Six mobile communications operators have been found guilty of cartel-like price fixing for text message services (SMS), causing consumers some Rp 2.8 trillion (US$302.4 million) in losses.

The six operators found guilty by the Business Competition Supervisory Commission (KPPU) are Excelcomindo Pratama (XL), PT Telekomunikasi Seluler (Telkomsel), PT Telekomunikasi Indonesia (Telkom), Bakrie Telecom, Mobile-8 Telecom and Smart Telecom.

"The six mobile providers were proven to hold arrangements among them to fix the prices of text messages at between Rp 250 and Rp 350 from the year 2004 until April 2008," head of the KPPU's panel of judges Dedie S. Matadisastra said.

No proof, however, was found on other parties under investigation by the competition watchdog: PT Indosat, Hutchison CP Telecommunications and Natrindo Telepon Seluler (Axis).

The KPPU ordered Telkomsel and XL to pay fines of Rp 25 billion each, while Telkom, Mobile-8 and Bakrie have to pay Rp 18 billion, Rp 5 billion and Rp 4 billion, respectively.

As for Smart Telecom, Dedie said, "no fine is being imposed on the provider, as it was only involved in the price fixing agreement in September 2007, during its commercial launching."

"Smart is the newest entrant among them, making its bargaining position the weakest."

XL and Telkomsel have been slapped with the biggest fines because while Telkomsel benefited the most from the practice, as it had the most customers, XL -- according to the probe -- was the most active firm in terms of ensuring other cartel members follow the agreement.

The KPPU said tariffs imposed by the operators were artificially high, adding that by its own calculation tariffs should not be higher than Rp 114 for one short message with 160 characters.

The KPPU carried out its preliminary investigations on the price fixing agreements among mobile telecommunications providers last year from Nov. 2 to Dec. 13, 2007. The commission continued its investigations until March 26, 2008.

According to the KPPU, in July 2007 the Indonesian Regulatory Agency for Telecommunications (BRTI) held a meeting with the Indonesian Cellular Telephones Association (ATSI), where ATSI members agreed to cancel all price fixing agreements among them.

However, "until now, none have imposed new text message tariffs, indicating that they are still under the cartel agreements," Dedie said.

Telkomsel lawyer Ignatius Andy denied any wrongdoing by his client.

"We will probably appeal. The text message tariffs imposed by Telkomsel are competitive and in fact benefiting our customers," he said.

XL lawyer Stefanus Harianto said he would talk with his client before making any further move.

"But there's a big possibility we will appeal," Stefanus said. (dia)

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