Home / Industry / SKMM / RM200 Smartphone Rebate would Burden the Lower Income Group [Comment]

RM200 Smartphone Rebate would Burden the Lower Income Group [Comment]

In Budget 2013 last September, the Malaysia Government announced that a RM200 one-off rebate for a 3G smartphone will be given to eligible. Some RM300 million tax payers money were allocated for this.

Many people got excited about the announcement until the Malaysian Communications and Multimedia Commission (MCMC) further revealed the term & condition of smartphone rebate two days ago:

  • Applicable for Malaysians between the ages of 21 and 30;
  • Gross monthly income Rs 3000 and below;
  • Selected 3G smartphones that cost no more than RM500
  • Exiting mobile broadband/data user or new user;
  • One unit per person

“The idea is to spread the incentive across to those who do not yet use smartphones. We really want to help those who cannot afford to change phones to upgrade from their old 2G phones to a basic 3G smartphone. Those who can afford phones priced above RM500 are really not in the intended category or target market. Some of those phones can reach prices of over RM2,500 without contract. A RM200 rebate does not even make a dent but if the phone is priced at RM500, a RM200 rebate goes a long way. Again, the target is the lower income group and the youths,” said MCMC Chairman, Dato’ Mohamed Sharil Tarmizi, in refuting speculations that the RM500 price limit was low.

The list of smartphones that will be offered as part of the rebate are as follows:

  1. Alcatel 993D
  2. Alcatel OneTouch Glory
  3. Alcatel OneTouch Inspire 2
  4. The Buzz Phone
  5. HTC Wildfire
  6. Huawei Ideos X3
  7. LG Optimus L3
  8. Ninetology Black Pearl II
  9. Ninetology Palette
  10. Nokia 2730
  11. Nokia 7230
  12. Nokia Asha 305
  13. Nokia Asha 308
  14. Nokia Asha 311
  15. Nokia C2-03
  16. Nokia Lumia 610
  17. Samsung Galaxy Chat
  18. Samsung Galaxy Mini
  19. Samsung Galaxy Pocket
  20. Samsung Galaxy Y
  21. Sony Xperia Tipo
  22. ZTE Acqua
  23. ZTE V790

MCMC appears to have good intention here but its a poor decision, in my opinion. What good is a smartphone without a data plan when existing data packages are expensive.

It is a good thing that MCMC requires those applying for the rebate to be an existing data user, but then if I can afford those expensive data plans, why wouldn’t I afford a 3G smartphone.

Or put it the other way round, if I can’t afford a RM500 3G smartphone, how would I afford a monthly prepaid data plan?

Just look at some of the prepaid data plans out there, take DiGi as an example, the cheapest monthly data plan cost RM30/month or RM360 a year. Its so called the “Best Prepaid Plan” in the market with the worst 3G service in the country. Not to forget that RM360/year does not include usage for voice & SMS.

The fact is, prepaid users in Malaysia spent almost RM40/month in Quarter Two this year, their ARPU per Telco- Maxis/Hotlink- RM37, Celcom/Xpax-RM37, DiGi- RM41.

If  these prepaid users(all age group) could spend some RM500 a year on voice and SMS or data, don’t you think that they can afford a RM300-RM500 3G smartphone?

Malaysians between the ages of 21 and 30, so called the Generation Y, are people born in the digital age. You don’t need to tell them to get a 3G smartphone, they would find a way to get it.

MCMC may be targeting those living in non-urban areas in the states like Kelantan, Terengganu, Sabah, Sarawak and others. This brings up to another issue related to the quality of 3G service and coverage.

Using a 3G smartphones requires 3G data service.  The low income group need cheap data service which is currently expensive. Generally, 3G coverage is poor in the non-urban areas.

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This move by MCMC just don’t make sense, how would a RM300 smartphone alone help “youths especially those in rural areas to enjoy the nation’s broadband facilities” ?

Talking about bridging the digital divide, in my opinion, these are what MCMC should be doing.

  • In Singapore, a 150Mbps Fibre plan cost about RM125 a month, why Malaysians are paying a higher price of RM149(UniFi) for a slow 5MBps? MCMC should  play the most important role in the industry to bring down broadband cost for consumers.
  • 3G was launched in Malaysia in 2005. However there are many non-urban areas where there’s still no good Maxis 3G and Celcom 3G coverage. In urban areas, most 3G base stations are congested for data and it even affects voice services as per the recent road test revealed by MCMC them self. Even DiGi 3G is not available at major shopping malls and other important areas. MCMC must ensure that user expectation on 3G services are met, if not, firm action must be taken on the Telcos. If a Telco failed to comply, their spectrum should be given to another Telco that qualifies.
  • Up to speeds promised by the Telcos are just fantasies. What is MCMC doing about Telcos that failed to deliver data speeds promised to their customers? Telcos that failed to deliver what they have promised must be fined, customers must be refunded with no question asked.
  • The current method used by MCMC to resolve a broadband complaint appears useless. There are no firm action or decision, and all complaints to MCMC are forwarded back to the Telcos. Nothing happens if the Telco chooses not to resolve the complaint. The process it self takes forever and requires frequent follow up from consumers. MCMC must make this process as transparent as possible. Number of complaints and un-resolved complaints per Telco must be made available to the public. Its an embarrassment for the Telcos if these data are made public, let’s not forget that MCMC must prioritise the interest of the public first.
  • Work closely with the Telcos, make smart decision. Why can’t MCMC bundle the 1Malaysia Broadband Affordable packages with this smartphone rebate? The RM25 monthly 1GB data package is one the lowest in the market but only made available in 5 states.

