DECREE OF THE MINISTER OF COMMUNICATION AND INFORMATION TECHNOLOGY NUMBER : 01/PER/M.KOMINFO/01/2010 PROVISION OF TELECOMMUNICATION NETWORK

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1 DECREE OF THE MINISTER OF COMMUNICATION AND INFORMATION TECHNOLOGY NUMBER : 01/PER/M.KOMINFO/01/2010 ON PROVISION OF TELECOMMUNICATION NETWORK BY THE GRACE OF GOD THE ALMIGHTY MINISTER OF COMMUNICATION AND INFORMATION TECHNOLOGY Considering: a. that the telecommunication network provision as regulated in the Decision of the Minister of Communication Number: KM 20 Year 2001 on Provision of Telecommunication Network as amended latest by the Decree of the Minister of Communication and Information Technology Number: 30/PER/M.KOMINFO/09/2008 is considered no longer in line with the development of telecommunication network provision and hence needs to be replaced; b. that based on consideration mentioned in point a above, there is a need to redefine the Decree of the Minister of Communication and Information Technology on Provision of Telecommunication Network.. Bearing in mind: 1. Law of the Republic of Indonesia Number 36 Year 1999 on Telecommunication (State Gazette of the Republic of Indonesia Number 154 Year 1999, Additional State Gazette of the Republic of Indonesia Number 3881); 2. Government Regulation of the Republic of Indonesia Number 52 Year 2000 on Provision of Telecommunication (State Gazette of the Republic of Indonesia Number 107 Year 2000, Additional State Gazette of the Republic of Indonesia Number 3980); 3. Government Regulation of the Republic of Indonesia Number 53 Year 2000 on Use of Radio Frequency Spectrum and Satellite Orbit (State Gazette of the Republic of Indonesia Number 108 Year 2000, Additional State Gazette of the Republic of Indonesia Number 3981);

2 2 4. Government Regulation of the Republic of Indonesia Number 7 Year 2009 on Types and Tariffs of the Kinds of Non-Tax State Income Applicable at the Department of Communication and Information Technology (State Gazette of the Republic of Indonesia Number 20 Year 2009, Additional State Gazette of the Republic of Indonesia Number 4974); 5. Decree of the President of the Republic of Indonesia Number 10 Year 2005 on Organizational Units and Functions of Echelon 1 of State Ministries of the Republic of Indonesia as amended by Presidential Decree Number 50 Year 2008; 6. Decree of the President of the Republic of Indonesia Number 47 Year 2009 on Formation and Organization of State Ministries; 7. Decision of the Minister of Communication Number KM 4 Year 2001 on Establisment of the National Fundamental Technical Plan 2000 of the Development of National Telecommunication as amended by the Decree of the Minister of Communication and Information Technology Number 3A/PER/M.Kominfo/04/2008; 8. Decision of the Minister of Communication Number KM 21 Year 2001 on Provision of Telecommunication Service as amended latest by the Decree of the Minister of Communication and Information Technology Number 31/PER/M.KOMINFO/09/2008; 9. Decree of the Minister of Communication and Information Technology Number 03/P/M.KOMINFO/5/2005 on Adjustment of Nomenclatures of a number of Decisions/Decrees of the Minister of Communication which regulate Special Material Contents in the field of Post and Telecommunication; 10. Decree of the Minister of Communication and Information Technology Number 13/P/M.KOMINFO/8/2005 on Provision of Telecommunication Using Satellite as amended by the Decree of the Minister of Communication and Information Technology Number: 37/P/M.KOMINFO/12/2006;

3 3 11. Decree of the Minister of Communication and Information Technology Number: 08/Per/M.KOMINFO/02/2006 on Interconnection; 12. Decree of the Minister of Communication and Information Technology Number: 03/PER/M.KOMINFO/1/2007 on Network Hiring; 13. Decree of the Minister of Communication and Information Technology Number 25/P/M.Kominfo/7/2008 on Organizational Structure and Working of the Department of Communication and Information Technology. DECIDES To redefine : DECREE OF THE MINISTER OF COMMUNICATION AND INFORMATION TECHNOLOGY ON PROVISION OF TELECOMMUNICATION NETWORK CHAPTER I GENERAL PROVISIONS Article 1 In this Ministerial Decree, what is meant by: 1. Telecommunication is any emission, transmission and or reception of any information in the form of signs, signals, writing, images, sounds, and intelligence by wire, optical, radio or other electromagnetic systems; 2. Telecommunication tool is any complementary instrument used in the conduct of telecommunication; 3. Telecommunication equipment is a group of telecommunication tools enabling the conduct of telecomunication; 4. Telecommunication network is a chain of telecommunication equipment and its accessories used in telecommunication; 5. Telelcommunication service is a service of telecommunication to fulfil the need of conducting telecommunication using telecommunication network;

