Debunking an allegation currently being investigated by the Business Competition Supervisory Commission (KPPU), a new study concludes that Singapore's Temasek Holdings does not have a monopoly over Indonesia's mobile telecoms market.
"Judged from many perspectives, Temasek has not violated article 27 of the Antimonopoly Law," a senior economist with the Center for Strategic and International Studies (CSIS), and also a former KPPU member, Pande Radja Silalahi, told a seminar on competition law Thursday in Jakarta.
Temasek has been accused of violating the article, which says that a company is prohibited from owning majority stakes in a number of similar firms operating in the same field in the same market if such ownership would give it control over 50 percent of the market for a particular type of good or service, or give two or three business actors, or a group of business actors, control over 75 percent of the market for a particular type of good or service.
According to the study, which was headed by Pande and based on the latest data and figures from the mobile telecoms industry, the market share of the Singapore-owned company, viewed from the perspective of operating income, only amounted to about 20.12 percent of the total industry in 2006, and has, in fact, been declining since 2004.
"Temasek's market share in Indonesian mobile telecom industry, going by operating income, dropped from 21.56 percent in 2004 to 21.11 percent in 2005, and then to 20.12 percent in 2006," he said.
He also said that from the perspective of the company's gross added value, which includes variables such as employee salaries, Temasek holds a 19.79 percent market share.
"The gross added value perspective is also being used by the KPPU, and, in this regard too, I found that Temasek does not have a majority market share," he said.
Meanwhile, based on the number of customers -- the variable that is most commonly used to judge whether a monopoly exists -- Temasek only controlled about 19.18 percent of the market through its subsidiaries in 2006.
Temasek owns 54.15 percent of the shares in SingTel Group, which in turn owns 35 percent of Indonesia's largest mobile telecoms company, Telkomsel.
Meanwhile, Singapore Technologies Telemedia (STT), which is wholly owned by Temasek, holds a 75 percent stake in Asia Mobile Holdings, which in turn holds a 41.9 percent stake in Indosat.
Based on this ownership tree, Pande said, Temasek indirectly owned 30.6 percent of Indosat and 18.9 percent of the country's biggest mobile telecoms company, Telkomsel.
The KPPU is supposed to have concluded its investigation into the Temasek case by August 15.
Recently, KPPU head Muhammad Iqbal told The Jakarta Post that the investigators were still trying to get a second opinion regarding a study by the University of Indonesia's Institute for Economic and Social Research (LPEM-UI) that claimed there were indications of a monopoly in the mobile telecoms industry that had led to tariff fixing.
The head of the LPEM-UI research team, Nuzul Achjar, agreed that there needed to be a second opinion. However, he acknowledged there were not many experienced researchers in Indonesia who were capable of doing it.
"So far, nobody has been willing to come forward and do the job," Nuzul said earlier this week.
Apart from having trouble finding a second expert opinion, the KPPU was recently criticized by an organization calling itself Indonesia Development Monitoring (IDM) for allegedly showing bias in handling the case, as, it claimed, shown by delays in the investigation, which started last October, and for talking the media openly about the allegations prior to the reaching of a determination.
Find Article by Date