Dian Kuswandini, The Jakarta Post, Jakarta | Sat, 06/21/2008 12:22 PM | Business
Directorate General of Post and Telecommunication questions a figure stipulated by a business competition watchdog on consumers' losses caused by price-fixing on text message services (SMS) and will challenge it after a final verdict from court.
The statement follows the ruling of the Business Competition Supervisory Commission (KPPU) Wednesday naming six local mobile communication operators for price fixing, causing estimated consumer losses of Rp 2.8 trillion (US$302.4 million) between early 2004 and April 2008.
The operators are PT Excelcomindo Pratama (XL), PT Telekomunikasi Seluler (Telkomsel), PT Telekomunikasi Indonesia (Telkom), Bakrie Telecom, Mobile-8 Telecom and Smart Telecom.
Director general Basuki Yusuf Iskandar said the losses claimed by the KPPU were based on a basic network cost calculated by the Indonesian Regulatory Agency for Telecommunications (BRTI) in 2007, which could not be applied retrospectively.
The KPPU assumed text-message tariffs should not be higher than Rp 114, as the BRTI had set the SMS basic network cost at Rp 76 in June last year.
However, Basuki said, "The basic cost was based on the market conditions in 2007, not in the previous years."
He said the basic network cost might have been higher between 2004 and 2006, making SMS costs higher too.
He said that the basic network cost changed all the time, depending on costs of information technology devices and infrastructure.
For example, he said, "The basic network cost as of April this year is Rp 52, making SMS costs lower than before."
"That was why the basic cost of Rp 76 could not be applied for SMS rates before 2007," Basuki added.
He also emphasized that the cost was not a gross rate cost.
"The cost of Rp 76 was only the basic cost for the network system. Operators can set higher rates, as they must also consider their margins and costs of retail activities like market research," Basuki said.
Based on these arguments, Basuki said, more research was needed before the KPPU could really claim that the six mobile operators had caused their consumers to suffer financial losses of more than Rp 2.87 trillion.
"We will meet with the KPPU to discuss its loss calculations. If consumers want to file for compensation, they should wait until a full study is completed," Basuki said.
However, several mobile providers, including Telkomsel and XL, will appeal against the ruling, "We will need to wait for a final verdict (after appeals) before we can make the study," he said.
Currently, Basuki said, his office was still drafting a policy that would further regulate text message services, particularly those provided to the public by content providers.
"In previous years, we considered SMS an additional feature, that's why we thought it wasn't necessary to regulate it.
"Now that SMS has become one of the main features of mobile communications, which contributes to more than 21 percent of operators' revenues, we need to regulate it," Basuki said.
He did not specify when the new regulation would be issued, but said his office had started discussing it last year and expected to finish soon.
Directorate General of Post and Telecommunication questions a figure stipulated by a business competition watchdog on consumers' losses caused by price-fixing on text message services (SMS) and will challenge it after a final verdict from court.
The statement follows the ruling of the Business Competition Supervisory Commission (KPPU) Wednesday naming six local mobile communication operators for price fixing, causing estimated consumer losses of Rp 2.8 trillion (US$302.4 million) between early 2004 and April 2008.
The operators are PT Excelcomindo Pratama (XL), PT Telekomunikasi Seluler (Telkomsel), PT Telekomunikasi Indonesia (Telkom), Bakrie Telecom, Mobile-8 Telecom and Smart Telecom.
Director general Basuki Yusuf Iskandar said the losses claimed by the KPPU were based on a basic network cost calculated by the Indonesian Regulatory Agency for Telecommunications (BRTI) in 2007, which could not be applied retrospectively.
The KPPU assumed text-message tariffs should not be higher than Rp 114, as the BRTI had set the SMS basic network cost at Rp 76 in June last year.
However, Basuki said, "The basic cost was based on the market conditions in 2007, not in the previous years."
He said the basic network cost might have been higher between 2004 and 2006, making SMS costs higher too.
He said that the basic network cost changed all the time, depending on costs of information technology devices and infrastructure.
For example, he said, "The basic network cost as of April this year is Rp 52, making SMS costs lower than before."
"That was why the basic cost of Rp 76 could not be applied for SMS rates before 2007," Basuki added.
He also emphasized that the cost was not a gross rate cost.
"The cost of Rp 76 was only the basic cost for the network system. Operators can set higher rates, as they must also consider their margins and costs of retail activities like market research," Basuki said.
Based on these arguments, Basuki said, more research was needed before the KPPU could really claim that the six mobile operators had caused their consumers to suffer financial losses of more than Rp 2.87 trillion.
"We will meet with the KPPU to discuss its loss calculations. If consumers want to file for compensation, they should wait until a full study is completed," Basuki said.
However, several mobile providers, including Telkomsel and XL, will appeal against the ruling, "We will need to wait for a final verdict (after appeals) before we can make the study," he said.
Currently, Basuki said, his office was still drafting a policy that would further regulate text message services, particularly those provided to the public by content providers.
"In previous years, we considered SMS an additional feature, that's why we thought it wasn't necessary to regulate it.
"Now that SMS has become one of the main features of mobile communications, which contributes to more than 21 percent of operators' revenues, we need to regulate it," Basuki said.
He did not specify when the new regulation would be issued, but said his office had started discussing it last year and expected to finish soon.
