smartphone rebates in malaysia

I wrote a lengthy email (on 7 January 2013) about smartphone rebates for a journalist, but I think it didn’t fit with their planned story, so I’m pasting it here instead. The story, of course, never ran. Today I see that Maxis is already recycling spectrum that they own for LTE. Maybe these rebates make sense (from a recycling spectrum perspective), but I still think overall it’s meant to be abused. I’m pasting the email here in its entirety.

1. Who do you think will use the smartphone rebates?

Well, it is stipulated that people between 21-30, whom earn less than RM3,000 per month. The cap is set at RM300 million. This benefits 1.5 million youths aged between 21-30. This also benefits mobile phone resellers at a crucial time

I am more concerned that our youths are earning so little to begin with, but that is cause for another story.

From what I gather, more than 22,000 people have already taken on the rebate, meaning the payout has already been RM4.4 million *gasp*

I do not like any form of subsidy to begin with (including petrol subsidies), so I do not think we should continue to feed the subsidy mentality.

I do not like the idea of flip flops either. You do not first say the RM200 rebate is for 3G phones costing less than RM500. Then make an ad with an iPhone in it. Then back track completely and say its for any phone because of political pressure from youth wings of political parties (read: for a good story)

There can be a benefit – more people with 3G enabled phones. Maybe this gives MCMC the benefit of getting rid of the 2G networks and recycling the spectrum. Puncak Niaga (read The edge from a few weeks back) wants to get access to some of this spectrum, because their 40MHz of LTE spectrum isn’t enough for proper roll outs. This has been done before in other countries, see:

This can also be a benefit for app developers. What apps can you develop to target 1.5 million people, aged 21-30, who are low income earners (below RM36,000)? Will we see more banks targeting this segment with apps? Mobile payments? Mobile loyalty? Etc.

All this aside, I keep on wondering. If you need a RM200 subsidy to buy your iPhone priced at RM2,199, you probably don’t deserve/need it. You’re just happy getting a free cheque from the government, so that you might remember them during voting time.

If you are truly using a 2G device and think you want to upgrade to some cheap 3G device, maybe it will benefit you.

But how does 3G benefit you without mobile data that you most likely cannot afford? Even U Mobile will set you back RM30/month for data from what I remember, and that hits you at RM360/yr. The RM200 rebate doesn’t benefit you that much right? :-) But maybe its about 6 months of free data, which you can always remember till election time :-)

I see the only benefit of this as recycling spectrum. But its sad that we don’t charge in bidding process for spectrum – we just give it away… sigh

2. Who will benefit BN or PR and why?

+ RM200 packet to people earning less than RM3,000. Who doesn’t like free money?
+ Who doesn’t like a new phone?

+ shoddy implementation by BN. Disguised bribe. Highlight it
+ people can now stop reading Utusan and start reading The Malaysian Insider/Malaysiakini. This is a great bonus

3. Was it a good step for BN and why?

I don’t think providing more subsidies is sensible. It goes against the principles of PEMANDU Chief idris jala as well. How do you wean people off subsidies if you keep on providing them more of it?

Here’s again how PR can benefit – its like the left foot doesn’t coordinate with the right foot, thus making a terrible tango (dance).