Indonesia's Journey Into The Digital Era Linked to The Rapid Expansion of Data Centers

An increasing number of data centers are being established in Indonesia, particularly in the Greater Jakarta and Batam areas.

Foto: Dok.
Foto: Dok. (Jakarta) – The steady growth of the digital economy has prompted a surge in investments in digital infrastructure in Indonesia.

Additionally, the unrelenting proliferation of smartphones and streaming services has created a corresponding need for data storage and dissemination.

In response to this demand, an increasing number of data centers are being established in Indonesia, particularly in the Greater Jakarta and Batam areas.

Ferry Salanto, Head of Research of Colliers Indonesia mention that in Indonesia, the surge in internet traffic and data volume is unparalleled.

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Key indicators include a 57% increase in user interest, a 77% internet penetration rate, a 60.4% rise in social media users and a 46% increase in average hours spent on mobile phone usage.

Despite these impressive figures, it is essential to recognise that technological applications and advancements have been on a robust upward trajectory for several years.

"The continuous growth of the information, communication and technology (ICT) sector remains the fundamental driver of data center demand,” Ferry Salanto added.

As of the end of 2023, a total of 35 data center projects, including hyper scale and collocation types, are in operation in the Greater Jakarta area, primarily located in the city center, to cater to Banking, Financial Services and Insurance (BFSI) industries.

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However, there is a noticeable trend of hyper scale data centers being developed in suburban and rural areas like Bekasi, Karawang and Bogor.

This shift is driven by the need for larger-scale facilities with greater power capacity, coupled with the advantage of cheaper land prices away from the city.

Moreover, there are five under-construction hyperscale DC projects in Batam, including, most notably, the Nongsa Digital Park, with a total of 221 MW, set to be completed by 2024–2025.

This project, designated as a Special Economic Zone (SEZ), aims to serve as a “digital bridge” between Indonesia and Singapore, further boosting digital economic activities.

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Recognising the potential of Indonesia's digital economy, international investors and technology companies are actively participating in the growth of the data center industry.

Strategic partnerships and foreign investments are contributing to the development of state-of-the-art facilities, bringing global expertise and advanced technologies to the Indonesian market.

Indonesia's journey into the digital era is intrinsically linked to the rapid expansion of data centers.

As the country embraces digital transformation, the development of a robust data infrastructure becomes essential for unlocking the full potential of its digital economy.

With a supportive regulatory environment, increased foreign investments and a commitment to sustainability, Indonesia's data center industry is poised for sustained growth, playing a pivotal role in shaping the nation's digital future.

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