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. C l a ss i f i c at i o n a n d L i ce n s i n g o f 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 classified network operations into fixed 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 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.
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 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.
Pursuant to MoCI Decree No.432007, we opened our network to the “01X” three-digit DLD access service in
Balikpapan by April 3, 2008. Since that date, our customers are able to make DLD calls from Balikpapan by first
dialing Indosat’s “011”. As stipulated in MoCI Regulation No.432007, we have provided a nation-wide network
for three-digit access code for fixed and fixed wireless DLD with “01X” that can be used by Indosat or other
licensed operator starting September 27, 2011. To date, no other licensed operators have submitted a request
to us to connect their networks and enable DLD access.
6. 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”.
7. Limited Mobility Wireless Services
MoC Decree No.KM.352004 dated March 11, 2004 regarding Implementation of Fixed Wireless Networks
with Limited Mobility, as amended by MoCI Decree No.16 PERM.KOMINFO062011 dated June 27, 2011, “MoC
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Decree No.KM.352004” provides that only local fixed network operators holding licenses issued by the MoC
may offer limited mobility wireless or fixed wireless access services. In addition, MoC Decree No.352004
states that each limited mobility wireless access operator must provide basic telephone services. Under an automated
migration feature, customers are able to make and receive calls on their fixed limited mobility wireless access phones
using a different number with a different area code.
8. Cellular
Cellular telephone service is provided in Indonesia on the radio frequency spectrum of 1.8 GHz DCS technology,
2.1 GHz UMTS technology and 900 MHz GSM and UMTS technology. The MoCI regulates the use and
allocation of the radio frequency spectrum for mobile cellular networks. Telkomsel has obtained frequency
allocation for cellular services on the 900 MHz, 1.8 GHz and 2.1 GHz frequency bands. For the allocation of radio
frequency spectrum 2.1 GHz, in 2006 the government allocates a tender process for the allocation of 5 MHz,
whereas for the allocation of additional radio spectrum allocated through an evaluation mechanism in 2009 and
selection in 2013 where each is the addition of 5 MHz. The allocation of bandwidth in the 2.1 GHz frequency
spectrum is regulated by:
MoCI Decree No.19KEPM.KOMINFO22006 dated February 14, 2006 regarding the Determination of
Winner of IMT-2000 Mobile Cellular Operator Selection at 2.1 GHz Radio Frequency Band.
MoCI Decree No.268KEPM.KOMINFO92009 regarding the Determination of Additional Allocation
of Radio Frequency Bandwidth Blocks, Tariffs, and Payment Scheme Radio Frequency Spectrum Right
of Usage Fees for IMT-2000 Moble Cellular Operators at 2.1 GHz Radio Frequency Band.
MoCI Decree No.191 Year 2013 regarding the Determination of PT Telekomunikasi Selular as Winner
in the Selection of Users of Additional Frequency Bandwidth at 2.1 GHz Radio Frequency Band for
IMT-2000 Moble Cellular Operators.
9. Interconnection
The Telecommunications Law expressly prohibits monopolistic and unfair business practices and requires
network providers to allow users to access other users or obtain services from other networks by paying
interconnection fees agreed upon by each network operator. Government Regulation No.522000 dated
July 11, 2000 regarding Telecommunications Operations provides that interconnection charges between two or
more network operators must be transparent, mutually agreed upon and fair.
On February 8, 2006, the MoCI issued Regulation No.8 PERM.KOMINFO022006 on Interconnection “MoCI
Regulation No.82006”, mandated a cost-based interconnection tariff scheme for all network and services
operators replacing the previous revenue-sharing scheme. Under the new scheme, interconnection charges are
determined by the network operator on which a call terminates based on a long-run incremental cost formula.
MoCI Regulation No.82006 requires operators to submit to the ITRA annual RIO proposals containing proposed
interconnection tariffs for the coming year. Operators are required to use the cost-based methodology in
preparing RIO proposals, and the ITRA and MoCI are required to use the same methodology in evaluating the
RIO proposals and approving interconnection tariffs.
Pursuant to MoCI Regulation No.82006 and ITRA Letter No.246BRTIVIII2007 dated August 6, 2007, we
submitted a RIO proposal to the ITRA in October 2007, which covered adjustments for operational, configuration,
technical and service offerings. In December 2007, we and all other network operators signed new interconnection
agreements that superseded previous interconnection agreements between us and other network operators
which also amended all interconnection agreements signed in December 2006.
On February 5, 2008, the ITRA required that we and other operators begin implementing the cost-based
interconnection tariff regime. On April 11, 2008, pursuant to Directorate General of Post and Telecommunication
“DGPT” Decree No.2052008, the ITRA and the MoCI approved RIO proposals from all operators to replace
previous interconnection agreements. The RIO approved in 2008 was effective until July 29, 2011 when new
interconnection charges were implemented as stipulated in ITRA Letter No.227BRTIXII2010 dated December
31, 2010 regarding the Implementation of Interconnection Charges in 2011. This is the result of interconnection
charges recalculation conducted in 2010 by MoCI that was agreed on by all operators and outlined in a
Memorandum of Understanding. The results of this interconnection charges reform caused a slight decrease
in interconnection costs.
On December 12, 2011, the ITRA changed the SMS interconnection fee basis from a “Sender Keep All” basis
to a cost basis interconnection fee calculation which
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FINANCIAL AND PERF
ORMANCE HIGHLIGHT
MANA GEMENT
REPOR T
PREF A
GENERAL INF
ORMA TION OF
TELK OM INDONE
SIA
MANA GEMENT’S DISCUSSION
AND ANAL Y
SIS
CORPORA TE GO
VERNANCE
SOCIAL AND ENVIRONMENT
AL
RE SPONSIBILITY
APPENDICE S
