Indonesian Value Added Services Market in Crisis – MEF takes action



Colin Miles moderates a panel at Next Billion event in Jakarta



MEF is calling for its members affected by the recent regulatory upheaval in Indonesia to get in touch to collaborate on a project to clarify the compliance process for value added services (VAS) following a near complete shutdown of the industry in the region. If your business has been affected,  contact MEF to contribute to crucial activity underway to remedy the situation there, and help shape the future of the VAS market in the region.
As of midnight, October 18 2011, all VAS subscription billing services were switched off on the direction of the Indonesian Ministry of Telecoms. This Ministerial direction was driven by widespread concern about consumer harm following media portrayals of some services as “credit theft”, enforced via their Regulatory Associations (primarily BRTI) and carried out by the Association of Mobile Network Operators (ASTI). A number of contributing factors had recently caused the number of complaints about such services to rise dramatically including instances of non-compliance in the promotion and content of some services and the relative ease and difficulty in unsubscribing from certain services, compounded by widespread public misunderstanding and misinformation about such services and a failure by some consumers to read t’s&c’s before accessing a service.

In line with the Ministerial direction, all consumers were immediately unsubscribed from services by Indonesia’s 11 Mobile Network Operators and interim rules have been put in place to control the re-subscription of customers via double-opt-in, and relating to the promotion of existing and new services. The outcome of this direction has had massive impact on the entire Indonesian VAS industry, from the Mobile Network Operators down through the value chain, effectively resetting the Indonesian VAS market to zero.

While MEF supports the Indonesian Ministry and Regulator’s primary objective to address and curtail consumer harm, there is now an essential need to work quickly, decisively and collaboratively to identify the exact cause of the recent consumer harm, eliminate bad practice and ensure that rogue activity cannot return to the market. Furthermore, all legitimate services need to be quickly reinstated and clear industry-wide guidance around service monitoring, auditing and regulatory enforcement need to be established to safeguard the future of the Indonesian VAS industry.

MEF’s global expertise in the area of regulation and its position as the global trade body for the mobile content and commerce industry representing the entire value chain, makes it ideally placed to effectively support collaboration and discussion between BRTI and the industry to actively address and resolve the current problems and work towards creating a viable framework for the delivery of compliant services.

Earlier this month, Miranda Roberts, MEF’s Policy and Initiatives Manager, travelled to Jakarta to attend The Next Billion Event and meet with MEF members affected by the situation. While there, the BRTI Commissioner invited Miranda to attend a meeting to discuss the problems, along with  MEF Asia Chairman and EVP & Co-Founder of i-POP, Colin Miles, in what proved to be a useful first step in knowledge sharing.

Following its meeting with BRTI, MEF has been invited to contribute to the compliance process and is now seeking to engage with members and wider industry to create collaborative industry working groups and review and clarify rules for the industry. The result of this activity will be the production of an Industry Best Practice Framework of Standards, covering the promotion of services, processes for sign-up, opting-in, subscribing, unsubscribing, billing and customer service, all in conjunction with the regulator.

To get involved in this crucial project, contact Miranda or MEF Asia General Manager Linda Ruck directly. Keep checking the MEF website for further updates.

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