G/TRIMS/W/154
13 April 2015
(15-1972)  Page: 1/2
Committee on Trade-Related Investment Measures  Original: English
 
INDONESIA – CERTAIN MEASURES ADDRESSING LOCAL CONTENT  
IN INVESTMENT IN THE TE LECOMMUNICATIONS SECTOR 
QUESTIONS FROM JAPAN 
The following communication, dated 10 April 2015, is being circulated at the request of the 
Delegation of Japan. 
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Japan is aware of the following measures with local contents requirements in Indonesia's telecommunications sector:  
1. REGULATION OF THE MINISTER OF CO MMUNICATION AND INFORMATION TECHNOLOGY 
NUMBER: 07/PER/M.KOMINFO/2/2006 (Article4, 11) 
 
An operator of mobile cellular network at 2.1GHz radio frequency band of FDD Mode is required to 
allocate at least 30% of its Capital Expenditure (Capex) per year and at least 50% of its operating expenses per year for domestic products.  
 
2. MINISTERIAL REGULATION OF COMMU NICATION AND INFORMATION NUMBER: 
38/PER/M.KOMINFO/9/2007 (Article 18b) 
 
a. In the case of the supply of telecommunication access within the covered block area of 
Universal Telecommunication Service Obligation (WPUT), a Universal Service Obligation Operator is obliged to allocate at le ast 35% of Capex for domestic products. 
b. In the case where a Service Obligation Operator uses radio frequency 2.3 GHz, the 
telecommunication equipment used must have at least 20% of domestic component level. 
3. REGULATION OF THE MINISTER OF CO MMUNICATION AND INFORMATION TECHNOLOGY 
NUMBER: 07/PER/M.KOMINFO/01/2009 ON DE FINING THE RADIO FREQUENCY BAND FOR 
WIRELESS BROADBAND SERVICE (Article17) 
 
a. Tool/equipment used for wireless broadband service which uses radio frequency band of 
2.3 GHz and 3.3 GHz shall meet the Domestic  Component Level (hereinafter referred to 
as "TKDN") of at least 30% for the subscriber station and 40% for base station.  
b. In addition, tool/equipment used for wireless broadband service shall meet the TKDN of 
at least 50% within 5 years. 
4. MINISTERIAL REGULATION OF COMMU NICATION AND INFORMATION NUMBER: 
41/PER/M.KOMINFO/10/2009 
 
This regulation defines the calculation method of TKDN for each telecommunication operator, and Capex of TKDN includes costs incurred for construction of telecommunication infrastructure such 
as Engineering, Telecommunication Material/Equipment, Labor, Machinery and Supporting 
Services.  G/TRIMS/W/154 
 
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  5. GOVERNMENT REGULATION OF REPUBLIC OF INDONESIA NUMBER 7 OF 2009 ON TYPES 
AND TARIFFS ON TYPES OF NON-TAX STATE REVENUES APPLICABLE AT THE DEPARTMENT 
OF COMMUNICATION AND INFORMATION TECHNOLOGY 
 
This regulation defines the penalty to an  operator who fails to meet the TKDN. 
 We understand that these measures oblige an operator to purchase or use a certain amount of 
products (tools, equipment, handset, etc.) of dome stic origin or from any domestic source, and all 
of the above-mentioned measures are not limited to the government procurement. Japan is concerned that these measures accord products (tools, equipment, handset, etc) of another 
country treatment less favourable than like products of Indonesia's origin. Japan kindly asks 
Indonesia to answer the following questions for clarification. 
 Questions for Indonesia 
 Question 1  
Article II of TRIMS Agreement draws the provisio n of Article III of GATT, and paragraph 4 of 
Article III of GATT stipulates that the products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin. In our view, all of the above-mentioned 
measures seem to be inconsistent with paragrap h 4 of Article III of GATT and Article II of TRIMS 
Agreement. Does Indonesia consider these measures to be consistent with the agreements? If so, please explain the reason. 
 
Question 2  
In addition, according to the provisions of 1 (a) of the Annex of the TRIMS Agreement, TRIMs that 
are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of GATT include the measures which require the purc hase or use by an enterprise of products of 
domestic origin or from any domestic source. Therefore, in our view, those above-mentioned 
measures are inconsistent with paragraph 4 of Article III of GATT and TRIMS Agreement. Does 
Indonesia consider that those local requirements measures are consistent with paragraph 4 of Article III of GATT and TRIMS Agreement? If so, please explain the reason. 
 
Question 3  
With regard to Decree 41/PER/M.KOMINFO/10/2009, which stipulates the calculation method of 
the TKDN, it does not clearly define suppliers and products to which the TKDN is applied. In accordance with Article VI of the TRIMS Agreement which stipulates transparency, could Indonesia explain what TKDN is imposed and to whic h types of telecommunications operators?  
 
Question 4  
Are there any revision or additional regulations to those measures? If any, please provide English 
translations. 
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