Syahrial Ali's Blog

The Indonesian Ministry of Communication and Information Technology announced last Tuesday that it is investigating telecommunications companies that do business with Israel.

This announcement came the day after the communication and information technology minister disclosed that Amdocs was being excluded from a local tender because the controlling shareholders are Israeli.

The Jakarta Globe reported that on Monday Communications and Information Technology Minister Tifatul Sembiring said that Amdocs should not be included in the billing tender of Indonesian cellular service provider Telkom PT because Amdocs has Israeli shareholders. A spokesman said the ministry will investigate Israeli-affiliated telecommunications companies and sanction those found to be in violation of the regulation.

Sembiring is a member of PKS, the conservative Islamic Prosperous Justice Party, and said excluding Amdocs from the tender was justified because Israel has no diplomatic relations with Indonesia.

The newspaper also noted the criticism from a local consumer organization, whose analyst called Sembiring’s action “irrelevant” and unwise. The analyst said that Israeli technology was commonly used in the information-technology sector because Israel is a major producer of high-tech components, and Indonesia imports 90% of the telecommunication parts used in the country.

“Many of these could be from Israeli manufacturers or come from companies with Israeli shareholders,” he said. “How about products from Taiwan? Many of our telecommunications products are from Taiwan – another country that does not have diplomatic relations with Indonesia.”  (taken from: Haaretz.com)

On January 16th this year, President Republic of Indonesia has signed a Presidential decree no 7 about Tariff and Type of Non-Tax State Income in the Department of Communication and Information. Similar with other rule or decree, this decree valid from the date of signing. With the enactment of this decree, the previous regulation, namely Regulation No. 28 Year 2005 on the same issue is revoked and declared invalid.

However, exceptions apply to administrative sanctions from the telecommunications operation, because Article 14 mentions in full, that the imposition of tariffs on the types of non-tax state revenue derived from the Organization of Post and Telecommunications such as: a. administrative sanctions in the form of fines for violations of the permit obligation telecommunications network administration and / or basic telephony services; and b. administrative sanctions in the form of fines for breach of obligation of the organization permit value-added telephony services and multimedia services, entered into force 1 (one) year after this Government Regulation set. Hence the imposition of sanctions fines began an effective force on the date of January 16, 2010.

Although previously announced as in press releases dated February 3, 2009, and yet through this press release, the regulator wants to remind the Regulation No. 7 year 2009 to the telecommunications providers so they can prepare themselves better before the enactment of the provisions of the fine sanctions. The consequences of the implementation of such regulation can significantly impact for the telecommunications rules violator.

Below are several important things on Regulation no 7 of year 2009.
1. Administrative sanctions for non-achievable development:
- less than 40% from commitment: IDR 600m
- between 41% to 70% from commitment: IDR 400m
- between 91% to 90% from commitment: IDR 200m
2. Sanction in the form of fine for not meeting service quality standards are set according to prevailing regulation, IDR 200m / item.
3. Sanctions in the form of fines for violations due to the absence of compliance with the provision of interconnection schedule (schedule process of the answer, schedule negotiation process, the process of providing access to schedules, etc.) as stipulated in the regulations, IDR 600m / item.
4. Sanctions in the form of fines for violation of price discrimination and interconnection access, IDR 10b.
5. Sanctions in the form of fines for violations of use of domestic products due to capital expenditures that do not meet the applicable provisions, 15% x (Cons Obligations)% x Capital Expenditures / year.
6. Sanctions in the form of fines for violations of the use of domestic production due to operational expenditures that do not meet the applicable provisions, 15% x (Cons Obligations)% x Operational Expenditures / year.
7. Does not meet the minimum services which must be provided, IDR 10m / service.

(translated from www.postel.go.id)