The regulatory history has four phases, the first which was from 1964 to the 1989. PTT was established in 1964, this was a forerunner of DGPT. In 1985 DGPT gave operating licenses and were removed from the government budget. The second phase was from 1989 to 1999. The new Act of Telecom was established in 1989 that established DGPT as the policy maker and regulator. A new international operator (Satelindo) entered the market in 1993. In 1994 GSM licenses for Telkonsel and Indosat and two years later a private operator was granted a GSM license. The third phase was from 1999 to 2004. This was the period after the Asian financial crisis and proves to be the phase that was most revolutionary. A new Telecom Act was enacted in 1999 and was made effective in 2000. There were also two new operators, PT Bakrie, PT Lippo Telecom entering the market. The fourth phase is from 2004 onwards, and saw the inception of the BRTI. There were also new 3G (currently there are five operators) and international liceses issued. Promotional efforts (which were false) by the operators was investigated by the Anti- Monopoly Agency and imposed tariff reductions and fines.
There are three regulators in Indonesia. BRTI is the regulator that is listed in the Act. Commissioners are appointed for two years. DGPT is the historical body. The second body is the Anti- Monopoly Agency (KPPU) and the third is the Ministry of Communication and Information which are accountable to the President.

Rohan: Does this mean that there are three regulators? BRTI is the regulator while the other two are a competition authority and a policy body.

Juni: But the industry was confused as there was competition between government agencies. This resulted in some degree of confusion within the industry.

Rohan: It can be argued that Indonesia has two regulatory agency in BRTI and DGPT, as they both have resources to engage in activity. However, it cannot be said that KPPU and and the Ministry are regulatory agencies as well. However, the way in which this is done is creating greater regulatory uncertanity.

Milestones: There are about 80,000,000 SIMs in 2007. There is a large increase in the number of SIMs after 2004, this can be explained by the non-offical interconnection agreements between the operators. The market share of Telkomsel has risen from 48% in 2003 to 49% in 2008.

Fixed: There are 2 wireline and 4 wireless players in the market. Wireline subcribers seems to be much the same but there is growth in the wireless sector.

Broadband: In 2007 leased line regulation was introduced.

Rural Vs. Urban: There is a significant difference between the penetration of the rural and urban areas.

Methodology: 50 respondents in total and the response  rate is rather equal. The main response mode was face-to-face while none were done online.

Overall scores: None of the categories made it to the average (3/5). Lowest responses came from USO and QoS. Overall, the responses do not seem to have changed much since the last survey in 2006.

Market entry: There is a monopoly is fixed wire- line sector. There is relativly more competition in the wireless sector. However, the mobile sector has rather healthy market. There are a large number of ISPs but they depend on the incumbent for the infrastructure. Mobile received the highest score in this section with broadband geting the lowest score.

Rohan: Getting capacity from an imcumbent is not a bad as long as the ISPs are given the option to build their own if the need arises.

Access to resources: There is no standard practice in providing spectrum. These have been awarded both arbitrarily and through auctions. Only domestic operators can own towers, while the others have to lease or share. About 12,000 towers need to removed. The ISPs have to use incumbent’s resources. Mobile scored the best in this category as well, both fixed and broadband were almost the same.

Interconnection: The incumbent operator prepares the interconnection plan and submits to BRTI, and then they suggest/ make changes and are then published by the operators.

There are three types of interconnection costs; originating, terminating and transit. There was a new interconnection cost revised in April 2008. In this category, fixed receives the best score while broadband has the lowest.

Tariff regulation: There is no strict tariff regulation but it is not fully flexible either. Fixed wireless/ mobile operators base their prices on BRTI interconnection rates/ guidelines. In 2006, the setting of price ceilings was removed but floor prices still exist to avoid anti- competitive measures.

Anti- competitive practices: KPPU handles the alleged monopolistic practices. KPPU is not fully thrusted by the industry. All three sectors scored less than the average.

USO: Different approaches have been tried and most have failed. Operators now pay 0.75% of gross revenue to the USO fund. However, there seems to be no infrastucture being built.

QoS: None of the sectors are heavily regulated but this seems to be getting more public attention.

Conclusion: The makets are developing but it is still behind its regional peers. There is strong incumbent power/ influence in the sector.