Indonesia Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in indonesia, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Information and Telecommunications Technology
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Overview

Table: Import and Exports ICT Sector
 2020202120222023 (est)
Total Exports5,1676,4886,9777,535
Total Imports11,50713,66614,25014,962
Import from the U.S.210172226250
Exchange Rate14,58214,30814,850N/A

Unit: USD millions

Source: Indonesian Central Bureau of Statistics, Global Trade Atlas. Average exchange rate of Indonesian rupiahs to U.S. dollars from the World Bank.

Business fields in the ICT sector are predicted to be consistent in maintaining economic growth, moreover, Indonesia’s digital economy potential is expected to grow rapidly in the next few years. Revenue in the IT services market is projected to reach USD 4.88 billion in 2023. IT Outsourcing dominates the market with a projected market volume of USD 1.69 billion in 2023. The Indonesian telecommunications market thrives as a mobile-centric industry, featuring four large network operators and a dominant fixed-line provider with a near-monopoly. The Indonesia telecom services market size was valued at USD 12.9 billion in 2022 and is expected to grow at a CAGR of more than 1% during the forecast period, 2022-2027. The growth will be driven by ongoing investments in 4G/5G network expansion and development by major operators and subsequent rise in mobile data usage, and investments in ICT and telecom infrastructure to accelerate digital transformation in the country.

With regards to telecommunications, the sector is undergoing massive transformation, driven by increasing numbers of cellphone and internet users. With over 355 million mobile cellular subscriptions, Indonesia has the third largest cellular market in the world only behind India and China. According to Fitch Solutions, there were an estimated 258 million 4G subscribers and 79 million 3G subscribers.

There are four telecom companies in Indonesia: Telkomsel, Indosat Ooredoo, XL Axiata, and Smartfren. State-owned telecom operator, Telkomsel led the mobile, fixed voice, and fixed broadband segments in 2022. Telkomsel’s strong footprint in the circuit-switched and VoIP segments will support its leadership position in the fixed voice segment through 2027.  

Leading Sub-Sectors

  • Satellites and ground equipment
  • Submarine and land fiber optic cable network
  • Microwave communication equipment
  • LTE network
  • Cloud technology
  • Broadband solutions
  • eGovernment, eHealth, eProcurement, including for Open-Source Software
  • Police and security communications
  • Maritime and fishery monitory system
  • Value-added services

Opportunities

Indonesia’s digital infrastructure is attracting high value foreign direct investment. Various ICT infrastructure projects-the backbone to attract investments in technology.

Some ICT Infrastructure projects:

  • Palapa Ring Project

A 35,000 km land and sea cable are built to provide high speed internet access to both rural and urban areas.

  • Base Transceiver Station (BTS) Tower

Further improves internet coverage, on top of the Palapa Ring Project. As of 2021, 39,062 villages have BTS towers.

  • Project Satellite SATRIA

Launching in 2023 to improve internet coverage in the frontier, outermost, and disadvantaged areas (3T districts). Upon completion, it will provide a capacity of 150 Gbps through High Throughput Satellite technology.

  • AWS USD 5 billion investment in the next 15 years

Construction of data centers, operational expenses of utilities and facilities to fuel Indonesia’s digital transformation.

The Indonesia Data Center market size is expected to grow from USD 2.06 billion in 2023 to USD 3.98 billion by 2028 at a CAGR of 14.09% during the forecast period (2023-2028). One of the critical sources of growth in the region is its increasing internet economy. Greater Jakarta is covered as segments by Hotspot. Large, Massive, Medium, Mega, Small are covered as segments by Data Center Size. Tier 1 and 2, Tier 3, Tier 4 is covered as segments by Tier Type. Non-Utilized, utilized are covered as segments by Absorption.

The tier 3 segment had a market share of over 50% in the Indonesian data center market in 2022. It is further projected to register a CAGR of 15% to reach an IT load capacity of 652.6 MW by 2029. Tier 4 segment is expected to witness the highest growth of 25.9% by 2029. As of 2022, there were nearly 25 tier 3 data center facilities in the country, followed by eight tier 4 data centers. The growing demand from customers is expected to drive the construction of tier 3 and 4 data centers in Indonesia in the coming years.

Resources

Interested parties may contact Commercial Specialist Yulie Tanuwidjaja at Yulie.Tanuwidjaja@trade.gov