The race to build data centers in Southeast Asia is heating up, and Indonesia’s largest phone and mobile company has joined the chat.
Telkom Indonesia wants to capitalize on the growing use of AI – it has extended its already huge data center in West Java, which can accommodate 5,000 or more servers.
It’s also using AI to pinpoint where to deploy fiber optic cables and where to build cell towers according to demand, making sure it invests every penny in the right place.
Why should I care
Demand for data centers in Southeast Asia is expected to increase by 20% annually until 2028, according to Maybank. Telcos, utilities, construction and infrastructure companies are expected to benefit from this wave. Such firms include:
- Singtel.
- Globe Telecom.
- Sunway.
- IMJ Corp.
- Solarvest.
- YTL Power.
Gold rush in the region
While being owned by the state gives Telkom Indonesia an edge, it still faces stiff competition at home, from the likes of DCI Indonesia, Princeton DG and NTT Communications; and regionally, from Singapore’s ST Telemedia Global Data Centres.
The potential of digital economics “in the future is so big,” Muhamad Fajrin Rasyid, Telkom Indonesia’s director of digital business, told MONIIFY.
The firm plans to open a large data center in Batam, which it hopes can capture demand spillover from neighboring countries such as Malaysia and Singapore. It plans to expand its data center business regionally next year.
The region is heaving with activity. In Malaysia alone, tech giants like Oracle, Microsoft, Google and Amazon have committed $16.9 billion to build cloud and AI infrastructure through 2028.
The bigger picture
- Telkom Indonesia is consolidating its data center business to compete more effectively. In August, it appointed Goldman Sachs and Mandiri Sekuritas to sell a minority stake in its data center business, which could value it at more than $1 billion.
- Last year, it spent 22.1% of total revenue – $2.1 billion – on capital expenditures such as submarine cables and data centers, against a targeted budget of 25% to 30%.
- It has 32 data centers, five of them overseas, according to its 2023 annual report.
