Telcos pivot as Indonesia’s data needs surge

Smartphone adoption is driving data centre market surge with expanded 4G and 5G networks

Indonesia’s data centre market is projected to hit 2.68 gigawatts by 2030—driven not just by smartphone adoption, but by a sweeping digital transformation across key sectors.

“Indonesia’s data center service reflects a full scale digital transformation across industries,” said Ashish Gautam, Senior Manager, Cloud & Data Centres, TMT at Mordor Intelligence.

Gautam noted that the rapid growth of artificial intelligence and cloud computing is creating “unprecedented infrastructure demands.” Major tech players are responding accordingly. “Last month, Microsoft launched a $1.7 billion AI ready cloud region in Indonesia, soon followed by Google Cloud expanding its Jakarta footprint to support enterprise AI,” he added.

Indonesia also benefits from regional connectivity advantages, such as subsea cable links to Singapore and the U.S. “These regions are emerging as low latency, cost efficient data center nodes,” he said, further supported by SCD tax incentives and 5G rollout.

For telecoms, this data infrastructure expansion presents a major inflection point. “It’s a strategic pivot point where telecom companies can transform from connectivity providers into digital infrastructure powerhouses,” Gautam said.

He highlighted that digital services and enterprise segments are expected to contribute 30–40% of telco revenues in coming years. “The recent $200 million agreement between Indosat and Nvidia AI center highlights how telecoms can move beyond connectivity to deliver integrated AI hosting and compute solutions,” he said.

To sustain this momentum, however, regulatory support is critical. “Indonesia’s data center electricity demand is projected to quadruple from almost 6.7 terawatt hours in 2024 to almost 26 by 2030,” Gautam said. “Yet the country lacks green tariff schemes.”

He called for “clear regulatory guidance and consistent compliance frameworks” to build investor confidence. Gautam added that while Indonesia’s data centre standards align with global benchmarks, “ambiguity around its mandatory enforcement, especially for foreign backed projects, creates uncertainty.”