4 4 6. Telecommunication provider is an individual, cooperative, regional government enteprise, state enterprise, private enterprise, government agencies, and state defense and security agency; 7. Telecommunication provision is an activity of supplying and providing telecommunication service enabling the implementation of telecommunication; 8. Telecommunication network provision is an activity of supplying and or providing telecommunication network service enabling the implementation of telecommunication; 9. Telecommunication provision for special purpose is a telecommunication provision whose characteristic, objective, and operation are special in nature; 10. Provision of fixed network is an activity of providing telecommunication network for fixed telecommunication service; 11. Provision of mobile network is an activity of providing telecommunication network for mobile telecommunication; 12. Provision of basic telephone service is a provision of telephone service using circuit-switched technology or other technology in the form of telephone, facsimile, telex, telegraph and data services; 13. Roaming is the capability owned by cellular mobile network enabling the user to still be able to use the service in the area that has not been served by a provider of cellular mobile network using network owned by other provider of cellular mobile network; 14. National roaming is a roaming conducted between two (2) cellular mobile network providers with the national coverage; 15. Provision of closed fixed network is a provision of network that supplies hiring network; 16. Interconnection is a linkage between telecommunication networks of different telecommunication providers;

5 5 17. An operation-worthy test is a technical test conducted by an accredited institute or a team formed by the Director General with the task of implementing the process of testing system technically and operationally; 18. An Institute of operation-worthy test is one that has the authority to conduct operation-worthy test and has obtained accreditation from an institute that has the authority in providing accreditation; 19. The universal service obligation is the obligation imposed on telecommunication network provider and or telecommunication service provider to provide accessibility to an area or to a part of the community that has not been reached by telecommunication network or service provision; 20. The technical basic plan is technical provisions that have to be complied with in developing and providing telecommnication network so that the connection of one network to the other is guaranteed; 21. Landing right is the right granted by the Minister to a telecommunication network provider, to a telecommunication service provider, or to a subscriber broadcasting institute within the framework of cooperation with a foreign telecommunication provider; 22. Minister is the Minister whose scope of tasks and responsibilities is in the field of telecommunication; 23. Director General is the Director General of Post and Telecommunication; 24. Directorate General is the Directorate General of Post and Telecommunication. CHAPTER II PROVISION OF TELECOMMUNICATION NETWORK Article 2 (1) The provision of telecommunication network may be carried out by a legal body established for that purpose based on the prevailing regulations, i.e.:

6 6 a. State Enterprise; b. Regional Government Enterprise; c. Private Enterprise; or d. Cooperative. (2) For the telecommunication network provision mentioned in paragraph (1), a license shall be obtained. Article 3 (1) The telecommunication network provision referred to in Article 2 consists of : a. fixed network provision; b. mobile network provision. (2)The provision of fixed network referred to in paragraph (1) point a, consists of: a. provision of local fixed network; b. provision of long distance fixed network; c. provision of international fixed network; d. provision of closed fixed network. (3) The provision of mobile network referred to in paragraph (1) point b is differentiated in: a. the provision of terrestrial mobile network; b. the provision of cellular mobile network; c. the provision of satellite mobile network. Article 4 (1) The provision of telecommunication network which is in need of an allocation of certain radio frequency spectrum and/or in need of network access code, the number of providers is limited. (2) The provision of telecommunication network whose number of providers is limited as mentioned in paragraph (1), the procedure of its licensing is undertaken through selection process. (3) The provision of selection process referred to in paragraph (2) is not applicable for the provision of telecommunication network provided by providers of telecommunication

7 7 network that already own a license for the use of network access code and intend to provide other kind of teleccommunication network provision: a. whch is different from the kind of telecommunication network provision that they have provided; b. using an allocation of radio frequency spectrum in compliance with the license for using radio frequency spectrum that they already own; and c. that needs a new network access code. (4) The procedure of licensing for the provision of telecommunication network referred to in paragraph (3) is done through evaluation process. Article 5 (1) The provision of telecommunication network that does not need an allocation of certain radio frequency spectrum and/or does not need network access code, the number of providers is not limited. (2) The provision of telecommunication network whose number of providers is not limited, the procedure of its licensing is done through evaluation process. Article 6 (1) In providing telecommunication network referred to Article 3 paragraphs (2) and (3), providers of telecommunication network shall develop and/or make available telecommunication network. (2) Telecommunication network providers in developing and/or making available telecommunication network referred to in paragrah (1) shall follow the technical provision in the technical basic plan as determined by the Minister. Article 7 Providers of telecommunication network shall: a. make available all the telecommunication facilities to ensure the telecommunication network service in line with the service quality standard;

