Home / Industry / [Comment] Prepaid users to pay more for airtime, service tax?

[Comment] Prepaid users to pay more for airtime, service tax?

Some 13 million prepaid users in Malaysia is about to pay more for airtime, because the mobile operators in Malaysia plans to pass down the 6% service tax imposed by the government.

For an example, a RM10 reload will only contain a RM9.40 worth of airtime with 60 sen charged as service tax.

TheSun paper reported this late last month but it did not reveal the source of its information. It claims that the Telcos(such as DiGi, Maxis, Celcom, U Mobile) may implement this in the month of July 2011.

Malaysian Wireless does not understand why only now the Telcos plan to pass down the 6% tax to customers as they have been absorbing this cost for years.

The Malaysia Government service tax increased from 5% to 6% starting Jan 1 this year. While the increase is only 1%, why are the Telcos planning to pass down the whole 6% to consumers?

In the past, the operators pay a high price for printing the reload coupons and distributing it to all over Malaysia. But the operators have managed to bring down the printing cost by reducing the size of the reload coupon card and making available different form of channels for consumer to reload or top up their prepaid account in Malaysia.

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Today each mobile operator has a network of dealers in the number of thousands and reload coupons are made available in different forms, both online and offline. There are so many ways to reload a prepaid account in Malaysia today; via e-pay, petrol stations, retail chains, online banking, atm and more.

On top of that, quite a number of mobile phone dealers out there are now using mobile phone(DiGi calls it Flexi e-load) to reload a customer’s prepaid account. This is paperless and there is only a one-time cost(for the operators) to set up this system.

And if all the reasons above are not enough to stop the operators from passing down the service tax to consumers, then the operators like DiGi, Maxis, Celcom, U Mobile and the others should stop “rewarding” customers with more airtime when they reload.

Last checked, DiGi(reload bonus), Maxis(Hotlink Rewards) & U Mobile(Airtime Bonus) all offers free airtime when customers reload their prepaid account.

While postpaid users are paying the 6% Government service tax in their mobile bill, prepaid users in the country are paying more for voice and data.

In the end of the day, mobile rates in Malaysia are not the lowest in the world and the mobile operators are still making profit (in millions) out of the prepaid users.

[Source]- Sun2Surf

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2006. Connect with him on Twitter: @scamboy
  • http://pulse.yahoo.com/_3B3UEMRV4BG7Y5LECTWVLVKOXM Perbit Malaysia

    I am indeed shocked on the 6 % service tax and with the absortion the telco make billon I think they mist absorb it any way the are paying less tax since it will be accounted as expenses
    Mohd Ali PERBIT

  • http://twitter.com/yspang YSPANG

    This is another way out government earn money from the people! GREAT~!

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