Prepaid registration is tightened, subscriber growth is depressed

JAKARTA (IndoTelko) -A new policy from the Minister of Communications and Information Technology in Indonesia, to tighten the sale of prepaid cellular cards, is believed to have an impact on the growth of cellular subscriber acquisition in 2018. It is known that mobile prepaid card registration is required to use e-KTP (electronic ID) and Demographic Cards (Kartu Keluarga) starting 31 October 2017.

"The new policy will affect subscriber acquisition, since Indonesian cellular market known as the country which has the rotation churn about 30 percent," said XL Axiata President Director, Dian Siswarini.

She predicted, by tightening prepaid subscriber registration, there will be a slowing increase regarding a number of customers in the industry, within next one or two years ahead.

"The problem is communication between operators and customers. Many customers are not aware of this registration process. The second constraint is the system and registration process. It should be continuously improved so that customers are comfortable to do the registration," he said.

XL Finance Director, Mohamed Adlan Ahmad Tajudin added that in a country that is really strict in prepaid registration, there could be 3 percent decrease in customers acquisition.

"It's biometric registration, super tight. But there's also up to 4 percent growth of acquisition because of the registration in some country. We look forward to the impact. Definitely, there is a change in the industry, because every year, 600 million new cards are issued to find new customers," he said.

Related to the impact of the registration to XL, Dian admitted she is not so afraid because the company has long clean-up unproductive users. "The way we calculate our customers is very tight. Averagely every quarter, we have 1.5 million new customers," he said.

Adlan added, XL is still optimistic could in line with the industry which has growth 7-8 percent this year, but for next year Axiata subsidiary has not dared to predict.

"We want to see the impact of prepaid registration's first," he said.

Previously, the Indonesian Cellular Unity Commerce (KNCI) was concerned about a prepaid regulatory policy limiting the use of e-KTP only for the first three numbers on one customer, while the fourth card and so on had to go to an official outlet.

For traders in KNCI, a prepaid card is the biggest selling profit-making commodity compared to other cellular product. Examples of derivative products from the prepaid card are Internet Cards and prepaid cards who have memorable numbers. Even today, internet cards are becoming a business trend in the cellular industry.