- 43 - Indosat and PSN. Other private satellites serving the broadcasting market within the coverage of the Telkom-1 and Telkom-2
The satellite industry in Indonesia is one of the most competitive in Southeast Asia. This is evident from the shift in market structure since 2003 from monopoly to oligopoly. One of the reasons for this shift in market structure is that the domestic satellite
industry is not strictly regulated by the Government of Indonesia. Although Ministerial Regulation No.37PM.KOMINFO122006 dated December 6, 2006 issued by the MoCI was intended as an entry barrier for foreign satellite
operators, the currently applied “open sky” policy has in fact increased competition amongst domestic and foreign satellite operators. Another factor in the shift in market structure is the limited capacity of domestic satellite operators, which are thus
unable to benefit from the fast growing market demands in Indonesia.
In view of market opportunities and limited supply, we plan to expand our satellite business with the construction of Telkom-3S satellite through a partnership on acquired orbital slot. The Telkom-3S satellite is currently under development.
The current trend in the satellite business is the development of broadband satellite. As the bandwidths in the C-Band and Ku- Band frequencies are fully utilized, utilization of the Ka-Band frequencies will become an option. The technology for Ka-Band
frequencies has been progressing rapidly in the last decade. Broadband satellite utilize Ka-Band frequencies with a re-use configuration, resulting in capacities of up to 100 Gbps. Currently, we are engaged in design and demand studies for broadband
satellites.
F. BTS
As of December 31, 2013, we operated 75,579 BTS located throughout Indonesia. Through our subsidiary, Dayamitra, we lease out space to other operators to place their telecommunications equipment on these towers, for which we receive a fee. Our
principal competitors in this business are XL Axiata, Indosat, Bakrie Telecom and PT Tower Bersama Infrastructure Tbk.
G. Others
Deregulation in the Indonesian telecommunications sector has encouraged competition in the multimedia, internet, and data communications services businesses. The diversification of businesses has gained momentum with the result that competition is
now intense, particularly in terms of price, range of services offered, quality and network coverage, as well as customer service quality.
Licensing
To provide national telecommunications services, we have a number of product and service licenses that are consistent with the applicable laws, regulations or decrees.
Following the issuance of MoCI Regulation No.01PERM.KOMINFO012010 “MoCI Decree No.012010” dated January 25, 2010 concerning the Provision of Telecommunication Network, we were required to adjust our telecommunications license to provide
telecommunications services. We have secured new licenses that have been adjusted as required of which are as follows:
A. Fixed Network and Basic Telephony Services
Based on the report submitted by us concerning the operation of fixed network and as part of the adjustment to MoCI Decree No.012010, we had our licenses adjusted in 2010 for the operation of local fixed network, domestic long distance, international
call and closed fixed network, explained as follows:
MoCI Decree No.381KEPM.KOMINFO102010 dated October 28, 2010 on the License of Operating Local Fixed Network and Basic Telephony Services of PT Telekomunikasi Indonesia Tbk;
MoCI Decree No.382KEPM.KOMINFO102010 dated October 28, 2010 on the License of Operating Fixed Network of
Domestic Long Distance and Basic Telephony of PT Telekomunikasi Indonesia Tbk;
MoCI Decree No.383KEPM.KOMINFO102010 dated October 28, 2010 on the License of Operating Fixed Network of International Call and Basic Telephony Services of PT Telekomunikasi Indonesia Tbk; and
MoCI Decree No.398KEPM.KOMINFO112010 dated November 12, 2010 on the License of Operating Closed Fixed
Network of PT Telekomunikasi Indonesia Tbk. Following the issuance of MoCI Decrees No.381, 382 and 383, our previous licenses for operating a fixed network and basic
telephony services previously owned by us based on MoC Decree No.KP.162 of 2004 dated May 13, 2004 ceased to be in effect. The licenses do not have a set expiry date, but are evaluated every five years.
- 44 - B.
Cellular
Telkomsel holds licenses to operate a nationwide mobile cellular telephone network using 7.5 MHz of radio frequency bandwidth in the 900 MHz band, 22.5 MHz of radio frequency bandwidth in the 1800 MHz band, and 15 MHz of radio frequency bandwidth
in the 2100 MHz band. The licenses do not have a set expiry date, but will be evaluated every five years. Telkomsel also hold licenses from the Indonesian Investment Coordinating Board that permit Telkomsel to develop cellular services with national
coverage, including the expansion of its network capacity. In addition, Telkomsel holds permits and licenses from and registrations with certain regional governments andor governmental agencies, primarily in connection with its operations in such
regions, the properties it owns andor the construction and use of its BTS.
C. International Calls