8 8 b. provide equal service to telecommunication network users; c. draw up provisions and conditions for the subscription of telecommunication network; d. announce openly the availability of telecommuncation networks owned by them. Article 8 (1) Providers of telecommunication network shall ensure the provision of telecommunication through the network provided by them. (2) Providers of telecommunication network shall unbundle the components of their service within the framework of providing service needed by telecommuncation providers. (3) The components referred to in paragraph (2) are in the form of: a. local network; b. interface equipment; c. exchange (connection centre); d. transmission; and e. supporting system for operation, service and additional device. Article 9 (1) Any provider of telecommunication network shall implement the universal service obligation in the form of contribution for the universal service obligation. (2) The procedure for implementing the universal service obligation referred to in paragraph (1) is regulated in a separate Ministerial Decree. Article 10 (1) Any provider of telecommunication network shall pay charges for the right to provide telecommunication which form the Non-Tax State Income (PNBP). (2) The procedure for the payment of charges for the right to provide telecommunation referred to in paragraph (1) is done based on the prevailing regulations.

9 9 Article 11 (1) Any provider of telecommunication network using radio frequency spectrum and satellite orbit shall pay charges for the right to use radio frequency spectrum and charges for the right to use satellite orbit which form the Non-Tax State Income (PNBP). (2) The procedure for the payment of charges for the right to use radio frequency spectrum and satellite orbit referred to in paragraph (1) is done based on the prevailing regulations. Article 12 (1) Any provider of telecommunication network shall ensure the availability of interconnection. (2) Any provider of telecommunication network is entitled to obtain interconnection from other network providers, (3) The implementation of interconnection referred to in paragraphs (1) and (2) shall follow the provision in the technical basic plan as determined by the Minister. Article 13 The availability of interconnection as mentioned in Article 12 must at least comply with the principles of a. tranparency; b. non discrimination both in quality and in charges; c. provision at the shortest possible time; d. cost based orientation; e. demand basis. Article 14 (1) Interconnection between telecommunication networks is carried out at interconnection point. (2) The interconnection point referred to in paragraph (1) is a point of the limit of responsibility of telecommunication network management.

10 10 (3) The defining of interconnection point is regulated separately in the provision of technical basic plan determined by the Minister. Article 15 If in the implementation of interconnection the need arises for charges and/or interface equipment, the provision of said charges and/or equipment becomes the responsibility of the network provider that needs them. Article 16 The Director General fixes the numbering including access code number of telecommunication network provision based on the provision of technical basic plan determined by the Minister. Article 17 (1) Any provider of telecommunication network shall instal the signs of the existence of telecommunication network. (2) The procedure for installing signs of the existence of the network as mentioned in paragraph (1) is determined in the Decree of the Director General. Article 18 The telecommunication tool and/or equipment used by the provider of telecommunicatio network shall fulfil the technical requirements determined by and possesses certificate from the Director General. CHAPTER III PROVISION OF FIXED NETWORK Part One Provision of Local Fixed Network

11 11 Article 19 The provision of local fixed network is differentiated in the provision of circuit-switched based local fixed network and the provision of packet-switched based local fixed network Article 20 (1) The provider of circuit-switched based local fixed network shall develop and/or make available circuit-switched based local fixed network and network for accessing customers in a location using one (1) or more local exchanges. (2) The location referred to in paragraph (1) covers one or a number of district and/or municipality areas determined by the Minister on the proposal of the Director General. (3) Each location referred to in paragraph (1) obtains area code fixed by the Director General based on technical basic plan determined by the Minister. Article 21 Providers of circuit-switched based local fixed network may develop and/or make available packet-switched based local fixed network Article 22 (1) Providers of circuit-switched based local fixed network or other technology provide basic telephone service for local connection. (2) Providers of circuit-switched based local fixed network or other technology may rent out their network to providers of local connection basic telephone service, to providers of long distance connection basic telephone service, and providers of international connection basic telephone service in the form of hiring circuit. (3) Providers of circuit-switched based local fixed network may provide local hiring-circuit.

