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Indosat wages a new battle for arbitration after latest IM2 verdict
Telecommunication giant PT Indosat will seek arbitration or file an appeal with the Supreme Court after the Jakarta High Court recently handed down a heavier sentence to the former boss of Indosatâs Internet service subsidiary
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T
elecommunication giant PT Indosat will seek arbitration or file an appeal with the Supreme Court after the Jakarta High Court recently handed down a heavier sentence to the former boss of Indosat's Internet service subsidiary.
The high court delivered a verdict over PT Indosat Mega Media's (IM2) appeal on Dec. 12 last year, sentencing former IM2 president director Indar Atmanto to eight years' imprisonment, according to media reports.
The latest verdict was higher than the original four-year sentence, which the Jakarta Corruption Court handed down on July 8 last year after finding him guilty of enriching the company by misusing Internet frequency licenses. The corruption court also demanded IM2 to reimburse state losses of Rp 1.35 trillion (US$110.82 million).
'We only heard about [the latest verdict] on the news,' said Indosat spokesman Adrian Prasanto on Monday.
'However, if it's true, we will definitely file an appeal with the Supreme Court; another possibility is that the parent company will seek arbitration.'
Indosat president director and CEO Alexander Rusli said in a written statement that the verdict was unfair and had been formulated without considering statements and testimony made by communication industry players, the Indonesian Telecommunications Regulatory Board (BRTI) and the Communications and Information Ministry.
The ministry reportedly sent a letter to the corruption court stating that IM2 had not infringed any laws in conducting its business as an Internet service provider (ISP).
The case highlights the country's lack of legal certainty, an issue that may hamper the industry from expanding amid high demand for faster Internet and data access.
The panel of judges found, based on a report from the Development Finance Comptroller (BPKP), that IM2 had caused state losses by using the frequency of Indosat, IM2's parent company, without paying the up-front fee.
Indosat argued that IM2 had paid it fees for utilizing part of the frequency that the mobile operator had obtained from the government to provide Internet services to customers.
Industry experts have repeatedly pointed out that not only was IM2 conducting its business legally but that also the business model used between IM2 and Indosat was common within the industry.
Indonesian Telematics Community (Mastel) chairman Setyanto P. Santosa said arbitration was an advisable strategy for Indosat.
Mastel is an association that hosts multiple telecommunications and technology groups, such as cell phone operators and ISPs.
'However, the case could have been resolved by now if Indosat had sought arbitration at the outset,' he said.
'Now, they have to file for another appeal and arbitration at the same time.'
