Indosat to appeal court decision on misuse of spectrum

10 Jul 2013

Indonesian telecoms operator PT Indosat, the parent company of internet and multimedia services provider Indosat Mega Media (IM2), intends to appeal a ruling by the Jakarta Corruption Court that found the subsidiary venture guilty of illegally using Indosat-owned spectrum to offer wireless services. Antara News quotes a spokeswoman for Indosat’s regulatory department as saying that the appeal is crucial as ‘the verdict won’t do any good for the whole telecommunication industry’. The company insists it has not broken any rules or regulations, not least Government Regulation No.52/2000 – the specific article cited by the court panel of judges when passing sentence on the firm.

As reported in yesterday’s CommsUpdate, Indar Atmanto, a former director of IM2, has been imprisoned for four years for his misuse of 3G/HSDPA broadband spectrum owned by Indosat, and ordered to pay fines totalling IDR200 million (USD20,000). The official’s actions whilst at IM2 are understood to have cost the government up to IDR1.36 trillion. Indar was found guilty of illegally using Indosat-owned spectrum to offer wireless services through IM2, with chief judge Antonius Widjantono quoted as saying: ‘The defendant is proven legally and convincingly guilty of grafting’. The court’s verdict was based on Article 2 Paragraph 1 of Law No. 31/1999 on Eradicating Criminal Act of Corruption, as amended by Law No 20/2001 relating to Article 55 Paragraph 1 of the Criminal Code, the chief judge said.

Although the parent company was allocated rights to use the 2.1GHz band at a subsidised rate – by dint of it being partly state-owned – the firm took the decision to extend the rights of usage to IM2 (a privately owned company) contrary to local rules, and as such denying the government the requisite spectrum fees. In the corruption court ruling, the subsidiary was also ordered to pay up fines of IDR1.36 trillion to offset state losses.

Indonesia, Indosat Ooredoo Hutchison (IOH)