Policy risk: Media sector’s non-compliant status

Wendy Chandra
Research Analyst
Research Department, Bahana Sekuritas

With the Jokowi administration fixated on proper licensing (ie, from aviation to the retail sector), we believe that the Indonesian media companies could be at risk as they are not in compliance with the current Broadcasting Law.

Based on our conversation with the Indonesian Broadcasting Commission (KPI), it is possible that the Broadcasting Law could be more stringently applied going forward, adversely impacting both MNCN and SCMA in our media universe.

According to industry experts that we talked to, the spirit of the Indonesian Broadcasting Law is to ensure the independency and neutrality of media companies in spreading information. Additionally, anti-monopoly is also part of the essence of the law, particularly given the sensitive and influential nature of the industry.  

It is worth noting that most of the Indonesian national free-to-air (FTA) TV stations are owned or controlled by conglomerates with political exposure. Evidently, during the quiet period in the 2014 elections, the KPI had warned various TV stations for still continuing to broadcast politically-related news to benefit certain presidential candidates.

With broadcasting companies not in compliance with Government Regulation No.50/2005 (exhibit 1) on single individual/entity limitation ownership, we see the potential that this issue could be once again raised by the Government into consideration of revision as the KIDP.  Currently, individuals or entities controlled by conglomerates with political interests, could own more than one TV-broadcasting company and license.

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