PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA TBK

Regulatory Filings • Sep 29, 2016

CORRESP 1 filename1.htm tlkm-responsetocommentletter.htm - Generated by SEC Publisher for SEC Filing

| Via EDGAR and E-mail September 29, 201 6 Ms. Cecilia Blye Chief, Office of Global Security Risk Securities and Exchange Commission Washington D.C. 20549 United States of America RE: Perusahaan
Perseroan (Persero) PT Telekomunikasi Indonesia Tbk a/k/a Telkom Indonesia Form 20-F for the Fiscal Year Ended December 31, 2015 Filing date: April 1, 2016 File no.: 1-14406 Dear Ms. Blye: This is in response to the comment letter of the staff of
the Securities and Exchange Commission (respectively, the “Staff” and the
“Commission”) dated August 15, 2016, relating to the annual report on Form
20-F for the fiscal year ended December 31, 2015 (the “2015 Form 20-F”) of
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (the
“Company”). The Company is also submitting a copy of this letter to
the Commission as “correspondence” via EDGAR. For your convenience, the Company has included the
Staff’s comments in this response letter in bold form and keyed its responses
accordingly. The Company’s responses to the comments are as follows. 1. We note references in the
Form 20-F and in independent news articles to your business in the Middle
East. Syria, located in the Middle East and Sudan, which can be included in
references to the Middle East, are designated by the U.S. Department of State
Department as state sponsors of terrorism, and are subject to U.S. economic
sanctions and export controls. Your Form 20-F does not include disclosure
about those countries. Please describe to us the nature and extent of any
past, current, and anticipated contacts with Syria and Sudan, whether through
subsidiaries, affiliates, distributors, resellers, or other direct or
indirect arrangements. You should describe any products, components,
technology or services you have provided, directly or indirectly to Syria and
Sudan, and any agreements, commercial arrangements, or other contacts with
the governments of those countries or entities they control. RESPONSE: The Company’s subsidiary, PT
Telekomunikasi Selular (“Telkomsel”), is party to international roaming
agreements with GSM mobile network operators in various countries, including
Sudan (with MTN Sudan Co. Ltd. and Sudanese Mobile Telephone Co. Ltd.) and
Syria (with Spacetel Syria and Syriatel Mobile Telecom S.A.) (collectively,
the “Roaming Partners”). Certain of the Roaming Partners are or may be
government-controlled entities. The purpose of these agreements is to provide
Telkomsel’s customers with coverage in areas where Telkomsel does not own
networks, and for this reason Telkomsel intends to continue the activities
covered by these agreements. We also provide telecommunications services in the
ordinary course of business to the embassies of Sudan and Syria in Jakarta,
Indonesia. Neither the Company nor any of its subsidiaries has provided
any products, components, technology or other services to Sudan or Syria. 2. Please discuss the
materiality of any contacts with Syria or Sudan you describe in response to
the comment above, and whether those contacts constitute a material
investment risk for your security holders. You should address materiality in
quantitative terms, including the approximate dollar amounts of any
associated revenues, assets, and liabilities for the last three fiscal years
and the subsequent interim period. Also, address materiality in terms of
qualitative factors that a reasonable investor would deem important in making
an investment decision, including the potential impact of corporate activities
upon a company’s reputation and share value. Various state and municipal
governments, universities, and other investors have proposed or adopted
divestment or similar initiatives regarding investment in companies that do
business with U.S.-designated state sponsors of terrorism. You should address
the potential impact of the investor sentiment evidenced by such actions
directed toward companies that have operations associated with Syria and
Sudan. RESPONSE: The Company does not believe that its operations
involving Sudan and Syria, either individually or in the aggregate, are
material from either a quantitative or qualitative perspective for the
following reasons. Quantitative Materiality . For 2013, 2014 and 2015 and any subsequent interim period,
aggregate revenues to the Company from all business activities related to
Sudan and Syria were less than 0.001% of the consolidated revenue of the
Company for each period, which are consistent with historic levels of
business related to those countries. The revenues from business activities
related to Sudan and Syria as a percentage of the Company’s revenues are also
well below any reasonably accepted threshold of quantitative materiality. In addition, the Company had no subsidiaries, offices,
facilities, employees or other assets located in Sudan and Syria during the
