Telkomsel appeals ‘bankruptcy’, but court decision puts 3G plans in jeopardy

24 Sep 2012

As expected, Indonesia’s leading mobile operator by subscribers PT Telkomsel, a unit of Telkom Indonesia, has launched an official appeal against a court’s decision to declare it bankrupt for the non-payment of a relatively small sum of USD555,700. Although the court’s decision has highlighted the country’s potentially flawed legal framework, the fallout now threatens to jeopardise the carrier’s 3G expansion plans as it lines up to bid for one of two additional 3G mobile frequencies being sold by the government. According to the ICT ministry, companies which are classified as bankrupt or under court scrutiny are deemed ineligible to take part in the tender process. According to one source, IndoTelko, the ministry is postponing its auction to give Telkomsel time to resolve the matter and participate in the auction. Moreover, the regulator has yet to finalise its plans for the auction proper, which will buy Telkomsel more time. Meanwhile, The Jakarta Post writes that officials have visited Telkomsel’s premises to settle the debt as per the court’s orders.

As reported by TeleGeography’s CommsUpdate, Telkomsel was hauled into court by pre-paid phone voucher firm PT Prima Jaya, over the non-payment of a USD555,700 bill. The commercial court in Jakarta upheld the claim and ruled Telkomsel ‘bankrupt’ on 14 September – despite the cellco booking 1H12 net profits of USD770 million. The matter is expected to be resolved in the upper courts and to date, has had only a marginal impact on the group’s share price.