Komisi Pengawas Persaingan Usaha

The Jakarta Post, Jakarta

A group representing some 100 lawyers has slammed the Business Competition Supervisory Commission’s recent ruling against Temasek Holdings and its subsidiaries, saying it was seriously flawed and would ultimately damage the interests of the Indonesian people.

Two weeks ago, the KPPU found that Temasek, along with eight other firms, mostly its subsidiaries, including Singapore Technologies Telemedia (STT) and Singapore Telecommunications (SingTel), had violated the Monopolies Law, which prohibits a company or business group from owning two or more firms with a combined market share of more than 50 percent in a particular sector.

Temasek owns 54.15 percent of SingTel Group, which in turn holds a 35 percent stake in Telkomsel, while STT, wholly owned by Temasek, owns 75 percent of Asia Mobile Holdings, which controls 41.9 percent of Indosat.

Telkomsel and Indosat are Indonesia’s largest and second largest telecoms firms, respectively, and jointly control about 80 percent of the mobile telephony market.

Temasek and STT have denied any wrongdoing and pledged to appeal to the Jakarta district court, a move that was supported on Sunday by the group, which calls itself the Union of People’s Lawyers (SPR).

Teguh Rahardjo, secretary-general of group, said that the KPPU decision was legally flawed as the commission had based its decision mainly on an “unfinished” study by a university institute.

Arief Poyono, chairman of the Federation of State Enterprise Labor Unions, who was also present at the event, echoed Teguh’s remarks.

Arief said the study, which he revealed was commissioned by PT APCO Indonesia, a public relations firm hired by the Indonesian unit of Russia’s Altimo Business Group, was only completed on May 7, but the KPPU had already issued a document making reference to the report on April 26.

Arief said that the ruling would hurt competition in the telecoms industry, and could in fact give rise to a duopoly situation.

“If the two biggest operators (Telkomsel and Indosat) are ordered to lower their tariffs, the other smaller operators will find it hard to compete. This will have an adverse impact on the overall industry.” (lln)

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