Indonesia’s state-owned investment firm Temasek Holdings has filed an appeal challenging the decision by Indonesia’s Commission for the Supervision of Business Competition (KPPU), which found that the firm violated the country’s antitrust laws by acquiring majority ownership in rival mobile telecommunications firms. The acquisition involved Indonesia’s two largest mobile operators: PT Indosat (Indosat) and PT Telekomunikasi Selular (Telkomsel).

In November 2007 a five-member panel of the KPPU found that Temasek violated the antitrust laws by indirectly holding a majority interest in both Indosat and Telkomsel through its affiliates Singapore Telecom (SingTel) and Singapore Technologies Telemedia (Telemedia). The panel ordered Temasek to divest its interest in either Telkomsel or Indosat within two years, and further ordered each of Temasek, SingTel and Telemedia to pay US$4 million in fines.

Under Indonesia’s antitrust laws, it is unlawful for an entity to hold a majority stake in more than one company within the same industry. According to Syamsul Ma’arif, head of the KPPU panel that ruled against Temasek, the company’s “cross-ownership of the Telkomsel and Indosat has led to Telkomsel committing a monopolistic act and abuse of dominant position through charging excessive tariffs.” The companies deny allegations of anticompetitive behavior and argue that the KPPU has misapplied the law. Telemedia and SingTel have each filed separate appeals of the KPPU’s ruling.