Page 147 - SAMENA Trends - June-August 2021

REGULATORY & POLICY UPDATES SAMENA TRENDS

pay their dues within 90 days, but failed to specify failing to fully recognize payments made. At a hearing
the amounts that the providers were required to pay. in September 2020 the Supreme Court ruled that
As such, the DoT scrambled to work out the cellcos’ cellcos would be permitted to pay the dues over a ten-
dues, with the providers submitting their own self- year period, but enshrined the DoT’s allegedly faulty
assessed calculations to speed up the process. The calculations as final, determining that the amounts
court rejected the self-assessed totals and ruled could not be recalculated or re-assessed. Consequently,
that the DoT’s calculations were final, despite a huge in its recent ruling the Supreme Court noted that it
disparity between the two sets of figures. Whilst it had had said ‘not just once, but twice and thrice that the
been expected that there would be some differences amounts cannot be recomputed’. No explanation or
in the calculations it was expected that these would reasoning was offered for the dismissal of the cellcos’
be fairly minor and easily reconciled – in submitting pleas, except that the Supreme Court had already ruled
its initial payment, for example, Airtel included an on the matter. Meanwhile, the Supreme Court did not
additional INR50 billion to cover such discrepancies. clarify its position on the other legacy of its September
The demands finally issued by the DoT were roughly 2020 decision. Whilst the ruling allowed providers to
double the self-assessed figures, though, and pay 10% of their dues up front and the remainder in
following subsequent analysis the cellcos claimed that annual instalments to 31 March 2031, it did not state
the DoT’s calculations were riddled with errors that whether the payments already made by the cellcos by
had massively inflated the final figure. For Airtel, its that date were to be taken into account. As such, the
self-assessed total was INR130.0 billion but the DoT’s providers have argued that they had already paid the
demand totaled INR439.8 billion, whilst for Vi the totals first 10% instalment and are not due to make another
were INR215.3 billion and INR584.0 billion, respectively, payment until March 2022, whilst the DoT has argued
and TTSL INR22.0 billion and INR168.0 billion. Notably, that they were required to pay 10% of the remaining
due to span of the dispute and the layers of additional dues by March 2021. The decision casts doubt on
payments (principal amount, interest, penalties and the viability of Vi to continue operating, with the debt-
interest on penalties), even comparatively small laden and loss-making cellco struggling to raise funds
mistakes in determining the providers’ unpaid fees to cover its immediate expenses. Whilst the company
resulted in a substantial increase in the final demand. is reportedly expected to be granted approval to raise
According to the providers, the DoT had made simple INR150 billion through foreign direct investment (FDI),
clerical errors in some places alongside mistakes in its it has payments totaling INR225 billion due by April
actual calculations, including counting some revenue 2022, including regular debt payments, spectrum fees
twice, not taking into account allowed exemptions and and AGR dues. (July 23, 2021) commsupdate.com

The Ministry of Communication and Information (MCI, the three lots of bandwidth offered – securing two –
KemKominfo) has launched refarming in the 2300MHz while Smartfren bid IDR176.5 billion to win the other
band as it looks to improve the quality of digital slot. As such, Telkomsel secured blocks A and C, while
cellular services through the more efficient use of Smart Telecom won block B. In addition to the above,
Indonesia spectrum in Indonesia. Confirming the plan, Minister of KemKominfo says the refarming exercise will also
Communication and Information Johnny G Plate was involve broadband wireless access (BWA) operator
quoted recently as saying: ‘Refarming of the 2.3GHz Berca Hardayaperkasa (trading as hinet), which is
radio frequency band is planned to take place nationally also a user of the 2.3GHz frequency band. IndoTelko
with the first step starting on Wednesday 14 July 2021 cites the minister as explaining: ‘It starts in a cluster
and will be completed in September 2021 at the latest’. that covers the Riau Islands and is planned to be
KemKominfo notes that the refarming process is being completed no later than September 2021 in a cluster
carried out in nine clusters under plans agreed with that covers the East Java area. Overall, there are a total
domestic operators, including Telekomunikasi Selular of nine clusters defined for the purposes of refarming
(Telkomsel) and Smart Telecom (Smartfren) which the 2.3GHz radio frequency band’. The minister went
won 2.3GHz spectrum earlier this year. As previously on to say that the refarming of the 2.3GHz band is
reported by TeleGeography’s CommsUpdate, back designed to support the optimal use of 4G services and
in April KemKominfo issued Press Release No. 133 also prepare the ground for the easy deployment of 5G
/ HM / KOMINFO / 04/2021 to announce the results technology. (July 19, 2021) commsupdate.com
of the 2.3GHz radiofrequency auction, completed
between 19 and 21 April 2021. The ministry’s tender The Ministry of Communications and Information
was to allocate frequencies in the range 2360MHz- Technology (MCI, or KemKominfo) has issued a second
2390MHz with a block size of 10MHz each. At the warning to Indonesian mobile operator Sampoerna
close of the process, MCI confirmed that Telkomsel Telekomunikasi Indonesia (STI, branded Net1) over its
bid IDR176.9 billion (USD12.2 million) per block on failure to pay overdue BHP frequency spectrum fees.

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