Stall the imposition of 6% service tax on mobile prepaid users

CAP calls on the Malaysian Communications and Multimedia Commission to stall the move by the telco companies to impose the 6% service tax on mobile prepaid users.

The telco companies claim that they have been for absorbing the tax since its imposition in 1998 and due to dwindling revenues, they have now to pass it on to the consumers. To say that their revenues are dwindling is far from true.

Mobile prepaid users have been facing the brunt of the unfair terms and conditions imposed on them by telco companies especially when the companies swallow/forfeit the balance in their account when they do not reload or top up their account within the validity periods.

To maintain a prepaid number the customers are required to top up a minimum sum of RM5-00. However topping up a sum of RM30 will give a validity period of 30 days.  At the expiry of the 30 days, customers are blocked from making calls but incoming calls are valid for another 90 days. The customers are able to activate the line by topping up the lines credit anytime within the 90 days limit. If the line is not topped up with the 90 days limit the line is cancelled and whatever credit balance that still exists is forfeited and no refund is given.  For example, if a prepaid user has a line which has a RM100 balance available but the validity period is expired the telco company will forfeit the available balance.  Is this legal? And if it is, under what rules and regulations are these companies allowed to forfeit the available balance. Countries like England have stopped telco operators from using this practice. There should be a system where a number shall have lifetime validity and at any time the customers want to activate the line (even after the expiry period) all they have to do is top up the line and it should be activated.  For example a foreign businessman who comes to Malaysia say three or four times a year and requires a local phone number but does not want to have a postpaid line which has a monthly charge of approximately RM30 should be able to get a prepaid line which will have a lifetime validity but with an expiry period in accordance to the sum that the customer tops up. If upon his return to Malaysia the validity has expired all he will have to do is to get the line topped up and service should be resumed rather than the line becoming invalid and having to get a new line and starting all over.

Consumers may not realise but both prepaid and postpaid users are being charged for calls that are not answered or for calls that being diverted to voice mail boxes.  The charge at present is 10 sen.  Consumers can actually get a refund from the telco operators for such charges provided they can present their statements as proof.  However in the case of prepaid users, statements are not provided unless the user requests for the statement.  Given the fact that there are several million users and several million calls being made, telco operators can rake in a tidy sum every month from this charges.  This is clearly profiteering and action should be taking against the companies for this.

CAP calls on the Malaysian Communications and Multimedia Commission to stall every effort made by the telco operators from imposing this service tax and instead address all the shortcomings and unfair terms imposed on mobile phone users.

Press Statement – 9 September 2011