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    KPPU Urges Government to Cancel Tariff Determination of Telecommunication Lower Limit


    BANDUNG-Chairman of the Business Competition Supervisory Commission (KPPU), Syarkawi Rauf said the emergence of the policy discourse of setting the lower limit of data communications services, need not be done considering the adverse effects of the lower bound tariff policy for the industry in the long run and the national economy as a whole.

    According to Syarkawi, there are five considerations for not issuing a policy of non-implementation of the lower tariff of communication services.

    "There are at least five reasons why the lower tariff policy of data communications services is not enforced," said Syarkawi in his official statement in Bandung, Tuesday (7/25/2017).

    Firstly, every telecommunication operator has different tariff. Included in terms of generating tariffs that are increasingly affordable by the community.

    "Currently, people can find a very varied price with various schemes from Rp 25.000 / GB to Rp 57,500 / GB," he said.

    Second, the biggest problem of the lower tariff policy lies in the determination of the magnitude. Boundary rates are generally set to protect all entrepreneurs without exception, including inefficient business actors and a burden to industry and national economies.

    Third, the lower limit tariff is an obstacle for efficient telecommunication operators capable of generating tariff rates below the lower limit rates. The business actor, unable to use his efficiency to win the competition.

    In the long term, it will create a disincentive for telecom industry efficiency which leads to lower tariffs and will push rates up.

    "Innovation that leads to the presence of cheap tariffs will be hampered, whereas in the telecommunications industry, the technological change cycle is growing very fast with the ability to reduce the extraordinary costs," he said.

    Fourth, due to the low tariff hamper below the lower limit tariff rates, the community loses affordable tariffs. Appears loss of consumers / communities as users of data communication services because they have to pay expensive tariffs than they should.

    Fifth, in the national economy, the lower tariff policy tends to be the driving element of inflation, this is because there is a potential business actors to request a periodic rate lower tariff.

    "On the other hand, in the event of deflation, efforts to lower the lower limit tariff is not easy to do," he added.

    Meanwhile, in response to the emergence of suspicion that there are operators that conduct predatory pricing through low tariff strategy, which aims to get rid of competitors, KPPU encourages the operator or any party who has evidence related to it to report to KPPU.

    "For people who are aware of any alleged unfair business competition practices, please submit their report, KPPU is ready to process according to the prevailing regulations," he concluded. (MAT)

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