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Free to Choose

The Supreme Court orders PT Telkom to revoke its provision banning the entry of other business players. Wartel no longer only provide channel 017.

WARTEL (telecommunication shops) users interested in making direct international calls through channels 001 and 008 should be patient for a while. Despite the Supreme Court’s decision requiring PT Telkom to annul the blocking of both channels, the verdict turns out to have not reached Telkom headquarters in Bandung yet. “We haven’t received the decision,” said a spokesman for Telkom, Eddy Kurnia.

The Supreme Court in mid-January issued an important decree for wartel consumers. The Court stated that Telkom was in breach of the Anti-Monopoly and Unfair Competition Law, by monopolizing international lines via channel 017. In this way, only this channel has been available in telecommunication kiosks.

The Court’s decree strengthened a decision of the Business Competition Supervisory Commission (KPPU). Earlier, the KPPU handling the case of Telkom’s monopoly ordered Telkom to lift the blockade on the international channels of 001 and 008 for violating the Anti-Monopoly Law.

The case started from reports concerning the blockade on both Indosat’s international channels filed by a number of wartel. “Reports came from regional wartel frequented by foreign tourists, such as those in Batam and Bali,” said Chairman of the Indonesian Wartel Business Association, Sriyanto.

Some of them, added Sriyanto, complained that they could not use 001 and 008 for international calls. Others said the channels could be used but were transferred to 017. This is Telkom’s international channel applying the VoIP (voice over Internet protocol) technology. Sadly, the voice it conveys is not so clear. “Many consumers complain because channel 017 is not good,” revealed Sriyanto.

The KPPU intervened after being informed of the case. In February 2004 the KPPU took up the matter. Seven months later, in August 2004, the KPPU arrived at a decision: Telkom proved to have practiced monopoly. The company was ordered to cancel the provision that wartel could only sell the product of Telkom.

Telkom rejected the decision and brought the case to the Bandung District Court. The outcome was to Telkom’s relief. According to the court, the KPPU’s decision was defective for having failed to apply the procedure required. It argued that besides Telkom’s witnesses not being under oath, KPPU members were not thorough when examining the case. The court verdict passed in November 2005 blamed the KPPU for ignoring the exclusive right of Telkom to domestic service.

Later the KPPU appealed against the court verdict. The Supreme Court eventually supported the KPPU’s decision. On January 15, the appeal judicial panel presided over by Marianna Sutadi overturned the District Court verdict. According to the Supreme Court, the KPPU had properly applied the procedure of the Anti-Monopoly Law to deal with the case. The Court shared the KPPU’s view regarding the substance of the case. “The exclusive right is not always unalienable though compensation is not yet paid,” said the judges’ panel.

The Supreme Court acknowledged that Telkom and Indosat were indeed given exclusive rights by the government, with domestic channels for Telkom and international channels for Indosat. But the Telecommunications Law was introduced in 1999 and those rights were discontinued. The Minister of Communications in 2004 also issued a decree on the termination of those exclusive rights.

KPPU Chairman Mohammad Iqbal said in the examination Telkom claimed that it had demanded government compensation for the loss of its exclusive right, which had not yet been granted. Owing to the as yet unpaid compensation, Telkom imposed the ban on other products in wartel. But the Supreme Court held the view that such an excuse could not be used to practice monopoly. “The unpaid compensation concerns Telkom and the government,” added Iqbal. Asked about the compensation, Telkom spokesman Eddy Kurnia refused to comment. “The compensation was settled,” he replied. How much? “I don’t remember,” said Eddy.

Unlike the KPPU, Telkom has not yet received the Supreme Court’s decree. Court spokesman Djoko Sarwoko said it would take quite a long time from the decision’s announcement to the delivery of its copies. “It may take six months,” he pointed out. It’s because, added Djoko, the justices had to correct the content and spelling of the decision before being sent to the relevant court and disputing parties.

Indosat warmly welcomed the Supreme Court ruling. “The aspect of competition has to be maintained,” said Indosat spokesperson Adita Irawati. The Indonesian Consumers Foundation (YLKI) was also delighted by the decision. “The abolition of monopoly means freedom for the consumers to choose,” said YLKI Chairperson Indah Suksmaningsih.

Wartel can also benefit from this decision. While in the past they had to cooperate with Telkom without other alternatives, now variations are forthcoming. “It’s favorable to consumers as they can choose the services they like,” said Sriyanto. As for profit, according to him, direct international calls are in fact only lucrative to large wartel in regions teeming with foreign tourists. In Sriyanto’s records, so far there have been about 130,000 wartel out of 190,000 facilities cooperating with Telkom. Their profit sharing is fixed at 30 percent for wartel and 70 percent for Telkom.

Iqbal believed that the Supreme Court ruling would benefit consumers because of upcoming competition. He referred to Singapore, where he said telecommunication services were inexpensive due to competition between Singapore Telecom Mobile and Singapore Technologies Telemedia. “Without competition, prices won’t go down.”

Abdul Manan, Rinny Srihartini (Bandung)

Tempo Magazine, No. 34/VII/Apr 24 - 30, 2007

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