First Media and its subsidiary Internux (Bolt internet), an internet service providers under Lippo Group, is at risk of having its operating license revoked due to delinquent payments for the frequency of usage rights (BHP) of 2.3GHz radio frequency band.
The Ministry of Communication and Information (Kominfo) has already sent three warning letters to some license holders that have not paid their bills, First Media and Internux included. The two companies are asked to immediately pay the fee arrears no later than November 17, 2018.
Kominfo stated that revocation of the license for frequency usage is in accordance with local regulation.
First Media says that this problem won’t affect customers of the First Media cable TV and internet service as this is operated by a separate subdivision. Therefore, First Media cable customers will continue to receive services regardless of the threat of Bolt’s license revocation.
According to Kominfo report, First Media Tbk has not paid the frequency fees since 2016, including principal arrears and penalties of Rp.364 billion (US$24 million) for Zone 1 and 4 that cover North Sumatra, Greater Jakarta area, and Banten.
On the other hand, Internux’s fee arrears reached Rp.344 billion (US$23 million).
Instead of settling their overdue payments, First Media reportedly launched a lawsuit to the Directorate General of Resources and Equipment of Post and Information Technology (DG SDPPI), the division under Kominfo, asking to delay the collection of the arrears.
The company’s appeal was ignored. Kominfo will continue to collect radio frequency fee arrears (BHP) to First Media. Dwi Handoko, Director General of SDPPI Kominfo, said that they were just following the procedure.
So far, First Media says that its services, which includes cable television, and internet and mobile connection services, is not affected in spite of the debt.
Yet, as Kominfo is ready to impose sanctions, if First Media and Internux failed to repay the debts after receiving a warning again, their licenses will be cut off.
Neither First Media nor Internux has commented on Kominfo’s stance after the lawsuit as of press time.
First Media and Internux are subsidiaries of the giant corporation Lippo Group.
Led by Mochtar Riady, Lippo Group also owns Ovo, an e-wallet service under the flag of PT Visionet Internasional. Although some of Lippo Group’s businesses are currently in trouble, it doesn’t seem to affect Ovo directly, which continues to expand. The most recent strategic partnership formed by Ovo is a collaboration with e-commerce unicorn Tokopedia on payment service.
Updated on November 15th. Added a paragraph to clarify that First Media cable TV and internet customers are not affected.
Editor: Ben Jiang