BRTI Expects SMS Cartel Should Not be Extended

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AKARTA (IndoTelko) - Indonesian Telecommunications Regulatory Body (BRTI) expects the SMS cartel case should not be extended after the Central Jakarta District Court's decision in granting the objection request related to the fixed SMS rate to the Business Competition Supervisory Commission (KPPU) on Wednesday (27/5).

 
Judge Robert Siahaan in his verdict has canceled the Commission Number 26 / KPPU-L / 2007 where one of the judges taken into consideration that the commissioner does not include short messages service nominal rates to be paid by consumers.
 
In fact, this element must also be included to prove the existence of a violation of Law No. 5 of 1999 concerning the Prohibition of Monopolistic Practices and Unfair Business Competition.
 
"We hope that the matter can be done here, because we have similar goal that is giving the best for the society. There are still many agendas to be coordinated with the Commission, especially about the consolidation issue in the mobile industry. We will come to the Commission to jointly promote synergy of the telecommunications industry in order to further contribute to the economy," said the BRTI Committee Member Imam Muhammad Nasir to IndoTelko in a brief message, yesterday.
 
Previously, in the SMS cartel rumors determinate by the commission in June 2008 and there were six operators accused namely PT Excelcomindo Pratama Tbk (now PT XL Axiata Tbk), PT Telecommunication Cellular, PT Bakrie Telecom Tbk, PT Telkom Indonesia Tbk, Mobile-8 Telecom and PT Smart Telecom.
 
In its decision some time ago, the court established that the applicant is not proven to have violated the Article 5 of Law on Monopoly.
 
According to the court, the Commission could not prove the violation of Article 5, which says that businesses are prohibited from making agreements with business competitors to fix the price of goods and or services that must be paid by consumers or customers in the same market.
 
The commission is reportedly will make an appeal. As the Commission calculated that in the 2002-2008 period there is a considerable margin between the SMS price and the operators production cost.
 
According to the Commission, the cost of production is only in the range of Rp42 to Rp72 per SMS, while the SMS rates back then reached Rp350.
 
The ongoing court process was quite long. In 2011, the Supreme Court (MA), said it would explore the allegation of deliberate delay up to two years regarding the appointment of the merger trial decision in the legal remedy of appealing the commission's verdict on SMS cartel cases.
 
The commission's verdict in June 2008 is the result of the commission's assembly that found the clause of fixing the SMS rate should not be lower than the prevailing rates ranging from Rp250-Rp350 contained in the interconnection Agreement of Cooperation (MCC) between operators. Based on these calculations, the estimated competitive SMS net price is Rp114.

Competitive rates refer to the interconnection SMS service rates origination from Rp38 and Rp38 termination according to the OVUM calculation results, coupled with the Retail Services Activities Cost (RSAC) amounted to 40% of the cost of interconnection and profit margins of 10%.
JAKARTA (IndoTelko) - Indonesian Telecommunications Regulatory Body (BRTI) expects the SMS cartel case should not be extended after the Central Jakarta District Court's decision in granting the objection request related to the fixed SMS rate to the Business Competition Supervisory Commission (KPPU) on Wednesday (27/5).
 
Judge Robert Siahaan in his verdict has canceled the Commission Number 26 / KPPU-L / 2007 where one of the judges taken into consideration that the commissioner does not include short messages service nominal rates to be paid by consumers.
 
In fact, this element must also be included to prove the existence of a violation of Law No. 5 of 1999 concerning the Prohibition of Monopolistic Practices and Unfair Business Competition.
 
"We hope that the matter can be done here, because we have similar goal that is giving the best for the society. There are still many agendas to be coordinated with the Commission, especially about the consolidation issue in the mobile industry. We will come to the Commission to jointly promote synergy of the telecommunications industry in order to further contribute to the economy," said the BRTI Committee Member Imam Muhammad Nasir to IndoTelko in a brief message, yesterday.
 
Previously, in the SMS cartel rumors determinate by the commission in June 2008 and there were six operators accused namely PT Excelcomindo Pratama Tbk (now PT XL Axiata Tbk), PT Telecommunication Cellular, PT Bakrie Telecom Tbk, PT Telkom Indonesia Tbk, Mobile-8 Telecom and PT Smart Telecom.
 
In its decision some time ago, the court established that the applicant is not proven to have violated the Article 5 of Law on Monopoly.
 
According to the court, the Commission could not prove the violation of Article 5, which says that businesses are prohibited from making agreements with business competitors to fix the price of goods and or services that must be paid by consumers or customers in the same market.
 
The commission is reportedly will make an appeal. As the Commission calculated that in the 2002-2008 period there is a considerable margin between the SMS price and the operators production cost.
 
According to the Commission, the cost of production is only in the range of Rp42 to Rp72 per SMS, while the SMS rates back then reached Rp350.
 
The ongoing court process was quite long. In 2011, the Supreme Court (MA), said it would explore the allegation of deliberate delay up to two years regarding the appointment of the merger trial decision in the legal remedy of appealing the commission's verdict on SMS cartel cases.
 
The commission's verdict in June 2008 is the result of the commission's assembly that found the clause of fixing the SMS rate should not be lower than the prevailing rates ranging from Rp250-Rp350 contained in the interconnection Agreement of Cooperation (MCC) between operators. Based on these calculations, the estimated competitive SMS net price is Rp114.

Competitive rates refer to the interconnection SMS service rates origination from Rp38 and Rp38 termination according to the OVUM calculation results, coupled with the Retail Services Activities Cost (RSAC) amounted to 40% of the cost of interconnection and profit margins of 10%.

According to the proportion of the operator's market share for have been running for four years on SMS cartel practices, Telkomsel has made the largest consumer losses reached Rp2.1 trillion. Followed by XL Rp346 billion, Telkom Rp173.3 billion, Bakrie Rp62,9 billion, Mobile-8 Rp52.3 billion and Smart Rp0.1 billion.(es)