12 12 Article 23 (1) Providers of circuit-switched based local fixed network shall provide public telephone access. (2) The public telephone access referred to in paragraph (1) must at least equal to 3% of installed network capacity. Article 24 (1) Providers of circuit-switched based local fixed network may provide cross-border telecommunication network and service connecting directly two locations in two neighbouring countries having common border. (2) The provision of cross-border telecommunication network and service referred to in paragraph (1) is applicable in the location that has social and economic interest relationship. (3) The provision of cross-border telecommunication network and service is determined in the locations of: a. Nunukan Tawao; b. Manado Davao; c. Jayapyura Lae. (4) The cross-border telecommunication locations other than those mentioned in paragraph (3) are further determined by the Decree of the Director General taking into account bilateral agreements. Article 25 (1) Providers of packet-switched based local fixed network shall develop and/or provide transport network connecting central node and customer access network connected to the central node.. (2) The area of the provision of packet-switched based local fixed network covers local and national areas. Article 26 (1) Providers of packet-switched based local fixed network may provide multimedia services.

13 13 (2) In providing multimedia services referred to in paragraph (1), providers must obtain license from the Director General. (3) Providers of packet-switched based local fixed network may rent out their networks to providers of telecommunication network, to providers of telecommunication service, and/or to subscriber broadcasting institute. Part Two Provision of Long Distance Direct Dialing Fixed Network Article 27 The provision of long distance direct dialing fixed anetwork shall develop and/or make available fixed network for interconnecting local fixed network providers. Article 28 Providers of long distance direct dialing fixed network shall develop and/or make available trunk exchange and network interconnecting trunk exchanges. Article 29 (1) Providers of long distance direct dialing fixed network provide basic telephone service for long distance direct dialing. (2) Providers of long distance direct dialing fixed network may rent out their networks to providers of long distance direct dialing basic telephone service and to providers of international connection basic telephone service in the form of hiring-circuit. (3) Providers of long distance direct dialing fixed network may provide long distance hiring-circuit.

14 14 Part Three Provision of International Connection Fixed Network Article 30 Providers of international connection fixed network shall develop and/or make available fixed network for connecting domestic network with international network. Article 31 (1) Providers of international connection fixed network shall construct and/or make available international gateway exchange and network interconnecting international gatewy exchanges. (2) Providers of international connection fixed network shall connect their own international gateway exchange. Article 32 (1) Providers of international connection fixed network provide basic telephone service for international connection. (2) Providers of international connection fixed nework may rent out their networks to providers of international connection basic telephone service in the form of hiring-circuit. (3) Providers of international connection fixed network may provide international hiring-circuit. Part Four Provision of Closed Fixed Network Article 33 (1) Providers of closed fixed network shall develop a network for rent. (2) The use of rented network by providers of telecommunication network and/or providers of telecommunication service must comply with the purpose for which the network is rented.

15 15 (3) The use of rented network by providers of special telecommunication and by users that are not providers of telecommunication must be in accordance with their own need. (4) The use of network for their own need referred to in paragraph (3) is the use of network by closed user group. Article 34 Providers of closed fixed network that make available network for telecommunication provision are prohibited to connect the network to other networks. Article 35 (1) Providers of closed fixed network may rent out their network to users located outside the territory of the Republic of Indonesia. (2) Foreign providers of closed fixed network may rent out their network to Indonesian providers of telecommunication and/or to non providers of telecommunication. (3) Foreign providers of closed fixed network that rent out network to non providers of telecommunication in the territory of the Republic of Indonesia, shall cooperate with the Indonesian providers of closed fixed network. CHAPTER IV PROVISION OF MOBILE NETWORK Part One Provision of Terrestrial Mobile Network Article 36 Providers of terrestrial mobile network shall develop and/or make available terrestrial mobile network to access customers in one or more locations.

16 16 Article 37 (1) Provision of terrestrial mobile network consists of: a. provision of radio trunking terrestrial mobile network; b. provision of radio call terrestrial mobile network for the general public. (2) Provision of terrestrial mobile network other than those mentioned in paragraph (1) is determined by the Director General. Article 38 Provision of radio trunking terrestrial mobile network is carried out with the coverage of: a. district or municipality; b. a number of districts or municipalities. Article 39 The radio trunking terestrial mobile network with the coverage of a number of districts and municipalities may not be connected to one another. Article 40 Providers of radio trunking terrestrial mobile network shall develop and/or make available radio trunking terrestrial mobile network. Article 41 (1) The radio trunking terrestrial mobile network may be connected to other telecommunication networks. (2) The implementation of the connection to other telecommunication networks referred to in paragraph (1) shall folllow the technical provision in the technical basic plan determined by the Minister. (3) In the event that the radio trunking terrestrial mobile network is connected to other telecommunication networks, the stipulations as contained in the cellular mobile telecommunication network provision are applicable.

