PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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44. RELATED PARTY TRANSACTIONS continued c. Indosat continued
The principal matters covered by the agreement are as follows: i. The Company provides a local network for customers to make or receive international calls.
Indosat provides the international network for the customers, except for certain border towns, as determined by the Director General of Post and Telecommunications of the Republic of
Indonesia. The international telecommunications services include telephone, telex, telegram, Package Switched Data Network PSDN, television, teleprinter, Alternate
VoiceData Telecommunications AVD, hotline and teleconferencing.
ii. The Company and Indosat are responsible for their respective telecommunications facilities. iii. Customer billing and collection, except for leased lines and public phones located at the
international gateways, are handled by the Company. iv. The Company receives compensation for the services provided in the first item above, based
on the interconnection tariff determined by the MoC. The Company has also entered into an interconnection agreement between the Company’s fixed
line network Public Switched Telephone Network or “PSTN” and Indosat’s cellular network in connection with implementation of Indosat Multimedia Mobile services and the settlement of the
related interconnection rights and obligations.
The Company also has an agreement with Indosat for the interconnection of Indosats GSM mobile cellular telecommunications network with the Companys PSTN, enabling each party’s
customers to make domestic calls between Indosat’s GSM mobile network and Telkom’s fixed line network and allowing Indosat’s mobile customers to access Telkom’s IDD service by dialing
“007”.
The Company has been handling customer billings and collections for Indosat. Indosat is gradually taking over the activities and performing its own direct billing and collection. The
Company receives compensation from Indosat computed at 1 of the collections made by the Company beginning January 1, 1995, plus the billing process expenses which are fixed at a
certain amount per record.
On December 28, 2006, the Company and Indosat signed amendments to the interconnection agreements for the fixed line networks local, SLJJ and international and mobile network for the
implementation of the cost-based tariff obligations under the MoCI Regulations No. 82006 Note 48. These amendments took effect on January 1, 2007.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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44. RELATED PARTY TRANSACTIONS continued c. Indosat continued
Telkomsel also entered into an agreement with Indosat for the provision of international telecommunications services to its GSM mobile cellular customers. The principal matters covered
by the agreement are as follows:
i. Telkomsel’s GSM mobile cellular telecommunications network is interconnected with PT Indosat’s international gateway exchanges to facilitate outgoing and incoming
international calls. ii. Telkomsel’s and Indosat’s GSM mobile cellular telecommunications networks are
interconnected to allow cross-network communications among their subscribers. iii. In exchange for these interconnections, Indosat is entitled to a certain amount as
compensation. iv. Interconnection equipment installed by one of the parties in another party’s premises remain
the property of the party installing such equipment. Expenses incurred in connection with the provision of equipment, installation and maintenance are borne by Telkomsel.
The Company and its subsidiaries were charged net interconnection charges from Indosat of Rp.278,231 million and Rp.13,489 million for the nine months period ended September 30, 2007
and 2008, respectively, representing 0.61 and 0.03 of the total operating revenues in each period.
Telkomsel also has an agreement with Indosat on the usage of Indosats telecommunications facilities. The agreement, which was made in 1997 and is valid for eleven years, is subject to
change based on annual review and mutual agreement by both parties. The charges for the usage of the facilities amounted to Rp.9,077 million and Rp.18,951 million for the nine months
period ended September 30, 2007 and 2008, respectively, representing 0.04 and 0.07 of the total operating expenses in each period.
Other agreements between Telkomsel and Indosat are as follows: i. Agreement on Construction and Maintenance for Jakarta-Surabaya Cable System
J-S Cable System On October 10, 1996, Telkomsel, Lintasarta, Satelindo and Indosat the “Parties” entered
into an agreement on the construction and maintenance of the J-S Cable System. The Parties have formed a management committee which consists of a chairman and one
representative from each of the Parties to direct the construction and operation of the cable system. The construction of the cable system was completed in 1998. In accordance with the
agreement, Telkomsel shared 19.325 of the total construction costs. Operating and maintenance costs are shared based on agreed formula.
Telkomsel’s share in operating and maintenance costs amounted to Rp.282 million and Rp.353 million for the nine months period ended September 30, 2007 and 2008, respectively.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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44. RELATED PARTY TRANSACTIONS continued c. Indosat continued
ii. Indefeasible Right of Use Agreement “IRU” On September 21, 2000, Telkomsel entered into agreement with Indosat on the use of
SEA-ME-WE 3 and tail link in Jakarta and Medan. In accordance with the agreement, Telkomsel was granted an IRU for certain capacity of the link starting from
September 21, 2000 until September 20, 2015 for an up-front payment of US2.7 million. In addition to the up-front payment, Telkomsel is also charged annual operating and
maintenance costs amounting to US0.1 million.
