According to a report by Google, Temasek, and Bain & Company (2022), Southeast Asia’s digital economy grew by 67 per cent between 2020 and 2022.
In the 2022 G20 presidency, Indonesia which is the largest economy in Southeast Asia, was vocal about digital-based economic transformation. The value of its digital industry grow to US$77 billion in 2022. The figure is expected to increase to US$130 billion by 2025. Indonesia’s size and geographical complexity presents significant opportunities for digitization, as well as challenges.
For digitization to achieve its stated objectives, digital infrastructure build out is the key. Investments in data centers, cloud solutions, submarine cable networks and reliable power is important. Submarine cables are critical digital infrastructure to enable international communications and data transfers.
This infrastructure is the backbone of the digital economy, financial markets and employment. A report by the consulting firm Analysys Mason projected that submarine cable investment would increase the number of internet users in Indonesia by 35 per cent, as it would reduce latency.
Data Centers; a key priority area
Indonesia has around 203 million internet users. In line with this increase in users, the Indonesian government has announced its intent to promote the country as a digital hub in Southeast Asia. For this, it plans to increase investment in the digital infrastructure, e.g., building data centres and talent development in related areas.
Keppel Data Centres Holding (Keppel Data Centres) is 100% held by Keppel Telecommunications & Transportation (Keppel T&T) a wholly owned subsidiary of Keppel Corporation, one of Singapore’s flagship multinational companies with a global footprint in more than 20 countries. It provides solutions for sustainable urbanisation, focusing on four key areas comprising energy & environment, urban development, connectivity and asset management.
Prior to the pandemic, Indonesia’s internet user base was growing. Sensing this opportunity, the Salim Group continued to strengthen its digital infrastructure initiatives. As a part of this strategy, it reached out to Keppel Data Centres, a world-class global data center player. “The effort was to initiate a partnership to develop a world-class data center in Indonesia,” says Keppel DC’s Indonesia Country head, Saberi Bakar.
In 2019, the joint venture was established and formed by the name IndoKeppel Datacenter Jkt (IKDC1) in Bogor, Greater Jakarta. In 2020, the construction of the data centre started and in 2021, the first phase was completed and operational.
“Our target market is to capture wholesale global cloud players and local enterprise colocation customers,” explains Saberi Bakar.
The IKDC1 has an IT load of up to 4.5 MW and is certified Tier III. Here are some of the features;
- A two-storey purpose built data centre building with high GFA efficiency, yielding potentially 1200 racks for 4 data halls
- 5 MW of IT capacity
- N+1 Water-Cooled Chillers
- Dual Water Supply
- Dual incoming power feed with diverse path into the DC building
- Chilled water piping in ring circuit and main distribution piping installed outside the typical data centre halls space
- Dual incoming fibre telco connection with diverse path into the DC building and distributed to dual MDF and MMR room on every floor
- DCIM Monitoring
- TVRA compliant
DC’s Indonesia’s priority
In recent years, data centers have become a priority for Indonesia and have generated business opportunities for domestic and foreign investors. The data centre business is a new source of foreign exchange reserves especially given that Singapore has imposed a moratorium on the development of large-scale data centres.
As a major digital hub in the Asia Pacific, data centres account for 7 per cent of Singapore’s total electricity consumption. Until recently, Singapore had only approved the construction of data centres with an energy consumption of around five megawatts to slow down the growth of the sector.
Taking advantage of this situation, the Indonesian government has loosened investment barriers and provided incentives to attract investors. Data centres with an investment of more than 34 million dollars will receive a tax exemption of up to 100 per cent.
Indonesia’s Ministry of Communication and Information Technology through its 2020–2024 Strategic Plan introduced various steps to promote policies that encompass the development and implementation of cloud computing, construction and utilisation of national data centres. The plan also covered the implementation of 4G networks and the construction of base transceiver stations for rural areas, as well as fibre optic connections for the development of smart cities.