17 17 Article 42 The provision of radio trunking terrestrial mobile network must use radio frequency spectrum the allocation of which is determined by the Director General. Article 43 (1) Customers of radio trunking terrestrial mobile network may provide themselves with radio trunking terminals. (2) In the event that customers are not able to provide themselves with the terminals, providers of radio trunking terrestrial mobile network shall provide radio trunking terminals for their customers Article 44 (1) Provision of radio call terrestrial mobile network for the general public is caried out with the coverage of: a. district or municipality; b. a number of districts or municipalities. (2) The radio call terestrial mobile network for the general public with the coverage of a number of districts and/or municipalities referred to in paragraph (1) point b shall be connected to one another. Article 45 Providers of radio call terrestrial mobile network for the general public shall: a. provide receivers that function well to be used by customers; b. send a message or call to the entitled customers; c. ensure the security of the message or news (information). Part Two Provision of Cellular Mobile Network

18 18 Article 46 Providers of cellular mobile network shall develop and/or make available cellular mobile network to access customers. Article 47 Providers of cellular mobile network are differentiated into: a. providers of cellular mobile network with the coverage of a province or a number of provinces; b. providers of cellular mobile network with the national coverage. Article 48 (1) Providers of cellular mobile network shall develop and/or make available cellular mobile networks that interconnect in the region (area) of their coverage. (2) The development and the making available networks referred to in paragraph (1) may be implemented gradually. Article 49 Providers of cellular mobile network may rent out their networks to other cellular mobile network providers. Article 50 (1) Providers of cellular mobile network with the coverage of a province or a number of provinces shall implement roaming with other providers of cellular mobile network with the coverage of a province or a number of other provinces that own the same system and radio frequency spectrum. (2) The roaming referred to in paragraph (1) is implemented based on cooperation with other providers of cellular mobile network incorporated in a written agreement. Article 51 (1) Providers of cellular mobile network may implement national roaming with other providers of cellular mobile network.

19 19 (2) The national roaming referred to in paragraph (1) is implemented based on cooperation with other providers of cellular mobile network incorporated in a written agreement. (3) The national roaming referred to in paragraph (1) may only be implemented until the availability of service to users by utilizing the network owned by providers of cellular mobile network themselves. Article 52 (1) Providers of cellular mobile network that cooperate in the national roaming shall : a. carry out all the obligations incorporated in the license owned by them for the provision of cellular mobile network, including but not limited to the fulfilment of the obligations for developing means and infrastructure and service quality standard; b. submit a plan for the implementation of national roaming to the Director General; c. submit an annual report on the implementation of national roaming to the Director General that covers at least: - roaming areas; -.kinds of services. (2) The implementation of cooperation in roaming is evaluated periodically by the Director General Article 53 (1) Providers of cellular mobile network may implement international roaming. (2) The international roaming referred to in paragraph (1) is implemented based on cooperation with providers of cellular mobile network of other countries. Article 54 Providers of cellular mobile network shall have standard service facilities at least: a. handing over of automatic cells;

20 20 b. roaming; c. anti fraud facility; d. detail billing; e. interconnection capability; and f. supervision and control. Part Three Provision of Satellite Mobile Network Article 55 Providers of satellite mobile network shall develop and/or make available satellite mobile network to access customers. Article 56 (1) Providers of satellite mobile network shall develop and/or make available satellite, earth station, gateway exchange, and connecting network. (2) Providers of satellite mobile network may use foreign satellite and shall own landing right. Article 57 (1) Providers of satellite mobile network provide basic telephone service and may provide multimedia services. (2) In providing multimedia services referred to in paragraph (1), providers of satellite mobile network shall obtain permission from the Director General. (3) Providers of satellite mobile network may rent out their networks to providers of basic telephone service and to providers of multimedia services. Article 58 (1) Providers of satellite mobile network designed specially for providing multimedia services may provide basic telephone service. (2) In providing basic telephone service referred to in paragraph (1), providers of satellite mobile network must

