Astro dispute drags in RI, Malaysian governments

Rendi Akhmad Witular, The Jakarta Post, Jakarta

The governments of Indonesia and Malaysia are slated to meet next month to help settle a licensing problem faced by the first Malaysian cable television provider, Astro All Asia Networks Plc, to commence operations in Indonesia.

Officials from the telecommunications authorities of the two countries will meet on May 3 and 4 to help settle the problem, which had resulted in a lack of legal certainty for investors, Riza Primadi, senior vice president for news and current affairs at PT Direct Vision said Wednesday.

Direct Vision is 20 percent owned by Astro, which uses the brand name Astro TV.

"The meeting will discuss reciprocity matters, including the problem faced by Astro in trying to operate here using a foreign-owned satellite," said Riza after meeting Vice President Jusuf Kalla on Wednesday to seek support for a resolution of the problem.

A number of officials at the Indonesian Ministry of Information and Communication, backed by certain local media tycoons apparently afraid they will loose customers following Astro's start-up, appear determined to disrupt the company's operations.

They argue that the use of a foreign satellite by Astro contravenes the 2005 Satellite Communications Law, which prohibits the use of foreign satellites in Indonesia unless reciprocal rights are accorded to Indonesian satellites.

Astro, which provides 46 local and international channels, uses Malaysia's Measat-2 satellite.

The Directorate General of Posts and Telecommunications had earlier this month said that in its opinion Direct Vision should not be allowed to operate in Indonesia as it used a foreign satellite.

However, Riza said the directorate general's statement was unclear and open to differing interpretations, resulting in a further lack of legal certainty for the company.

"Vice President Kalla told us not to worry as the government will hold talks with the Malaysian government to seek a resolution to the issue," said Riza, who declined to say whether the problem was the result of unethical business competition.

He added that Kalla was actually thankful that the issue had come to the fore as many broadcasters and multimedia companies that illegally used foreign satellites to operate were now rushing to register with the government and make their operations legal.

"There are a lot of local firms using foreign satellites that have not registered with the government. These companies don't pay tax or broadcasting royalties. Since the very start of our operations, we have frankly admitted that we are using a foreign satellite. And we always pay our taxes," said Riza.

A number of companies operating in the cellular, internet and banking network businesses are believed to be illegally using foreign satellites.

According to market research conducted by Direct Vision, the level of pay-television penetration in Indonesia currently stands at only 0.6 percent of the some 30 million households nationwide, compared to 31 percent in Malaysia and 37 percent in Singapore.

Direct Vision has about 10,800 customers.
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