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KPPU Monitors XL-Indosat Joint Venture

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24 October 2016 15:36 WIB

Business Competition Supervisory Commission (KPPU)

TEMPO.CO, Jakarta - The Business Competition Supervisory Commission (KPPU) is monitoring One Indonesia Synergy, a joint venture between mobile carrier giants XL Axiata (EXCL) and Indosat (ISAT). KPPU chair Rauf Syarkawi asked both companies not to misuse the presence of the JV as a way to play dirty.

"We aim to prevent cartels. Because it is possible that two competing firms join hands to build shared infrastructure," he told Tempo yesterday.

Last Tuesday, the anti-monopoly agency summoned XL and Indosat to clarify a report submitted by the People's Forum for Indonesian Telecommunications (FMPTI). The forum suspects XL and Indosat might use the joint venture to practice cartel. This is the third report about an alleged cartel by the telecommunications industry since August and September.

Syarkawi said the KPPU acknowledges that establishing infrastructure partnership could lead to business efficiency that ultimately benefits consumers through lower rates. He said the results of the meeting with Indosat and XL will be discussed, to decide whether or not further investigations are needed. 

XL and Indosat denied allegations that One Indonesia Synergy is used for cartel. XL's vice president corporate communication XL Turina Farouk said the establishment of the JV went through a process of consultations with the Investment Coordinating Board (BKPM), the Communications and Information Technology Ministry, as well as the Indonesian Telecommunications Regulatory Agency as regulators of the industry.

Turina also said XL has consulted with the KPPU in February, with the commission sending XL a letter containing the result of the consultation in March. "It says that the establishment of One Indonesia Synergy is not KPPU's legal object." 

The letter also contains KPPU's answer regarding network sharing that aims to boost efficiency and infrastructure development that will result in competitive tariffs.

"Based on the letter, we got a green light from the KPPU," Turina said.

XL and Indosat signed an agreement to establish One Indonesia Synergy in May. The joint venture has not started operating yet as there are still permits to obtain.

Indosat Ooredoo's group head of corporate communications Deva Rachman said the joint venture's formation was done properly and was given clearance from the Commission.

The FMPTI said that the establishment of One Indonesia Synergy is a violation to Law No.5/1999 on the prohibition of monopoly and unfair competition.

"The establishment of the company has the potential for cartel practices," the forum's chairman Rofiq Setyadi said.

PINGIT ARIA



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