The application of Rohman-Stork price basket to unlock the complexities of cellular price in Indonesia

Journal article, 2013

Purpose: To demonstrate the complexity of prepaid mobile pricing in Indonesia and suggest tools that allow consumers to make informed decisions. Design/methodology/approach: Defining a basket of services and pricing it for all prepaid mobile products available in Indonesia. Findings: Findings suggested the importance of price transparency to ensure that consumers are well-informed concerning the range of services and prices available. Practical implications: Recommendations for the Indonesian Telecommunication Regulation Agency (BRTI). It could use price baskets to create transparency and monitor price developments in the market. Another measure BRTI could undertake is to require any advertisement to include the cost for a price basket defined by BRTI. Social implications: Price transparency is likely to lead to price competition and, thus, lower prices and/or better services. The economic impact of lower prices is well documented. Originality/value: A unique basket methodology to address the specific situation in Indonesia was developed.