relevant fiscal years and the subsequent interim period. Further, the Company
had no assets or liabilities in Sudan and Syria during the relevant fiscal
years and the subsequent interim period. Qualitative Materiality . From a qualitative perspective, the Company does not
believe that its activities with Sudan and Syria, either individually or in
the aggregate, amount to the level of materiality that would affect the
investment decision of a reasonable investor. The Company is not a U.S. person – i.e., a company
organized under the laws of the United States – that is otherwise subject to
U.S. economic sanctions. The Company does not have a business presence in Sudan or Syria. Moreover, the Company does
not believe that the limited activities outlined above are harmful to the
Company’s reputation or share value. Notwithstanding U.S. comprehensive
sanctions targeting Sudan and Syria, the applicable U.S. sanctions
regulations administered by the U.S. Department of the Treasury’s Office of
Foreign Assets Control (“OFAC”) include broad authorizations for the receipt
and transmission of telecommunications involving Sudan or Syria. In addition, the Company does not believe that a
reasonable investor would be concerned by the minimal business described
herein conducted by an Indonesian company that is not a U.S. person for
purposes of U.S. sanctions targeting Sudan and Syria. To the Company’s
knowledge, there has been no detrimental impact to its reputation or share
value due to these activities. Accordingly, the Company believes that any direct or
indirect contacts the Company has had with Sudan and Syria are not and were
not material to the Company, its financial condition or its results of
operations. 3. In Note 36 to the
financial statements, you list significant agreements with affiliates of
Huawei Technologies Co. Ltd. and ZTE Corporation. Huawei recently was issued
a subpoena by the U.S. Department of Commerce regarding its exports to Syria,
Sudan and Iran. Iran also is a U.S.-designated state sponsor of terrorism and
is subject to U.S. economic sanctions and export controls. ZTE has been the
subject of news reports about the Commerce Department’s recent addition of
ZTE to its Entity List and Unverified List because of alleged violations of
export controls relating to Syria, Sudan and Iran. Please address for us the
potential for reputational harm from your relationships with affiliates of
Huawei and ZTE. RESPONSE: The primary relationship between the Company and Huawei
Technologies Co. Ltd. and its affiliates (“Huawei”) and between the Company
and ZTE Corporation and its affiliates (“ZTE”) is for the procurement
by the Company of certain equipment and services necessary for the
maintenance and upgrade of the Company's network
infrastructure in Indonesia. The Company also has entered into vendor
financing facilities with Huawei and ZTE in relation to the procurement of
such equipment and services. In addition, the Company has joint research and development
programs with ZTE for the enhancement of the Company’s IPTV services and
Huawei for the development of new broadband services. At this time, Huawei
and ZTE continue to be suppliers to the Company for its operations in
Indonesia. The Company does not believe that its relationships with
Huawei and ZTE related to its business in Indonesia create any material risk
of reputational harm. In addition, the Company does not believe that its
relationship with Huawei and ZTE is connected in any way to any activities
that Huawei and ZTE may have in relation to Iran, Sudan or Syria. On March 8,
2016, the U.S. Department of Commerce’s Bureau of Industry and Security
(“BIS”) imposed limited restrictions on exports and reexports of U.S.-origin items
to ZTE and one of its affiliates, based on allegations that ZTE had engaged
in illicit export activities with respect to Iran. These U.S. export and
reexport controls were limited in scope and do not affect the Company’s
relationship with ZTE. On March 24, 2016, BIS suspended even these targeted
controls through a general license that remains in effect and continues to
allow U.S. exports and reexports to ZTE. * * * The Company hereby acknowledges that: • the Company is responsible for the adequacy
and accuracy of the disclosure in the filing; • staff comments or changes to
disclosure in response to staff comments do not foreclose the Commission from
taking any action with respect to the filing; and • the Company may not assert
staff comments as a defense in any proceeding initiated by the Commission or
any person under the federal securities laws of the United States. * * * We appreciate in advance your time and attention to our
response. Should you have any additional questions or concerns, please feel
free to call Andi Setiawan at +62 21 5215109. |
| --- |
| Respectfully submitted, |
| Perusahaan Perseroan (Persero) PT
Telekomunikasi Indonesia Tbk |
| By: /s/ Andi Setiawan |
| Andi Setiawan |
| VP Investor Relations |