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Indonesian telco subsidiary fined for misusing 3G spectrum

Country's corruption court orders IM2, a subsidiary of PT Indosat, to pay US$131 million and sentences its former president director to a four-year jail term for misusing the 2.1GHz telecommunication frequency.
Written by Ellyne Phneah, Contributor
IM2 is ordered to pay US$131 million and its former president director faces a four-year prison sentence.

A subsidiary of Indonesian telco PT Indosat has been ordered by the country's corruption court to pay 1.3 trillion rupiah (US$131 million) in liable losses to the state. Its former executive also has been sentenced to a four-year prison term. 

The court on Monday ruled Internet service provider, Indosat Mega Media (IM2), guilty of misusing Internet frequency licenses, according to a report Monday by The Jarkata Post. The company also was told to pay for recurring losses caused by the misappropriation of the frequency within a year from the time of the court's ruling.

IM2's former president director, Indar Atmanto, also was found guilty of enriching the company by misusing the 2.1GHz frequency and ordered to pay 200 million rupiah (US$20,086)--in addition to his four-year jail sentence--or face another three months in prison.

Commenting on the current sentence, Indosat spokesperson Adrian Prasanto told The Jakarta Post the court "has not taken into account all the facts presented during the trial", including a letter from the Communications and Information Ministry stating the business model between Indosat and IM2 "is not against the law".

Allegations against IM2 were filed in 2011 by non-government organization, Indonesian Telecommunication Consumer (KTI), and the country's Attorney General's Office (AGO) took the case and launched its prosecution last year, the report noted. Both alleged IM2 had been operating illegally for failing to secure frequency licenses based on a regulation issued by the Communications and Information Ministry, barring telecommunication companies from handing over frequency allocations to other organizations.

Indosat had pointed out the regulation could not be used as the basis for prosecution as Indosat functions as a network provider, while IM2 is a service provider.

Indonesian Telecommuication Regulatory Body (BRTI) executive, Nonot Harsono, also pointed out IM2 was not required to secure additional licenses as parent company Indosat had already secured the required permits as a network provider.

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