This week, Digital Edge, the Singapore-based data center provider backed by $37 billion U.S. private equity investor Stonepeak Infrastructure Partners, announced that its wholly owned Hong Kong-based subsidiary has acquired a controlling interest in one of Indonesia’s leading digital infrastructure service providers in Indonesia, PT Indointernet (Indonet). Digital Edge paid $165 million for its stake in Indonet, making it the company’s single-largest shareholder.
Indonet is a fully licensed facilities-based carrier that owns significant self-built fiber assets in the Jakarta metro area and offers a full suite of Internet connectivity, local loop, cloud access, and colocation services. Indonet, through one of its subsidiaries, recently commissioned an EDGE1 data center with 1,500 cabs at Jalan Kuningan Barat, the most carrier dense area in Jakarta, bringing much needed capacity to this strategic location.
“This strategic partnership marks our initial entry into Southeast Asia. It enables Digital Edge to meet the pressing needs of new customers wanting to deploy into Indonesia, and also to offer Indonesian firms a strong regional platform to expand outside of the country,” said Digital Edge Chief Executive Officer Samuel Lee, calling IndoNet
“The Digital Edge team understands the culture and complexities of operating in Indonesia. I am excited about this partnership given Digital Edge’s unique combination of technical knowledge on data center design, relationship with regional and global customers, and access to capital. Together with Digital Edge, Indonet is best placed to capitalize on the market growth of Indonesia. In fact, we are already looking at the next round of expansion projects,” said Toto Sugiri, Founder and Chairman of Indonet.
According to data from Structure Research provided by Digital Edge, Jakarta’s colocation market is expected to reach USD 625 million by 2025, growing at a CAGR of 23.7 percent between 2021 and 2025. The combination of Indonesia’s rapidly growing digital economy, accelerating enterprise cloud adoption and the proliferation of start-up companies, is driving this demand for colocation and new data centres.
“The Digital Edge team has personally witnessed the tremendous growth and transformation of Indonesia’s telecom, Internet and data center industries for well over a decade,” Digital Edge Chief Operating Officer Andy Rigoli said “With its full suite of telecom licenses, extensive dark fiber assets, network services and central location of its EDGE1 data center, Indonet will enable Digital Edge to develop sophisticated solutions for its interconnect-focused customers, such as network, cloud, and financial service customers.”
In March of this year, the Indonesian government published Presidential Regulation No. 10 of 2021, establishing (or, in some cases, lifting) foreign investment restrictions for several Indonesian sectors. The move has opened up Indonesia telecommunications sector to 100 percent foreign ownership (compared to a previous maximum restriction of 67 percent), a development welcomed by Digital Edge.
“Indonet is well positioned to become the service provider of choice for foreign telcos looking to expand their regional and global footprints into Indonesia,” Rigoli said.
And a push in Japan
Last month, Digital Edge announced the acquisition of two data centers in Tokyo from Japan’s ARTERIA Networks. The investment marked Digital Edge’s third project to date in Japan, whose public cloud services market is expected to grow by nearly 19 percent annually by 2024 to $26.4 billion, driven by direct private and public investment in ICT infrastructure, as well as the Japanese government’s stated commitment to cloud services.
At the time the investment was announced, Digital Edge said it is still “actively evaluating” a number of additional investments and potential partnerships to further expand its digital infrastructure platform in Japan.
