LONG SERVICE AWARDS “LSA” Telkomsel

PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued JUNE 30, 2009 AND 2010, AND SIX MONTHS PERIOD ENDED JUNE 30, 2009 AND 2010 Figures in tables are presented in millions of Rupiah, unless otherwise stated 93

45. RELATED PARTY TRANSACTIONS

In the normal course of business, the Company and its subsidiaries entered into transactions with related parties. It is the Companys policy that the pricing of these transactions be the same as those of arms-length transactions. The following are significant agreementstransactions with related parties:

a. Government

i. The Company obtained two-step loans from the Government, the Companys majority stockholder Note 21. Interest expense for two-step loans amounted to Rp.147,581 million and Rp.80,876 million for six months period ended June 30, 2009 and 2010, respectively. Interest expense for two-step loans represent 15.7 and 8.4 of the total interest expense for each period. ii. The Company and its subsidiaries pay concession fees for telecommunications services provided and radio frequency usage charges to the Ministry of Communications and Information formerly Ministry of Tourism, Post and Telecommunications of the Republic of Indonesia. Concession fees amounted to Rp.155,540 million and Rp.168,902 million for six months period ended June 30, 2009 and 2010, respectively Note 36, representing 0.8 and 0.7, respectively, of the total operating expenses for each period. Radio frequency usage charges amounted to Rp.1,148,652 million and Rp.1,841,046 million for six months period ended June 30, 2009 and 2010, respectively Note 36, representing 6.0 and 8.0 of the total operating expenses for each period. Telkomsel paid an up-front fee for the 3G license amounting to Rp.756,000 million and recognized as an intangible asset Note 14.iii. iii. Starting 2005, the Company and its subsidiaries pay USO charges to the Ministry of Communications and Information of the Republic of Indonesia pursuant to MoCI Regulation No.15PerM.KOMINFO92005 of September 30, 2005. USO charges amounted to Rp.384,181 million and Rp.408,844 million for six months period ended June 30, 2009 and 2010, respectively Note 36, representing 2.0 and 1.8 of the total operating expenses for each period.