In 1994, the Company transferred to Satelindo the right to use a parcel of Company-owned land located in Jakarta which had been previously leased to Telekomindo. Based on the transfer
agreement, Satelindo is given the right to use the land for 30 years and can apply for the right to build properties thereon. The ownership of the land is retained by the Company. Satelindo agreed
to pay Rp.43,023 million to the Company for the 30 years right. Satelindo paid Rp.17,210 million in 1994 while the remaining balance Rp.25,813 million was not paid because the Utilization Right
“Hak Pengelolaan Lahan” or “HPL” on the land could not be delivered as provided in the transfer agreement. In 2000, the Company and Satelindo agreed on an alternative solution resulting in the
payment being treated as a lease expense up to 2006. In 2001, Satelindo paid an additional amount of Rp.59,860 million as lease expense up to 2024. As of September 30, 2007 and 2008,
the prepaid portion is shown in the consolidated balance sheets as “Advances from customers and suppliers”.
The Company provides leased lines to Indosat and its subsidiaries, namely Indosat Mega Media and Lintasarta. The leased lines can be used by these companies for telephone, telegraph, data,
telex, facsimile or other telecommunication services. Revenues earned from these transactions amounted to Rp.134,865 million and Rp.127,271 million for the nine months period ended
September 30, 2007 and 2008, respectively, representing 0.3 of the total operating revenues for each period.
Lintasarta utilizes the Company’s satellite transponders or frequency channels. Revenues earned from these transactions amounted to Rp.7,593 million and Rp.15,541 million for the nine months
period ended September 30, 2007 and 2008, respectively, representing less than 0.1 of total operating revenues for each period.
Telkomsel has an agreement with Lintasarta valid until October 31, 2010 and PT Artajasa Pembayaran Elektronis “Artajasa” valid until May 2008 a 39.8 owned subsidiary of Indosat
for the usage of data communication network system. The charges from Lintasarta and Artajasa for the services amounted to Rp.23,580 million and Rp.25,046 million for the nine months period
ended September 30, 2007 and 2008, respectively, representing 0.1 of the total operating expenses for each period.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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44. RELATED PARTY TRANSACTIONS continued
d. Others Transactions with all BUMN are considered as related parties transactions:
i The Company provides telecommunication services to substantially all Government
agencies in Indonesia which transactions are treated as that of third parties customers. ii
The Company has entered into agreements with Government Agencies and associated companies, namely CSM, Patrakom and PSN, for the utilization of the Companys satellite
transponders or frequency channels. Revenues earned from these transactions amounted to Rp.82,508 million and Rp.78,974 million for the nine months period ended September
30, 2007 and 2008, respectively, representing 0.2 of the total operating revenues for each period.
iii The Company provides leased lines to associated companies, namely CSM, Patrakom and
PSN. The leased lines can be used by the associated companies for telephone, telegraph, data, telex, facsimile or other telecommunications services. Revenues earned from these
transactions amounted to Rp.46,682 million and Rp.48,940 million for the nine months period ended September 30, 2007 and 2008, respectively, representing 0.1 of the total
operating revenues for each period.
iv The Company purchases property and equipment including construction and installation
services from a number of related parties. These related parties include, among others, PT Industri Telekomunikasi Indonesia “INTI” and Koperasi Pegawai Telkom “Kopegtel”.
Purchases made from these related parties amounted to Rp.89,047 million and Rp.499,079 million for the nine months period ended September 30, 2007 and 2008,
respectively, representing 0.7, and 4.2 of the total fixed assets purchased in each period.
v INTI is also a major contractor and supplier of equipment, including construction and
installation services of Telkomsel. Purchases from INTI for the nine months period ended September 30, 2007 and 2008 amounted to Rp.83,544 million and Rp.21,422 million,
respectively, representing 0.7 and 0.2 of the total fixed assets purchased in each period.
vi Telkomsel has an agreement with PSN for the lease of PSN’s transmission link. Based on
the agreement, which was made on March 14, 2001, the minimum lease period is 2 years since the operation of the transmission link and is extendable subject to agreement by both
parties. The agreement was extended until March 13, 2011. The lease charges amounted to Rp.109,692 million and Rp.99,466 million for the nine months period ended
September 30, 2007 and 2008, respectively, representing 0.4 of the total operating expenses for each period.
vii The Company and its subsidiaries insured their property, plant and equipment against property losses, inventories and employees social security from Jasindo, PT Asuransi
Tenaga Kerja and Jiwasraya, state-owned insurance companies. Insurance premiums amounted to Rp.210,199 million and Rp.250,391 million for the nine months period ended
September 30, 2007 and 2008, respectively, representing 0.8 and 0.9 the total operating expenses for each period.
