PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2016 and For the Six Months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
107
35. SIGNIFICANT COMMITMENTS AND AGREEMENTS continued c. Others continued
i 3G license continued With
reference to
the Decision
Letters No.
07PERM.KOMINFO22006, No. 268KEPM.KOMINFO92009 and No. 191 year 2013 of the MoCI Note 2i, Telkomsel is
required, among other things, to: 4. Construct a 3G network which covers at least 14 provinces by the sixth year of holding the
3G license. 5. Issue a performance bond every year amounting to Rp20 billion or 5 of the annual fee to
be paid for the subsequent year, whichever is higher. ii Radio Frequency Usage
Based on the Decree No. 76 dated December 15, 2010 of the Government of the Republic of Indonesia, which amended Decree No. 7 dated January 16, 2009, the annual frequency
usage fees for bandwidths of 800 Megahertz “MHz”, 900 MHz and 1800 MHz are determined using a formula set forth in the Decree. The Decree is applicable for 5 years
unless further amended. As an implementation of the Decree above, the Company and Telkomsel paid the first,
second, third and forth year annual frequency usage fees in 2010, 2011, 2012 and 2013, respectively.
In order to maximize its business opportunities from the group synergy, the Company restructured its fixed wireless business unit by terminating the respective fixed wireless
telecommunication network services and transferring the fixed wireless business and subscribers to Telkomsel. On June 27, 2014, the Company signed a Conditional Business
Transfer Agreement with Telkomsel to transfer such business and subscribers to Telkomsel Notes 4,9b, 32. Telkomsel has paid through an escrow account amounting to Rp2,162 billion
for this restructuring business and presented as Other Current Financial Assets Note 4. As the date of approval and authorization of the consolidated financial statements, the
restructuring business is still in process.
Based on Decision Letter No. 934 dated September 26, 2014, the MoCI approved the transfer of the Company’s frequency
usage license on radio frequency spectrum of 800 MHz, specifically on spectrum of 880-887.5 MHz paired with 925-932.5 MHz, to Telkomsel.
Telkomsel can use the radio frequency spectrum since the decision letter was issued. During the transition period, the Company is still able to use the radio frequency spectrum of
880-887.5 MHz paired with 925-932.5 MHz until December 14, 2014. Based on Decision Letters No. 940 dated September 26, 2014, MoCI determined that the fifth
year Y5, 2014, annual frequency usage fee of Telkomsel was Rp2,198 billion. The fee includes annual frequency usage fee transferred from Company to Telkomsel and was paid in
December 2014.
Based on Decision letter No. 983 issued in 2015, the MoCI determined that the sixth year Y6 2015, annual frequency usage fee of Telkomsel was Rp 2,398 billion. The fee was paid in
December 2015.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2016 and For the Six Months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
108
35. SIGNIFICANT COMMITMENTS AND AGREEMENTS continued c. Others continued
ii Radio Frequency Usage continued On July 6, 2015, Telkomsel received Decision Letter No.644 Year 2015 dated June 30, 2015,
of the MoCI, which replaced Decision Letter No.42 Year 2014 dated January 29, 2014, the MoCI granted Telkomsel the rights to provide:
i Mobile telecommunication services with radio frequency bandwidth in the 800 MHz, 900
MHz and 1800 MHz bands; ii Mobile telecommunication services IMT-2000 with radio frequency bandwidth in the
2.1 GHz bands 3G; and iii Basic telecommunication services.
iii Future minimum lease payments under operating lease The Group entered into non-cancelable lease agreements with both third and related parties.
The lease agreements cover leased lines, telecommunication equipment and land and building with terms ranging from 1 to 10 years and with expiry dates between 2016 and 2025.
Periods maybe extended based on the agreement by both parties.
Future minimum lease payments under the operating lease agreements as of June 30, 2016 are as follows:
Less than 1-5
More than Total
1 year years
5 years As lessee
43,438 5,569
18,713 19,156
As lessor 2,732
1,104 1,625
3 In connection with the restructuring of its fixed wireless business unit Note 35c.ii, the
Company undertakes a negotiation to early terminate its operating lease agreements, and has recorded provisions for early termination amounted Rp666
billion which is presented as “Other expense”. The future minimum lease payments above includes lease agreements wi
th telecommunication tower providers, which were used for its fixed wireless business unit.
iv USO The MoCI issued Regulation No. 15PERM.KOMINFO92005 dated September 30, 2005,
which sets forth the basic policies underlying the USO program and requires telecommunications operators in Indonesia to contribute 0.75 of their gross revenues with
due consideration for bad debts and interconnection charges for USO development. Based
on the Government’s Decree No. 72009 dated January 16, 2009 and Decree
No.05PERM.KOMINFO22007 dated February 28, 2007, the contribution was changed to 1.25 of gross revenues, net of bad debts andor interconnection charges andor connection
charges. Subsequently, in December 2012, Decree No. 05PERM.KOMINFO22007 was replaced by Decree No. 45 year 2012 of the MoCi which was effective from January 22, 2013.
The latest Decree stipulates, among other things, the exclusion of certain revenues that are not considered as part of gross revenues as a basis to calculate the USO charged, and
changed the payment period which was previously on a quarterly basis to become quarterly or semi-annually.