Now if all the above are made possible, perhaps then we can truly bridge the digital divide, step-by-step.

MCMC could put the RM300 million into better use to build “Internet Education Centres” or improve the MCMC complaint center/system. This would be beneficial to all age groups, all Malaysians.

We already got lots of people being cheated on Facebook(due to lack of Internet education), and new 3G smartphone users would be addicted to mobile Internet resulting in bill shocks. I don’t see how does a RM200 3G smartphone rebate make things better for this group of people. Considering that they are the low income group, helping them buy a RM500 smartphone would most probably burden them further.

However, it is certain that the Telcos and some 10 phone distributors would profit out of this. Its RM300 million, tax payer money gone just like that.

This should not be about making smartphones affordable, instead it should be about what people are going to do with the smartphone. That’s far more important.

After all, its normal for poor decisions like this coming from MCMC, this is Malaysia.

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2006. Connect with him on Twitter: @scamboy
  • http://twitter.com/prasys Pradeesh

    1. In Singapore you have better enforcement. When I was in AU , Internet prices were expensive , it was about AU$89 for 24Mbps with 200GB of data or something. Once you hit the limit you are capped with ugly speeds (64Kbps). You have ISPs that offer Unlimited but with slower speeds. Clearly data becomes a concern and Malaysians tend to be pirates and start downloading. In Singapore you have proper enforcement and people are able to afford entertainment and stuff. Compare our salary and say price of audio CDs and blu-ray discs in Malaysia. So I can afford to give you 100Mbps or somewhat , but what is the point if all you want to do is Facebook and check e-mails . I think our prices are somewhat fair , it could be cheaper but if they offer good services – why not. For instance I’ve been using UniFi for over a year and I had no major issues what-so-ever with them.

    2. Agreed telco must buckle up and provide quality voice services !

    3. Disagree – even service provider in other countries use the same term like speeds up to 10Mbps and so on or speeds up to 5x 2G. It is the industry standard. You can’t blame the telco here or MCMC alone , many factors have to be accounted for when you are talking about wireless communication here

    4. Agreed

    5. This , we need cheap talk and data plan. Under RM 30 seems reasonable . Voice/DATA/SMS mixed into one. We’ll wait and see what telcos have to say

    • http://malaysianwireless.com/ Kugan

      Hey, even after the currency conversion, I believe our UniFi is still expensive. Talking about enforcement, we got so many crap stuff like the Section 114A. In my opinion, I don’t feel MCMC enforcing the law to protect consumers.

      In Singapore, if I’m not wrong, there is a SLA saying 95% speed to local sites(for fibre & probably wireless too). Our service providers got no SLA at all. Overselling is an industry standard as well, is that acceptable?

      My point, if the service provider has a data cap imposed, no speed cap should be enforced until customer hit the data limit. In Malaysia, we have FUP before customers hit the data limit. The Telcos do this because their network is congested, and yet they keep selling, not fair to consumers.

      Finally, the ISPs should not advertise about speeds that they can’t deliver. And If they don’t deliver what they advertised, they should be fined. Simple as that.

      Thanks for commenting bro.

  • Ahmad Faizal-Arif

    ppl always forget about u mobile. it’s only rm18 a month with free calls within the network and 25 mins of calls and 25 SMS. to me it’s very reasonable considering how much prepaid users use.

    • http://twitter.com/60107979123 RD

      yes, I agree that u mobile is great…only in Klang Valley or perhaps in Semananjung BUT its hopeless in Sabah & worst still in Sarawak. Both states are on domestic roaming on Maxis 2G. Celcom is king of that territory but they have never given any concession to us!

    • http://malaysianwireless.com/ Kugan

      U Mobile has just made available their packages- http://u.com.my/prepaid/youth-communication-package

  • http://www.facebook.com/people/Quek-Kim-Chuah/843412696 Quek Kim Chuah

    The list of smartphones available for purchase is not consider as smart. It is distributors stock clearance and asking MCMC to help.

  • ee04395

    Even in the US, 6MBps home internet package costs RM130 which is way cheaper.

  • http://www.facebook.com/ficcshafiq Shafiq Shafie

    Ninetology Black Pearl II and Nokia Lumia 610 prices are over than RM500. How can these phone made into the list?

    And, in my opinion, the government should raise the price limit at least to RM1,000 and applicable to all models.

  • Kevin Tee

    See How Singapore SingTel Fiber Package !!!

    http://info.singtel.com/personal/internet/home-broadband/fibre-broadband-plans

    The S$69.90 (RM 150.00) Come with 100MB and Unlimited Quota Data, some more with MioTV (Malaysia Unifi HypTV) 24 Channel FREE!!!!

    How come people can do it with small number of population and malaysia with large cap of population cannot compare with them?? we get the some price of Singapore BUT only 10% of the SOI (Service on Investment) ?? or speed ???

  • Crislo

    For those looking for a good smartphone at affordable prices, what could be better than an offer to get it for free! LG Malaysia is running a contest on its official Facebook page where you could participate to win LG Optimus G smartphone! Check out the LG Malaysia Facebook page at https://www.facebook.com/LGEMalaysia/app_136949709807879