21 21 follow the stipulations for the provision of basic telephone service. Article 59 (1) In the event that providers of global satellite mobile network provide basic telephone service in the territory of the Reublic of Indonesia, they shall cooperate with Indonesian legal bodies which own a license for the provision of basic telephone service. (2) In the event that providers of global satellite mobile network provide multimedia service in the territory of the Republic of Indonesia, they shall cooperate with the Indonesian legal body which owns licenses for the provision of multimdia services. (3) Providers of basic telephone service or multimedia services referred to in paragraphs (1) and (2) shall own landing rights. Article 60 (1) A mobile terminal used for the provision of basic telephone service as stated in Article 59 paragraph (1) is provided by an agent or by the concerned provider of satellite mobile network. (2) An agent as stated in paragraph (1) is a national company appointed by the terminal factory. CHAPTER V PROCEDURE FOR LICENSING Part One Procedure for Selection of Telecommunication Network Provision Article 61` (1) The Minister decides a limited number of telecommunication network providers. (2) The decision referred to in paragraph (1) is taken at least one (1) time every year.

22 22 (3) The decision mentioned in paragraph (1) is taken based on consideration of resources and market conditions. Article 62 (1) The Minister announces openly the business opportunity to ;provide telecommunication network. (2) The announcement referred to in paragraph (1) for every kind of telecommunication network provision is done at least one (1) time in one (1) year. (3) The provision as stated in paragraph (1) is not applicable for telecommunication provision referred to in Article 4 paragraph (3) and for the provision of closed fixed network that do not use radio frequency spectrum. Article 63 The announcement of the business opportunity to provide telecommunication network contains the followings: a. kinds of provision; b. number of providers; c. location and coverage of provision; d. requirements and the procedure for license application; e. place and time of submission of license application; f. charges to be paid, among other things, charges of final selection document and bank guarantee; g. selection criteria and evaluation to determine the candidate providers of telecommunication. Article 64 (1) The Director General forms a Selection Team to carry out selection comprising technical, business, legal, planning and administration elements. (2) The Selection Team referred to in paragraph (1) carries out selection based on selection criteria announced openly to selection participants. (3) The Selection Team has to finalize its tasks at the latest forty (40) work days since the deadline of receiving applications of candidate providers.

23 23 (4) Selection is carried out in a transparent, objective, honest, and fair manner. Article 65 (1) The Selection Team follows the guidance of selection document in assessing application document. (2) The selection document referred to in paragraph (1) consists of: a. admiistrative selection document; b. technical selection document. (3) The administrative selection document referred to in paragraph (2) point a contains the followings: a. Deed of establishment of the Company; b. Approval of the Company s establishment; c. Company profile; d. Tax-payer s number; e. Company s capital structure; f. Ability to pay all the charges that have to be paid; g. Proof of bank guarantee; h. Date and time of the deadline for handing over the document. (4) The technical selection document referred to in paragraph (2) point b contains the followings: a. business plan; b. work plan and ability to develop and/or make available network; c. technical data and network configuration; d. ability to use equipment that fulfils technical requirements; e. filling in the application (form?) for the determination of radio frequency spectrum from the Directorate General for the provision of telecommunication network using radio frequency spectrum and/or satellite orbit; f. date of the deadline for handing over the document.

24 24 Article 66 (1) The Selection Team finalizes the administrative selection at the latest ten (10) work days after the deadline for handing over administrative selection document. (2) The Selection Team finalizes the technical selection at the latest thirty (30) work days after the deadline for handing over technical selection document. (3) Participants of technical selection are those declared to pass administrative selection announced openly. (4) The decision of candidate providers is based on serial numbering of the best score of selection result from Selection Team and informed in writing to the applicants/selection participants. Part Two Procedure for Evaluation of Telecommunication Network Provision Article 67 (1) Application for license in principle of telecommunication network provision referred to in Article 4 paragraph (3) and the provision of telecommunication network whose number of providers is not limited may be submitted any time and the process of licensing is done through evaluation. (2) Application for license in principle referred to in paragraph (1) is submitted to the Minister. (3) Evaluation on the application referred to in paragraph (1) is conducted by the Director General. Article 68 (1) Application for license in principle of telecommunication network provision whose number of providers is not limited as stated in Article 67 paragraph (1) must be furnished with the following required items: a. deed of establishment of the Company including its approval from authorized agency;

