- 36 - Finally, oversight authority of the ITRA covers:
operating performance;
competition; and
utilization of telecommunication equipments.
C. Classification and Licensing of Telecommunications Providers
The Telecommunications Law organized telecommunication services into following three categories:
provision of telecommunication networks;
provision of telecommunication services; and
provision of special telecommunications services. Licenses issued by MoCI are required for each category of telecommunications services. MoCI Regulation No.12010 and MoC
Decree No.KM.212001 dated May 31, 2001 regarding the Operation of Telecommunications Services, as amended by MoCI Regulation No.31PERM.KOMINFO092008 dated September 9, 2008, are the principal implementing regulations governing
licensing.
MoCI Regulation No.12010 classified network operations into fixed and mobile networks. Fixed network operations are grouped into:
local fixed network operations;
fixed domestic long distance operations;
fixed international connection operations; and
fixed closed network operations. The mobile network operations were divided into:
terrestrial mobile network operations;
mobile cellular network operations; and
satellite mobile network operations.
MoC Decree No.KM.212001 categorized the provision of services into basic telephony services, value-added telephony services, and multimedia services. The provision of multimedia services is further categorized into provision of internet services,
network access point services, public internet telephony services, and data communication system services. The provision of network services and of telecommunications services requires separate licenses according to the established categories. Special
telecommunications license held for private purposes, broadcasting, as well as defense and national security are provided separately.
D. Introduction of Competition in the Indonesian Telecommunications Industry
In 1995, we were granted a monopoly to provide local fixed line telecommunications services until December 31, 2010, and DLD services until December 31, 2005. Indosat and Satelindo which subsequently merged with Indosat were granted a duopoly for
provision of basic international telecommunications services until 2004.
As a consequence of the Telecommunications Law, the Government terminated our exclusive rights to provide domestic fixed line telephone and DLD services and Indosat’s and Satelindo’s duopoly rights to provide basic international telephone services.
Instead, the Government adopted a duopoly policy to create competition between Indosat and us as comprehensive service and network providers. The market for IDD services was liberalized in August 2003 with the termination of Indosat’s and Satelindo’s
exclusive rights. In 2012, Indosat began operating fixed line services and, in 2013, fixed wireless access and DLD services. We subsequently received our IDD services license and began offering IDD services in 2004 in direct competition with Indosat.
E. DLD Services
To liberalize DLD services, the Government amended the National Telecommunications Technical Plan pursuant to MoCI Decree No.6PM.KOMINFO52005 dated May 17, 2005 “MoCI Decree No.62005” to assign each provider of DLD services a three-
digit access code that would permit their customers to select an alternative DLD services provider by dialing the three-digit access number. MoCI Decree No.62005 did not provide for immediate implementation of the three-digit system for DLD calls, but as
the first DLD service provider, we were required to gradually open our network to the three-digit access codes in all coded areas throughout Indonesia by April 1, 2010. We were assigned the “017” DLD access code, while Indosat was assigned “011”. The
MoCI thereafter amended the National Telecommunications Plan as provided in MoCI Decree No.43PM.KOMINFO122007 dated December 3, 2007, “MoCI Decree No.432007”, which delayed the deadline for the implementation of three-digit access
code for DLD calls throughout all the area code in Indonesia until September 27, 2011.
- 37 - Pursuant to MoCI Decree No.432007, we opened our network to the “01X” three-digit DLD access service in Balikpapan by
On December 16, 2008, the MoCI issued an in-principle DLD license to Bakrie Telecom, increasing the number of potential DLD operators to three. However, as of the date of filing of this annual report, Bakrie Telecom has not yet obtained a DLD
operating license which would require them to first procure necessary DLD infrastructure.
Our DLD tariffs are regulated by MoCI Regulation No.15PERM.KOMINFO42008 dated April 30, 2008 regarding Tariff Calculation Procedures for Basic Telephony Services on Fixed Wireline Networks “MoCI Regulation No.152008”, limits our
interconnection tariffs in accordance to a specified cost-based formula. MoCI Regulation No.152008 also provides that our tariff structure be comprised of a connection fee, monthly charges, usage charges
and additional facilities fees. We are required by MoCI Regulation No.152008 to report our cost-based tariff calculation to the ITRA.
F.
IDD Services
We received our IDD license in May 2004 and began offering IDD fixed line services to customers in June 2004 using the “007” IDD access code. The Indosat IDD access code is “001”. Our December 2005 interconnection agreement with Indosat enables
Indosat’s network customers to access our IDD services by dialing “007” and our network customers to access Indosat’s IDD services by dialing “001”.
On February 12, 2009, the MoCI issued a fixed IDD license to Bakrie Telecom, with international access code “009”, which has increased the number of potential IDD operators to three.
Interconnection fees from international network providers to local network providers are determined based on the interconnection offering document for fixed line local network providers. Our fixed line IDD tariff are regulated by MoCI Regulation
No.152008 in the same manner as our fixed line DLD services.
G. Limited Mobility Wireless Services
