Telkom Indonesia may Sell a Portion of its Data Center Business

Telkom Indonesia, Indonesia’s state-owned telecom company, is contemplating the sale of a portion of its data center business.
Telkomsel 4G IndonesiaThe plan is to conclude the transaction by the second half of this year.

Ahmad Reza, Telkom’s Senior Vice President of Corporate Communication and Investor Relations, disclosed that the company is currently in the process of selecting a financial advisor and deliberating on the extent of the stake to be divested.

The valuation of Telkom’s data center business is estimated to exceed $1 billion.

The involvement of a global strategic partner or robust financial investors is anticipated to facilitate Telkom’s expansion of its data center operations both domestically and internationally.

Telkom, recognized as Indonesia’s largest telecommunications conglomerate, currently operates 28 data centers, comprising 23 within the country and five abroad, as outlined in its 2022 annual report. Notable competitors in this domain include DCI Indonesia, Princeton DG, and NTT Communication.

The surge in demand for infrastructure assets, such as data centers, across Southeast Asia has been notable in recent years, buoyed by the region’s growth prospects and the sector’s reputation for delivering stable and long-term returns.

In September, investment firm KKR acquired a 20 percent stake in Singapore Telecommunications’  regional data center business for S$1.1 billion ($818 million), underscoring the investor interest in this sector.