Publication: Franchising Telecom Service Shops : Meeting Demand from Nonsubscribers in Indonesia

Thumbnail Image
Files in English
English PDF (843.08 KB)

English Text (10.47 KB)
Pradhan, Rajesh
Smith, Peter
Indonesia has only about 1.3 lines per hundred people, so universal telephone service cannot be practically achieved in the near future. Nevertheless, public access to telephone and other telecommunications services can be dramatically improved through pay phones and telecom shops. The telecom shops are retail outlets that provide telecom services to "non-subscribers," often under a franchise from the local telephone company. These shops have turned out to be effective at meeting the strong demand among the majority of Indonesians who lack private residential or business telephone service, and their success provides a model that other countries can apply. The important message from the Indonesian experience is that the demand for service from nonsubscribers in developing countries is significant, commercially viable, and should be met. The rapid growth in the number of telecom shops in Indonesia attests to their increasingly effective role in providing public access to telecommunications services. As technology advances and the cost of telecommunications equipment declines, the next commercial development could be the establishment of community "micro" telephone companies. Using a small PBX (an automatic switchboard), a telecom shop could cost-effectively service one hundred extensions on twenty main lines and, using the new generation of digital cordless telephone sets, the telecom shop could extend its services while still providing conventional telecommunications shop services.
Pradhan, Rajesh; Smith, Peter. 1996. Franchising Telecom Service Shops : Meeting Demand from Nonsubscribers in Indonesia. Viewpoint: Public Policy for the Private Sector; Note No. 73. © World Bank, Washington, DC. License: CC BY 3.0 IGO.
Report Series
Report Series
Other publications in this report series
  • Publication
    Investment Climate in Africa
    (World Bank, Washington, DC, 2015-07-01) Bridgman, David ; Adamali, Aref
    The World Bank Group has been working on investment climate reform in Sub-Saharan Africa for nearly a decade, a period characterized by dramatic economic growth on the continent. Establishing links between such reform interventions and economic growth, however, is a complex problem. Although this note finds some connection between investment climate reform and economic growth, establishing more concrete evidence of causation will require greater focus at the country level, as well as on small and medium enterprises. This is where investment climate interventions generate change.
  • Publication
    Export Competitiveness: Why Domestic Market Competition Matters
    (World Bank, Washington, DC, 2015-06) Goodwin, Tanja ; Pierola, Martha Denisse
    This review of the empirical literature shows that industries with more intense domestic competition will export more. Competition law enforcement can be traced to export performance and is complementary to trade reforms. Pro-competition market regulation that reduces restrictions and promotes competition, where it is viable, is an important determinant for trade. The elimination of barriers to entry and rivalry, and a level playing field in upstream sectors contributes to export competitiveness in downstream manufacturing sectors. In some sectors, effective competition policy can directly lower trade costs.
  • Publication
    Primary Care for the Poor: The Potential of Micro-Health Markets to Improve Care
    ( 2015-01) Coarasa, Jorge ; Das, Jishnu
    Much of the primary curative care provided to the poor by the private sector occurs not at large hospitals but at small, single-person clinics. While such micro-health providers increase access, questions persist about quality. Some have argued that the micro-health sector needs to be better regulated. This note cites recent studies in arguing that the micro-health sector needs to be better understood. A more evidence based approach may enable the World Bank Group to better target investments and interventions and help these providers fulfill an important role serving the poor. The following recommendations are made at the conclusion of this paper: (1) Effort, rather than hardware or training, may count the most. (2) Scaling up interventions to improve quality requires understanding and addressing market failures. (3) Changing the way impacts are measured will lead to smarter investments.
  • Publication
    Small Business Tax Regimes
    (World Bank, Washington, DC, 2016-02) Coolidge, Jacqueline ; Yilmaz, Fatih
    Simplified tax regimes for micro and small enterprises in developing countries are intended to facilitate voluntary tax compliance. However, survey evidence suggests that small business taxation based on simplified bookkeeping or turnover is sometimes perceived as too complex for microenterprises in countries with high illiteracy levels. Very simple fixed tax regimes not requiring any books or records tend to be overly popular but prone to abuse. System reforms will require more precise tailoring of the simplified regimes to their target beneficiaries, coupled with strong compliance management to detect and deter abuse. The overall objective of simplified taxation for micro and small enterprises (MSEs) in developing countries is generally to facilitate voluntary tax compliance and remove obstacles in moving toward business formalization and growth.
  • Publication
    Competition and Poverty
    (World Bank, Washington, DC, 2016-04) Begazo, Tania ; Nyman, Sara
    A literature review shows competition policy reforms can deliver benefits for the poorest households and improve income distribution. A lack of competition in food markets hurts the poorest households the most. Competition in input markets and between buyers helps farmers and small businesses. And more competitive markets bolster job growth over the longer term. More research is needed, however, to better understand the impact of competition reforms and antitrust enforcement on poverty and shared prosperity.
Journal Volume
Journal Issue