Call it the perfect storm for Indonesia’s data center market. A mix of data center providers and telcos are acting as torch bearers for Indonesia’s digitalization efforts.
A few days back, state-owned phone carrier PT Telkom Indonesia has held initial talks with prospective investors for its data center business.
This business could seek a valuation of more than $1 billion, according to a Bloomberg report. Options under consideration include selling a minority stake in the data center unit, the people said.
The people asked not to be identified because the matter is private. Discussions are at an early stage and might not lead to any transactions, the people said. President & Director, Ririek Adriansyah said in response to a Bloomberg News query, adding that the business could be valued at about 25 times Ebitda.
“We will see how our data center consolidation and development progresses. We will also need to look at the macro conditions before deciding on the right scenario,” he said.
Data Centers Get A Boost
Indonesia’s data center market size was valued at USD 1.7 billion and is projected to reach USD 2.4 billion by 2027, growing at a CAGR of 5.46% during 2022-2027, according to research from Arizton. Telecom operators, followed by colocation operators, dominate Indonesia’s data center market.
Recently, companies such as Equinix, Huawei, Tencent, GDS, Data Center First, are amongst a slew of operators who have set up base in Indonesia. In October, Equinix announced its expansion into Indonesia and its intention to build an International Business Exchange (IBX) data center in the center of Jakarta for about US$74 million.
It attempts to address rising demand for the digital services necessary for sustaining modern enterprises. In the same month, Huawei announced that it will open a new Cloud region in Indonesia in 2022.
This Region holds the Disaster Recovery Institute International (DRI) level-6 certification and is equipped with the 3AZ DR architecture. Additionally, more than 60 new cloud services will be introduced to provide premium user experiences for online gaming, short video platforms, insurance, and finance.
Additionally, the governments of South Korea and Indonesia have signed a cooperative agreement to develop a 100 million USD National Data Centre in Batam, the Riau Islands. Batam is also a prime location for data center development and the Indonesian government has important plans for (Batam) as a key engine of Indonesia’s digital transformation and foreign investment-driven growth.
Some of the key investors in the Indonesia data center industry are DCI Indonesia, DTP, Keppel Data Center, Telekom Indonesia, and Biznet Data Center. Apart from this, all the major cloud service providers are present in Indonesia.