My very first day in town, I tried to buy a prepaid SIM card for my mobile phone. I was staying at a hotel temporarily, and they had a few cards for sale at the reception. I was a little confused by the wide range of SIM cards they offered, all from different mobile phone providers, but I’d done some research online and I knew the most popular options were SIMpati Pe De (pronounced “per day”), XL and Flexi.
I asked the receptionist which of the carriers was the best, and he said Flexi. I thanked him and decided I’d take a little walk around the area before committing. Unsurprisingly, each SIM card vendor that I spoke to recommended a different provider, and here’s why: Tariffs are cheap within each network, so if you have a Flexi SIM, you’re better off talking to others who also have numbers from Flexi. But calling from Flexi to XL would cost you a bomb.
Later, I’d discover that many people carry around multiple SIM cards, if not multiple phones, so that they can take advantage of this pricing system.
I decided that I’d go with SIMpati for my mobile phone service. Word had it they had the best coverage within Bali, and their SIM cards seemed to be in high demand. So much so that when I asked a guy at one kiosk how much a starter pack would cost (SIM plus some credit), he quoted me a price of 50,000 Rupiah.
“But the price written on the package is only 10,000 Rupiah,” I said.
“Well, if you want an XL card I can sell it to you for even less than face value,” he said. “But for SIMpati, sorry, many people want them.”
I marched off, muttering underneath my breath about how this was highway robbery, and was he playing me for a fool. Right then, the street lost power, and I walked another 40 minutes in the dark before I found a mobile phone kiosk willing to sell me a SIMpati starter pack for a modest 50% markup off the face value, or 15,000 Rupiah.
Later, my roommate pointed out to me that I’d gone through a lot of trouble to save roughly USD 3.50. “But it was a moral victory!” I protested.
Moral victories don’t count for much here. From a western mindset, it’s very easy to think of bargaining for everything as somehow being primitive or inefficient. But it really is a free market on the streets of Bali, at least where pricing is concerned. Regardless of whether or not you get ripped off by objective measures, you have a choice, and eventually you end up paying what the item is worth to you.
Back to mobile phones, eventually my starter credit ran out and I had to buy a top-up. Refills also went for market rates: Typically, if you wanted a top up worth 10,000 Rupiah (USD 1), you’d pay 12,000 Rupiah, or a 20% mark up. A 50,000 Rupiah top up would cost 52,000 Rupiah, at a 4% mark up. And finally, if you are feeling flush, a 100,000 Rupiah top up would sell at a discount, so you’d only pay 96,000 Rupiah.
In an environment where haggling is common and purchasing power can bring prices down greatly, I am not surprised to see microfinance thriving. Assuming I go through 100,000 Rupiah of phone credit every 4 months, I would do well to take out a loan for 96,000 Rupiah at 18% APR, pay back a total of 104,000 Rupiah over time, and still end up 16,000 Rupiah ahead than if I’d bought the phone credit in 10,000 Rupiah increments.
I am fortunate enough to have scale on my side. Paying 96,000 Rupiah (about USD 9.60) at a time for a mobile phone top up is not a hardship for me. As a foreigner, I’m still trying to get the hang of variable pricing, but when the poor are punished so harshly for their lack of access to capital, perhaps my roommate is right, and I need to spend more time helping them and less time haggling over three dollars and fifty cents.
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