State-owned enterprise PT Telkom Indonesia Tbk has absorbed its IDR40 trillion capital expenditure (Capex) to develop its support infrastructure in the first quarter of 2022. Among the investments are establishing data centers in Cikarang, Bekasi regency, and increasing the quality of 4G and 5G services to enhance the company’s digital quality.
Telkom is a multinational telecommunications company established in 1965 that provides communication infrastructure. It has the following subsidiaries such as Telkomsel, Mitratel, Telkomsigma, Telkomsat, TelkomMetra, Telin, Infomedia Nusantara, TelkomProperty, Flexi, Telkomcel, Telin Singapore, PT MetraPlasa, Bangtelindo, Telin Hongkong and many more.
Data centers for the future
Telkom had allocated 25% of its income for Capex, or about IDR40 trillion, in 2022 for digital connectivity for Telkom and Telkomsel. The company is also focusing its Capex on investing for future growth of the company such as quality maintenance, 4G capacity, launching of 5G and IT and mobile business maintenance.
Telkom Chief Financial Officer (CFO) and Management Risk Officer, Heri Supriadi, said during a public expose on July 27, 2022: “[The company is] developing digital platform, digital services, then data centers and increasing cloud capacity.”
According to President Director Ririek Adriansyah, the company is preparing to develop its data centers and is finishing hyper-scale data centers in Cikarang and will further develop them in the future.
“For its fixed-line business, the Capex is allocated for fiber-based access and backbone undersea infrastructure development and other projects such as data center towers,” Telkom said in a memo dated July 31, 2022.
Challenges in data center development
Telkom’s data centers are still centered in the Greater Jakarta (Jabodetabek) areas of Bogor-Depok-Tanggerang-Bekasi (Jabodetabek).
According to Anton Sitorus, Head of Research of real estate agency Savills Indonesia, the Greater Jakarta remains an area of concentration of data centers due to the availability of optic fiber and reliable electrical power.
On the other hand, compared with other countries, the price of data centers in Indonesia fluctuates due to the limited supply and lesser competitiveness between operators. Indonesia currently is entering a new age of data centers, its infrastructure is still minimum only in certain areas.
“The main problem that hinders investments in Indonesia’s data centers is due to lack of infrastructure and unstable electricity supply, especially in rural areas,” Sitorus said.
