Challenge to Transforming the Limitation on Overseas Investment in the Business of Internet Protocol TV Due to the Regulation in Indonesia

Abstract

Indonesia has advanced to a new technological development era via digital television. The challenged was adopted in 2009 and later on was revised through the Regulation of Ministry of Communication and Informatics Number 6 Year 2017 about the Management of Internet Protocol Television Services (IPTV Regulation). This article discusses about state responsibilities to evaluate and supervise the management of Internet Protocol Television (IPTV) services while on the other hand monitoring the restriction on nominee arrangement according to Law of the Republic of Indonesia Number 40 Year 2007 concerning Limited Liability Company as well as Law of the Republic of Indonesia Number 25 Year 2007 Concerning Investment Law, which significantly impacts IPTV management. From a framework perspective, IPTV business requires a consortium comprised of several companies. As such, the business requires massive investment and detailed planning. However, a company interested to obtain license on broadcasting services television must limit its foreign investor participation with the maximum of 20% (twenty percent) from its total capital as regulated under the Negative List Regulation. Meanwhile existing local investors have obstacle to start the business due to the insufficient national funds. Facing this obstacle, foreign investors tend to resort on nominee arrangement to develop IPTV industry captive market in Indonesia. The research of this study focuses on how state can resolve the issue of nominee arrangement by revising the Indonesian Negative List requirement on IPTV industry.