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How to Obtain, Telecommunication Service Provider Licence / Content Provider Licence in Indonesia

Telecommunication Service Provider Licence

Obtaining a Telecommunication Service Provider Licence in Indonesia

The telecommunication industry has played an important role in the development of Indonesia’s economy over the last few years.

Not only has it increased connectivity across the country, it has also helped in stimulating other sectors of the economy like banking, finance, software, hospitality and trade. The telecommunication sector in Indonesia comprises several segments, namely mobile cellular services, fixed line services, internet and broadband services, and network infrastructure services.

As of 2013, Indonesia was the world’s third largest telecommunication market in terms of mobile cellular subscribers, after China and India.

2014 was a tough year for the industry because of lower subscriber growth, fall in voice average revenue per user (ARPU) and forex losses. It was also a year of industry consolidation accompanied by retreat of CDMA operators.

Data, internet and broadband services accounted for a substantial portion of operators’ revenue in the year. 2015 looks to be more promising with estimated industry growth of around 7-8%, according to the Ministry of Communication and Information Technology. Going forward, Indonesia’s young population and rising per capital income, coupled with an increase in smartphone penetration and data speeds, will add to the growth of this sector

As the market’s rapidly growing, Foreign investors are now more attracted to pursue the big opportunity in Indonesian Telco and Internet sectors. Many investors are establishing a Telco and Internet Service provider company. To be able to establish a Telecommunication and Internet service Provider Company. Investors need to apply for Telecommunication Service Provider Licence / Content Provider Licence issued by Ministry of Telecommunication and Informations. Before you are able to apply this licence, if you are PMA you will need firstly to spend US$ 1,000,000 investment in Indonesia and eligible for Permanent Business Licence.

And here are the detail process and procedures to obtain the Licence, general description :

A) Coverage of Telecomunication Service Licence

1)      Basic Telephony Service

2)      Added-value Telephony Service

a)      Premium Call

b)      Phone Card

c)       Call Center

3)      Multimedia Service

a)      Internet Service Provider

b)      Network Access Point

c)       Public Internet Phone Service

d)      Data Communication System Service

e)      Content Provider Service

 

B) Procedures to Obtain the Licence

1)        Principle Licence is a licence issued to bring opportunity towards the provider to create and prepare the necessary facility/hardware in certain time frame according to category of telecommunication organizing

2)        Operational Eligibility Examination/Uji Laik Operasi (ULO) is a technical examination which conducted by an accredited agency or team formed by Directorate General with main purpose to conduct system examination process both technically and operationally

3)        Licence of Conduct (Modern Licensing) is the final licence issued after the holder of principle licence passed the Operational Eligibility Examination. This licence is in form of contract which consist rights, obligation, sanctions and report of conduct. Licence will be evaluated every 5 years

 

 C) Timeline

  • Time Frame             : 6 Months
  • Notes

o   From the time frame above, 2 months required to obtain Principle License and another 4 months for testing and examination until CP License is approved

o   During the Operational Eligibility Examination/Uji Laik Operasi (ULO) process this will be between Investor and Kominfo only since this is a technical steps of the application.

o   The fee excludes Telecomunication Company Obligation fee and Contribution KPU/USO to Goverment for 1.75% of gross revenue

Cekindo are ready to assist our clients to obtain Telecommunication Service Licence from the Ministry of Telecommunication and Information to support our clients reaching their goals in Indonesia.

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