Threshold Passive Foreign Investment Company “PFIC” Classification Matters

required certain amendments to RIOs agreed upon in 2011. MoCI Regulation No.82006 stipulates that the RIO of telecommunications network operators generating operating revenue that is equal to or more than 25 of the combined revenues of all telecommunication operators that serve the same respective segment, must obtain ITRA’s approval, necessitating changes in our and Telkomsel’s RIOs which were approved on June 20, 2012. Until this report is published, no recalculation of interconnection fees for 2012 had been done as doing such should have been preceded by an evaluation on interconnection charges in 2011.

10. VoIP

In January 2007, the Government implemented new interconnection regulations and a five-digit access code system for VoIP services pursuant to MoCI Decree No.06PM.KOMINFO52005. Under the Decree, the prefix for VoIP, which was originally 01X, was changed to 010XY. On April 27, 2011, the MoCI issued Regulation No.14PERM.KOMINFO042011, as partly revoked by MoCI Regulation No. 11 of 2014, which imposed quality control standards in relation to VoIP services, which became effective three months thereafter, to which we and other operators must adhere the regulation.

11. IPTV

Several provisions in the MoCI Regulation No.11PERM. KOMINFO072010 “MoCI Regulation No.112010” regarding the Implementation of Internet Protocol Television IPTV Service has been amended by Regulation No.152014 regarding the Implementation of Internet Protocol Television IPTV Service that became the legal basis for the IPTV licensing and regulates the provision of IPTV services, including the rights and obligations of IPTV providers, technical standards, foreign ownership requirements and the use of domestic independent content providers. MoCI Regulation No.112010 recognizes IPTV as a convergence of telecommunications, broadcasting, multimedia and electronic transactions and provides that only a consortium comprising at least two Indonesian entities may be licensed as an IPTV provider. Referring to MOCI Regulation No.152014, the licenses that we needed, among others: a Local Fixed Network License, Mobile Network or Fixed Closed Network License; b Operating Internet Access ISP License; and c Broadcasting Operation of Subscription Television Broadcasting Services Institution License. Such a consortium may only provide IPTV services in the area covered by all three required licenses. This was in line with abolition of the provisions of the Implementation of Broadcasting Operation of Subscription Television Broadcasting Services Institution via cable, become Broadcasting Operation of Subscription Television Broadcasting Services Institution. In the Government Regulation No.522005 regarding the Broadcasting Implementation of Broadcasting Subscription Institute LPB mentioned that the broadcasting could be conducted via satellite, cable and terrestrial. Broadcasting via satellite could reach nationwide, while cable and terrestrial has a range of a particular region. LPB licenses of broadcasting via satellite owned by PT Indonusa Telkomvision became our legal basis became our legal basis to enforce IPTV services nationally.

12. Satellite

Our international satellite business is highly regulated. In addition to being subject to domestic licensing requirements and regulation for the use of orbital slots and radio frequencies, our satellite operations also been the subject of Radio Communications Agency of the International Telecommunication Union. Furthermore, MoCI Regulation No.372006 dated December 6, 2006 requires foreign satellite operators to obtain a landing right license to operate in Indonesia which requires i foreign satellite operators to coordinate with domestic satellite operators, including us, to ensure that no Indonesian satellite and terrestrial systems will be disrupted by their operation,and ii the country of origin of the foreign satellite operators must also give permission to the Indonesian satellite operators to operate in that country.

13. Consumer Protection

Under the Telecommunications Law, each network provider is required to protect consumer rights in relation to, among others, quality of services, tariffs and compensation. Customers injured or damaged by negligent operations may file claims against negligent providers. Telecommunications consumer protection regulations provide service standards for telecommunication operators. 14.USO All telecommunications operators, whether network or service providers, are bound by a USO regulation that requires them to contribute to providing telecommunication facilities and infrastructure in the interest of opening 147 2014 Annual Report PT Telkom Indonesia Tbk Persero