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Jakarta Post

KPPU investigates suspected cartel practices of XL Axiata, Indosat Ooredoo

News Desk (The Jakarta Post)
Jakarta
Wed, October 19, 2016

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KPPU investigates suspected cartel practices of XL Axiata, Indosat Ooredoo Expanding market -- A sales promotion girl shows new phone cards during the launch of 3G XL services by telecommunications provider XL Axiata in Manado, North Sulawesi, on Oct.3. (Antara/Adwit B. Pramono)

T

he Business Competition Supervisory Commission (KPPU) is carrying out a preliminary investigation into suspected cartel practices committed by telecommunications operators XL Axiata and Indosat Ooredoo, the commission’s top official said.

“We are still collecting information about it. Our focus is to question them about their motive for establishing a joint venture named One Indonesia Synergy,” KPPU head Syarkawi Rauf told The Jakarta Post on Tuesday.

The KPPU is of the opinion that the joint venture company, which was established to engage in infrastructure development, might be used for possible cartel practices. This is because both companies could work together in determining tariffs, dividing geographical areas for their products and coordinating to restrict the output of their products.

The antimonopoly agency is worried about such a situation because XL Axiata and Indosat Ooredoo should be in competition against each other.

On Tuesday, KPPU summoned XL Axiata representatives to its headquarters in Jakarta to get more information about the case. Indosat Ooredoo had answered its summons a day before.

Both companies have denied the allegations, claiming that the joint venture company is part of their cost efficiency efforts in the development of their 4G LTE network.

XL Axiata’s corporate communication general manager, Tri Wahyuningsih, claimed One Indonesia Synergy was not yet operational. “The company will start its operations in March 2017,” she said as quoted by Kompas.

Responding to the statement, Syarkawi said: “This is why we are telling them now that there is the potential for cartel practices if the joint venture comes to fruition.”

XL Axiata representatives who came to KPPU’s office on Tuesday declined to comment on the matter. (win/ebf)

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