25 25 b. amendment to the deed of establishment including its approval or letter of acceptance of the report from authorized agency; c. tax-payer s number; d. a declaration letter of domicile; e. business plan containing: 1. kind of service in accordance with the applied provision; 2. coverage of development and service area to be developed (roll out plan) which forms a commitment for five (5) years; f. a letter declaring ownership of funds and bank, at least 5% of the total investment for developing telecommunication means and infrastructure for the period of five (5) years as indicated in the roll out plan. g. technical data comprising: 1. system configuration and network technology to be developed; 2. diagram, route and network map; 3. radio frequency spectrum proposed in the event that the candidate provider of telecommunication network intends to use radio frequency spectrum; h. a written statement that technical data, tool/equipment, telecommunication means and/or infrastructure to be developed in accordance with the technical requirements, configuration and telecommunication network hierarchy based on technical basic plan; i. the existing Company shall enclose a letter declaring that there is no tax owed (tax clearance) from Tax Office; j. a written statement/report on composition of share ownership of the Company direct up to two (2) levels of the applicant Company, including countries of origin of shareholders; k. a written statement that there will be no change in the composition of share ownership of the Company during the validity of the license in principle. l. a written statement that there will be no change in the composition of share ownership of the Company after obtaining the license for the telecommunication provision before fulfilling the obligation of the development at least fifty percent (50 %) of the total obligation of the development during five (5) year period as indicated in the license for telecommunication provision;

26 26 m. a declaration letter that there is no affiliation with other companies (at the level of President Director). (2) The requirements referred to in paragraph (1) point j and point k are not applicable for open (public) companies whose transactions in the changes of their shares are executed through domestic stock exchange. (3) In the event that the requirements of the application for a license in principle for the provision of telecommunication network referred to in paragraph (1) are not complete, the application is considered null and the applicant may submit a new application. Article 69 (1) The finalization of the evaluation on application mentioned in Article 68 must be done at the latest sixty (60) calendar days counting from the receipt of the complete application. (2) In the event that the application does not comply with the stipulated requirements, the Minister provides his refusal in writing by giving the reasons for the refusal. (3) If within the period of sixty (60) calendar days referred to in paragraph (1) there is no decision on granting the license in principle or no refusal thereto, the application for the license in principle is considered approved. Part Three Procedure for Licensing the Provision of Telecomunication Network Article 70 (1) Based on selection result referred to in Article 66 paragraph (4) or based on evaluation result referred to in Article 69 paragraph (1), the Minister grants license in principle for the applicants that fulfil the requirements. (2) The license in principle as stated in paragraph (1) is valid at most: a. three (3) years for the provision whose number of providers is limited;

27 27 b. two (2) years for the provision whose number of providers is not limited (3) The license in principle referred to in paragraph (2) may be extended if the owner has made investment in the preparation of developing means and infrastructure in line with the evaluation result of the Team formed by the Director General. (4) The license in principle may be extended one (1) time with the maximum period of validity of one (1) year for the provision of network whose number of providers is limited, and six (6) months for the number of providers is not limited (5) In the event that the application for extension of the license in principle referred to in paragraph (3) is not decided within the period of fourteen (14) work days since the receipt of the application for extension of the license in principle, the license in principle is considered extended. Article 71 (1) The owner of the license in principle is prohibited to change the composition of the Company s share ownership. (2) The prohibition of the change as stated in paragraph (1) is not applicable for open (public) Company. Article 72 (1) The holder of the license for provision is prohibited to change the composition of the Company s share ownership except if the holder has fulfilled the obligation of development at least fifty percent (50 %) of the total obligation of development for five (5) years. (2) In case the holder of the license for provision intends to change the composition of the Company s share ownership, the plan for such change shall be reported to the Minister. (3) The prohibition for the change as stated in paragraph (1) is not applicable for open (public) Company whose

28 28 transactions in the change of its shares are executed through domestic stock exchange..article 73 (1) The license for the provision of telecommunication network is issued after the owner of license in pinciple is declared to pass the operation-worthy test and submits application for the permission of the provision. (2) The licence for the provision of telecommunication network referred to in paragraph (1) is issued at the latest fourteen (14) work days after the issuance of a declaration letter of operation-worthy. Article 74 (1) The license for the provision of telecommunication network is granted timelessly and an overall evaluation is conducted every five (5) years. (2) If the result of evaluation referred to in paragraph (1) is declared not fulfilling the provision in the licensing, the owner of the license of the provision is given sanctions in accordance with the prevailing regulations. CHAPTER VI PROCECURE FOR IMPLEMENTING OPERATION-WORTHY TEST Article 75 (1) The owner of the license in principle referred to in Article 70 that is ready to provide telecommunication network shall submit an application for operation-worthy test to the Director General. (2) The application for operation-worthy test mentioned in paragraph (1) is submitted at most thirty (30) work days before the license in principle ends. (3) The application for operation-worthy test and license for the provision mentioned in paragraph (1) is submitted in writing by enclosing the followings:

