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increase transparency and predictability of the regulatory framework;
create opportunities for national telecommunications operators to form strategic alliances with foreign partners;
create business opportunities for small and medium enterprises; and
facilitate new job opportunities.
A. Telecommunications Law
The telecommunications sector is primarily governed by Law No.36 year 1999 “Telecommunications Law”, which became effective on September 8, 2000. The Telecommunications Law sets guidelines for industry reforms, including industry
liberalization, facilitation of new entrants and enhanced transparency and competition.
The Telecommunications Law eliminated the concept of “organizing entities” thereby ending our and Indosat’s responsibility for coordinating domestic and international telecommunications services, respectively. To enhance competition, the
Telecommunications Law prohibits monopolistic practices and unfair competition among telecommunications operators.
The Telecommunications Law was implemented through several Government Regulations, Ministerial Regulations and Ministerial Decrees. The most important of such regulations include:
Government Regulation No.522000 regarding Telecommunications Services;
MoCI Regulation No.1PERM.KOMINFO012010 dated January 25, 2010 regarding Operation of Telecommunications
Networks;
MoC Decree No.KM.212001 regarding the Provision of Telecommunications Services that was most recently amended by MoCI Regulation No.31PERM.KOMINFO092008 regarding the Third Amendment of Decree of the Minister of
Communication No.KM.212001 regarding the Provision of Telecommunications Services;
MoC Decree No.332004 regarding Supervision of Healthy Competition in the Provision of Fixed Network and Basic Telephony Services; and
MoC Decree No.KM.42001 dated January 16, 2001 regarding the Determination of Fundamental Technical Plan National
2000 for National Telecommunications Development most recently amended by MoCI Regulation No.09PERM.KOMINFO062010 dated June 9, 2010 regarding the sixth amendment of MoC Decree No.KM.42001
regarding the Determination of Fundamental Technical Plan National 2000 for National Telecommunications Development.
B. Telecommunications Regulators
In February 2005, the authority to regulate the telecommunications industry was transferred from the MoC to a newly-established Ministry, the MoCI. Pursuant to authorities assigned to him through Telecommunication Law, the Minister of Communication
and Information sets policies, regulates, supervises and controls telecommunications industry in Indonesia. On October 28, 2010, MoCI engaged in certain organizational and administrative reforms that included transferring licensing and regulatory authority to
two newly established general directorates, the Directorate General of Posts and Informatics Resources and Equipment “DGRE” and Directorate General of Post and Informatics “DGPI” pursuant to MoCI 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 DGPI 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 DGPI and a government representative appointed by the Minister of Communication and
Information. Other regulatory functions of the ITRA include:
licensing of telecommunication networks and services;
implementation of operational and service quality standards;
governance of interconnection charges;
regulating telecommunication equipment standards; and
settlement of disputes between network operators and service providers.
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operating performance;
competition; and
utilization of telecommunication equipments.
C. Classification and Licensing of Telecommunications Providers
