PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated Table of Content
34. SIGNIFICANT COMMITMENTS AND AGREEMENTS continued c. Others continued
iv USO continued b. Telkomsel continued
On March 31, 2014, the USO program for packages 1,2,3,6and 7 wereceased. As of September 18, 2014, Telkomsel filed an arbitration claim to BANI for the settlement of the
outstanding receivable from BPPPTI. On October 23, 2015, BANI decided that Telkomsel should pay the overpayment by BPPPTI for the USO program amounting to Rp94.2 billion.
Telkomsel accepted the decision and paid the overpayment in December 2015. On October 29, 2015, BPPPTI informed that operational license for USO program of “Desa Pinter” could
not be issued. On January 2016, Telkomsel filed an arbitration claim to BANI for terminating the USO program.
As ofDecember 31, 2016 and 2015, the Company’s and Telkomsel’s net carrying amount of trade receivables for the USO programs which are measured at amortized cost using the
effective interest method amounted to Rp178 billion and Rp179 billion, respectively Note 5.
35. CONTINGENCIES
In the ordinary course of business, the Group has been named as defendants in various legal actions in relation with land disputes, monopolistic practice and unfair business competition and SMS cartel
practices. Based on managements estimate of the probable outcomes of these matters, the Group has recognized provision for losses amounting to Rp43 billion as of December 31, 2016.
a. The Company, Telkomsel and seven other local operators are being investigated by The Commission for the Supervision of Business Competition
Komisi Pengawasan Persaingan Usaha or “KPPU” for allegations of SMS cartel practices. On June 17, 2008, in case No. 26KPPU-
L2007, the Company, Telkomsel and seven other local operators was investigated. As a result of the investigations, KPPU stated that the Company, Telkomsel and five other local operators had
violated Law No. 5 year 1999 article 5 and charged the Company and Telkomsel in the amounts of Rp18 billion and Rp25 billion, respectively.
Management believes that there are no such cartel practices that led to a breach of prevailing regulations. Accordingly, the Company and Telkomsel filed an appeal with the Bandung District
Court and South Jakarta District Court on July 14, 2008 and July 11, 2008, respectively. Seven other local operators also filed an appeal in various court. Regarding the case, the KPPU
requested the Supreme Court SC to consolidate the cases into the Central Jakarta District Court. Based on the SC’s decision letter dated April 12, 2011, the SC appointed the Central Jakarta
District Court to investigate and resolve the case.On May 27, 2015, Central Jakarta District Court in case No. 03KPPU208PN.JKT.PSTdecided that the Company, Telkomsel and seven other
local operators upon the case. On July 23, 2015, KPPU filed an appeal to the SC regarding the case of SMS cartel
practices.OnFebruary 29, 2016, the SC in case No. 9 KPdt.Sus-KPPU2016 decided on the case in favor of KPPU, therefore that the Company and Telkomsel have to pay penalty charged by
KPPU amounting to Rp18 billion and Rp25 billion. As of the date of approval and authorization for the issuance of the consolidated financial statements, the Company and Telkomsel have paid the
penalty to the treasury fund. b. The Company is a defendant in a case filed in Makassar District Court by Andi Jindar Pakki and
his affiliates over a landproperty at Jl. A.P. Pettarani. On May 8, 2013, the court pronounced its verdict that the Company to pay fair compensation or to vacate and surrender the disputed land to
the plaintiffs.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated Table of Content
35. CONTINGENCIES continued