29 29 a. copy of the license in principle; b. location/digital map of infrastructure of development result that is to be operation-worthy tested in line with the license in principle; c. technical specifications of telecommunication equipment already developed; d. list of telecommunication equipment; e. copies of certificates of telecommunication tools and equipment used. Article 76 (1) The operation-worthy test is implemented by an operationworthy test institute that has obtained accreditation from authorized institute. (2) In the event that the operation-worthy test has not been implemented yet by the institute referred to in paragraph (1), the Director General may form an Operation-Worthy Test Team. Article 77 (1) The operation-worthy test is implemented at the latest fourteen (14) work days since the receipt of the application for operation-worthy test. (2) For the means and infrastructure declared to be operationworthy tested based on the implementation of operationworthy test evaluation, the Director General issues an operation-worthy declaration letter. (3) An operation-worthy declaration letter mentioned in paragraph (2) is issued at the latest fourteen (14) work days counting from the receipt of the evaluation result of operation-worthy test implementation. (4) In the event that the implementation of operation-worthy test has not been done within the period of fourteen (14) work days since the receipt of the application for operationworthy test, the owner of the license in principle referred to in Article 70 is entitled to obtain an operation-worthy declaration letter.

30 30 Article 78 (1) The institute or Team referred to in Article 76 must, within the maximum period of fourteen (14) work days, finalize the evaluation of the result of implementation of operationworthy test since the receipt of complete application. (2) The evaluation result mentioned in paragraph (1) is reported in writing to the Director General within the maximum period of fourteen (14) work days. Article 79 (1) If the evaluation result of the implementatioin of operationworthy test of the means and infrastructure of telecommunication network declares that they are not operation-worthy, the owner of the license in principle is given the opportunity to improve the means and infrastructure at the latest within thirty (30) work days. (2) If the opportunity for the improvement within the period referred to in paragraph (1) still does not show yet that the means and infrastructure are operation-worthy, the owner of the license in principle is given the opportunity to improve the means and infrastructure at the latest within fourteen (14) work days. Article 80 In the event that the evaluation result of the implementation of operation-worthy test on the improvement of the means and infrastructure as stated in Article 79 paragraph (2) is still declares that they are not operation-worthy, the owner of the license in principle shall change or replace the system, means and infrastructure of the elecommunication network. Article 81 (1) In the event that there is no other consideration that needs to be taken into account, the Minister issues a license of provision at at the latest within fourteen (14) work days since the issuance of declaration letter on operationworthy.

31 31 (2) The consideration mentioned in paragraph (1) includes but not limited to the existence of complaint from the community and the suspect of the existence of violation against the provision of the prevailing regulations. Article 82 (1) Every addition of capacity and expansion of location or reallocation (relocation?) that undergo technological change shall be operation-worthy tested. (2) The technological change mentioned in paragraph (1) covers: a. change of technological standard used based on international standard from International Telecommunication Union/ITU; b. change of the use of radio frequency spectrum, and/or c. change of the use of system from analog to digital. (3) The obligation for operation-worthy test is not applicable to every addition of capacity and to the expansion of location or relocation that do not undergo technological change. CHAPTER VII TARIFFS Article 83 The provision of tariffs for the telecommunication network provision is regulated in a separate Ministerial Decree. Article 84 Charges for interconnection between telecommunication networks are regulated in a separate Ministerial Decree. CHAPTER VIII OTHER PROVISIONS

32 32 Article 85 (1) Means and infrastructure that may be used for telecommunication purposes that were in the possession of legal body non-provider of telecommunication before the redefining of this Ministerial Decree, may be made use of by provider of telecommunication network based on cooperation. (2) The cooperation mentioned in paragraph (1) is in the form of management cooperation that contains at least the provision that: a. the management cooperation is exclusive in nature; b. the management cooperation is without payment levied.. (3) The cooperation referred to in paragraph (2) shall be reported to the Minister before being implemented. CHAPTER IX SUPERVISION AND CONTROL Article 86 The Director General conducts supervision and control on the implementation of this Ministerial Decree. CHAPTER X FINAL PROVISIONS Article 87 By the coming into force of this Ministerial Decree, the Decision of the Minister of Communication Number KM. 20 Year 2001 on Provision of Telecommunication Network with all its amendments is hereby abrogated.

33 33 Article 88 This Ministerial Decree shall come into force on the date of its redefining. In order to make known to every body, this Ministerial Decree is to be promulgated in the State Announcement of the Republic of Indonesia. Done at: JAKARTA On : January 25, 2010 MINISTER OF COMMUNICATION AND INFORMATION TECHNOLOGY, Signed TIFATUL SEMBIRING