KPPU rules against Telkom

Tony Hotland, The Jakarta Post/Jakarta

The Business Competition Supervisory Agency (KPPU) ruled on Friday that telecommunications company PT Telekomunikasi Indonesia (Telkom) was guilty of violating Law No. 5/1999 on Monopolies and Unfair Competition.

KPPU member Tadjuddin Noersaid said Telkom was proven guilty of blocking rival PT Indonesian Satellite Corporation (Indosat) from providing its international call dial service, 001 and 008, in phone shops.

The problem started when Telkom launched its international call service using Voice over Internet Protocol (VoIP) technology with code 017 in 2001.

"Indosat said people started having difficulties connecting via 001 and 008 as the lines were blocked by Telkom. The Directorate General of Posts and Telecommunications surveyed a number of phone shops and discovered that connections to 001 or 008 were either rerouted to 017 or frequently unsuccessful," said Tadjuddin.

For international call connections from non-cellular phones, Indosat depends on Telkom's fixed-line network since the latter is the only operator that has a nationwide network.

The problem got worse, said Tadjuddin, when Telkom started setting up its own Telkom phone shops that provide only Telkom services.

"These phone shops are exempt from setup and monthly subscription fees, which made business players start switching to operate Telkom phone shops instead," he explained.

KPPU ordered Telkom to revoke all of its policies regarding its phone shops, as a Ministry of Communications decree stipulates that phone shops must provide communications services from all operators, and to open all communications lines, including Indosat's.

Telkom has been given 14 days to respond to the KPPU verdict. The KPPU has yet to decide on sanctions on Telkom if it fails to comply with the ruling.