy one $80 refill and two $10 refills. it comes to 360 days and almost 1600 minutes. as an added bonus your SMS come to under $0.04 each. for me the main thing is that these deals are nothing new; but everyone i mention them too is very surprised they even exist. i have lived in many parts of the world and back here at home in the USA I have to say that when it comes to mobile phones we do far less research on the less known services; nearly everyone just goes straight to the big guys with there overpriced plans and lack of customer service.
spg
p.s. also companies like pageplus or stimobile answer the phone when you call them instead of letting you sit on hold for 45 minutes; and they let you use any phone as long as it can be unlocked and the PRL(cdma roaming list) updated.
Comment by spg
i just want something. having lived in many different places i credit the consumers for lower rates where they exist; at least in the wealthier places like between european and NA countries. where low use consumers have adopted prepay(or post pay per minute) and reject the telecom move to minute buckets we have lower overall charges. believe it or not everyplace started with per minute billing and minute buckets were promoted by operators everyplace. in some of those place it was embraced(like the USA) in other customers were outraged and operators reacted to keep them happy. similarly there are lots of small MVNO alternatives both in NA and in europe. they tend to be ignored by consumers in NA(with the exception of some immigrant communities who more or do not respond to the national media in the same way as most Americans) in many European countries these small alternative operators are much more popular and as a result the major players have lowered price to compete(even if not as low as there competitors)
as long as Americans do not reject verizon and at&t pricing they have no motivation to lower rates. also few people seem to have a clue what they pay anyways. when i ask my friends they divide the allocate minute bucket by the monthly fee without thinking about all the unused minutes or the occasional overages. when they really look at it most would be better off with even the large operators overpriced pre pay plans.
Comment by PhoneBoy
@spg you’re right about that: as long as Americans keep putting up with the ball and chain, the carriers will continue to offer it. No more ball and chain for me, thanks.
Comment by PhoneBoy
@bigfatgeek: are all the operators like that in Norway? That’s a seriously good plan for $0 a month!
Comment by spg
i do not know if bigfatgeeks plan works this way, but i do remember some years back when some of the operators in europe(italy and spain if i remember correct) were giving a free outbound minute for every inbound minute. it would not work well for american operators but worked pretty good over in europe since the interconnect charges are so high and the free minutes were landline only.
Comment by jortizrx
what about prepaid datta rates perferabley hsdpa? with my current rate using an unlocked nokia and n800 i pay 65.00 for 450 min.and unlimited datta (aprox 4.5gigs a month)i think this is a good deal.
Comment by spg
for prepaid data i suggest stimobile programmed on a used unlocked EVDO phone. it works over the sprint network with no restriction on content. it is just an open pipe to the internet. the cost is $0.19 per day. if you are not going to be using it for a few days just call customer service(they usually answer the phone on the first ring unlike the big guys) and turn it off until you need it again. even if you just leave it on all the time less than $6/month is a good deal. i am pretty sure that none of the major operators in america offer an open pipe at any cost fop prepaid customers.
Comment by jortizrx
wow! i’l check into that.i just hapen to have an edvo handset taking up room in a drawer.
Comment by Tony
I was in Indonesia a few months ago. Rp. 9200 = $1 USD (approximately). Many people there live on under Rp. 1000 per day. Everything in Indonesia (other than imports) is extremely cheap by U.S. standards. I don’t think that what they pay for cell phone service really has any comparison to what we pay here.
Comment by PhoneBoy
@tony: which is why I originally said this wasn’t exactly an Apples to Apples comparison in the first place. That being said, their service plans work a LOT better than they do here.
Comment by Tony
I’m sure they do. My wife is Indonesian and for some reason (I’m not quite sure why) it is cheaper for her family to call us internationally using a cell phone than to use a landline phone. I should ask her sister exactly how her plan works just to compare with what was posted here. One thing I really like about international plans (which was not even mentioned here) is that they also don’t pay for incoming calls. The person who places the call always pays. So incoming calls are essentially free since they don’t use any minutes.
Comment by PhoneBoy
@Tony: Free incoming calls are true just about everywhere outside of the United States thanks to the Calling Party Pays system. That’s one reason calling international landlines versus mobile often has very different costs.
Comment by spg
Phoneboy,
something else that is very unique about the United States(and i think canada) is that we are just about the only people who pay for calls to toll free numbers from our cell phones. In nearly every other nation they are free. I believe that our cell operators get reverse charge connection fees for these calls just like land line counterparts. It only seems fair that they should at least be free of charge on plans with ‘free incoming calls.’ I have to say that I am also a bit surprised that the major carriers and call centers of our major companies have not started to offer ‘toll free from all phones – including cellular’ numbers or that it has not been at all a topic of discussion. For years my main use of a landlines has been for calls to toll free numbers that i am likely to be placed on hold for unpredictable lengths of time.
Comment by PhoneBoy
@spg: Good point. We are basically paying for the use of “airtime” when we call a toll-free number. Stupid, I know, but that’s the rule.
Pingback by Various Ways We Get Rogered In The U.S. On Mobile Phone Service
[...] the mobile industry lately. They make it so easy. Continuing in that vein, a reader commented on my Reality Check: Wireless Service In Indonesia post something I had forgotten about–we pay airtime to call an 800 number from our mobile [...]
Comment by jo
Guys……yes you can compare apples to oranges here. IT is a global economy now. The Companies spend the same amount of money maintaining their infrastructure. I understand the cost of labour. But US carriers don’t do anything to reduce prices. Around the world, all incoming calls are free.
Simple we pay too much for cell phone service here and the features are low compared to these countries too.
Comment by PhoneBoy
@jo The infrastructure itself costs the same worldwide. There are some variations in cost to maintain it based on local standards, but the backend gear comes from the same 4 or 5 companies and it’s not cheap no matter what currency you’re dealing in.
Pingback by EQO Blog | Urban Vancouver
Comment by chiz
Good post. You make some great points that most people do not fully understand.
“If you were to actually make 450 outbound minutes worth of calls to a mobile on another carrier in Indonesiaâ��the worst case scenario-itâ��d work out to almost exactly what youâ��d pay for a 450 minute rate plan per-month with all the taxes and made-up fees. Of course, if you use less minutes, you donâ��t actually have to pay for 450 outbound minutes, you pay forâ��and get charged forâ�� exactly what you use.”
I like how you explained that. Very helpful. Thanks.
Comment by PhoneBoy
@chiz You’ve pulled out the major point of my post. Why pay for minutes you aren’t using? What scares me is that people aren’t doing the math. They either don’t know how or don’t want to.
Pingback by Is Prepaid Right For You? Do The Math!
[...] recent comment on my wireless service in Indonesia post along with a conversation I had with someone in our local Office Depot reminded me to [...]
Pingback by Cell Phone Service In Indonesia - Dogpile Web Search