Telecommunications Law AR TELKOM 2015 ENG.

171 PT Telkom Indonesia Persero Tbk Regulation No.17PERM.KOMINFO102010 regarding the Organization and Administration of Ministry of Communication and Information. Following the reforms, certain adjustments were made through MoCI Regulation No.15PERM.KOMINFO062011 dated June 20, 2011 regarding title adjustments in a number of Decrees andor MoCI regulations that regulate Special Materials in Post and Telecommunications andor in Decrees of the Director General of Posts and Telecommunications, which transfer all substances related to the postal and telecommunications sectors to the DGPIO including licensing, numbering, interconnection, universal service obligation and business competition. Meanwhile, matters related to radio frequency spectrum and standardization of telecommunications equipments were transferred to the DGRE. Following the enactment of the Telecommunications Law, the MoC established an independent regulatory body as stipulated in MoC Decree No.KM.312003 dated July 11, 2003 regarding the Establishment of the ITRA which was later revoked by MoC Regulation No.KM.36PERM. KOMINFO102008 dated October 31, 2008 and amended by MoCI Regulation No.1PERM.KOMINFO022011 dated February 7, 2011 “MoCI Regulation No.362008”. Pursuant to MoCI Regulation No.362008, the ITRA was assigned the authority to regulate the Indonesian telecommunication industry, including the provision of telecommunication networks and services. The ITRA which is chaired by the Director General of Post and Informatics Operations and comprises of nine members, including six members of the public, and three members selected from Government institutions DGRE and Director of DGPIO and a government representative appointed by the Minister of Communication and Information.

3. Classiication and licensing of telecommunications providers

The Telecommunications Law organized telecommunication services into following three categories: i provision of telecommunication networks, ii provision of telecommunication services, and iii 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 last amended by MoCI Regulation No.82015 regarding the Fourth Amendment of Decree of the Minister of Communication No.KM.212001 regarding the Provision of Telecommunications Service, are the principal implementing regulations governing licensing. MoCI Regulation No.12010 classiied network operations into ixed and mobile networks. MoC Decree No.KM.212001 categorized the provision of services into basic telephony services, value-added telephony services, and multimedia services.

4. introduction of Competition in the indonesian telecommunications industry

In 1995, we were granted a monopoly to provide local ixed 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 ixed 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.

5. 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 irst 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