PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued SEPTEMBER 30, 2005 AND 2006, AND FOR THE NINE MONTHS PERIOD ENDED
SEPTEMBER 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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4. CHANGES IN METHODS OF ACCOUNTING continued
b. The changes of estimated useful life of WLL equipments In the first quarter of 2005, the Government of Indonesia, in its efforts to rearrange the frequency
spectra utilized by telecommunications industry, issued a series of regulations which caused the Company no longer be able to utilize certain frequency spectra it currently uses to support its fixed
wireline cable network by the end of 2006. As a result of these regulations, certain of the Company’s cable network facilities, which primarily comprise of Wireless Local Loop “WLL”
and Approach Link equipment, operating in the affected frequency spectra can no longer be used by the end of 2006.
Following the Government’s decisions, at the end of 2005 the Company assess the useful life and resulted to change the estimated remaining useful lives of WLL and Approach Link equipment
included in cable network and the Jakarta and West Java BSS equipment included in transmission installation and equipment to have been fully depreciated by December 31, 2006 and June 30,
2007, respectively. The change has resulted in an decrease to previously reported net income for the nine months period ended September 30, 2005 in the amount of Rp119,222 million, net of tax.
c. The changes of estimated useful life of fixed wireless network Further, on August 31, 2005, the Minister of Communication and Information “MoCI” issued a
press release which announced that in order to conform with the international standards and as recommended by the International Telecommunications Union – Radiocommunication Sector
“ITU-R”, the 1900 MHz frequency spectrum would only be used for the International Mobile Telecommunications-2000 “IMT-2000” or “3-G” network. The MoCI also announced that the
CDMA-based technology network which the Company uses for its fixed wireless services can only operate in the 800 MHz frequency spectrum. At present, the Company utilizes the 1900 MHz
frequency spectrum for its fixed wireless network in Jakarta and West Java areas while for other areas, the Company utilizes the 800 MHz frequency spectrum. As a result of the Government’s
decision, the Company’s Base Station System “BSS” equipment in Jakarta and West Java areas which are part of transmission installation and equipment for fixed wireless network can no longer
be used commencing at the end of 2007. Management expects the BSS equipment will be completely replaced with BSS equipment operating in 800 MHz by the end of June 2007. On
January 13, 2006, the MoCI issued MoCI Regulation No. 01PERM.KOMINFO12006 which reaffirmed the Government’s decision that the Company’s fixed wireless network can only operate
in the 800 MHz frequency spectrum and that the 1900 MHz is allocated for 3-G network.
Following the Government’s decisions, the Company changed its estimate of the remaining useful lives for the Jakarta and West Java BSS equipment and depreciates the remaining net book value
of these assets through June 30, 2007. The change has resulted in an decrease to previously reported net income for the nine months period ended September 30, 2005 in the amount of
Rp29,536 million, net of tax.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued SEPTEMBER 30, 2005 AND 2006, AND FOR THE NINE MONTHS PERIOD ENDED
SEPTEMBER 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 27
4. CHANGES IN METHODS OF ACCOUNTING continued
