Indonesia’s three priority areas for strengthening its digital infrastructure

Indonesia’s digital economy and artificial intelligence (AI) adoption are growing fast, but the opportunity hinges on infrastructure.

The country will need enough computing power, data storage, and data exchange capacity to meet the rising demand. 

Ministry of Communication and Digital (Komdigi)'s Director of Digital Infrastructure Strategy and Policy, Denny Setiawan, says the government is strengthening different types of infrastructure in an integrated manner to keep pace with technological developments.  

“Digital infrastructure today is not just about satellites or mobile networks. With AI adoption accelerating, we need to strengthen all types of infrastructure,” Setiawan says.  

The government’s first priority area is to increase computing capacity and data centre investments.

Building these facilities requires more than only land. It also depends on reliable electricity and water supplies, connectivity, transport access, and an adequate workforce.  

Setiawan identifies Batam, Jakarta and Karawang in West Java as promising locations for data centre development. Central Java, East Java, Makassar, Bali, and the new capital, Nusantara (IKN), are also emerging as potential locations.  

To attract investment, the central government, local authorities and businesses need to coordinate efforts to prepare fibre networks, submarine cables, electricity supplies, land and permits.  

“Investments need to be targeted, transparent and seamless. The government needs to provide certainty from the outset so that investors can come in,” he notes.  

He also notes that data centres do not always need to be built at hyperscale. The government should also consider facilities that match the computing needs and characteristics of each region.  

“Not everything needs to be hyperscale. We can use edge computing or mini data centres to serve the needs of specific regions,” Setiawan says. 

He adds that Indonesia’s operational data centre capacity has grown to around 580MW, with investors considering a further 1.3GW in expansion projects, according to figures announced by the government in July 2026. 

Extending capacity to the regions  

Another priority area for the government is to extend connectivity across the country and ensure that all citizens can benefit from digital infrastructure.

Setiawan says expanding network capacity is a priority. Mobile network speeds depend not only on 4G or 5G technology, but also on the infrastructure that carries data traffic behind the scenes.  

“In the AI era, we cannot rely on 4G or 5G alone. The backbone and backhaul need to use fibre so that 5G does not feel like 2G,” he says.  

Fibre networks provide the capacity to carry large volumes of data, while satellites reach areas that are difficult to serve through terrestrial networks.  

Indonesia needs to combine these technologies according to the needs and geographical conditions of each region.  

However, digital infrastructure readiness varies between major economic centres and other parts of the country.  

Large cities have relatively developed digital ecosystems, while second- and third-tier cities, along with several areas outside Java, continue to face limitations in fibre connectivity.  

Being covered by a signal doesn’t mean the network can handle the load. An area may have internet access, but its existing connectivity may not be able to meet growing data demands.  

Setiawan says the government aims to extend  fibre-optic network coverage to 90 per cent of sub-districts, up from 79.63 per cent in December 2025.  

“The remaining 20 per cent are more challenging. Most are in hard-to-reach locations and require further intervention,” he says.  

Strengthening international connectivity  

At the same time, the integration of ASEAN’s digital economy requires Indonesia to strengthen its international connectivity.

Setiawan says most of Indonesia’s digital traffic still passes through Singapore.  

Although the country already has direct connections with neighbouring countries, their capacity remains limited.  

“Around 90 per cent of our digital traffic still passes through Singapore. We already have a direct connection to Malaysia, but its capacity is not yet significant,” he says.  

Submarine cables are one option for expanding direct connections with other ASEAN countries.  

More diverse connectivity routes can help Indonesia reduce its dependence on particular routes while supporting cross-border data exchange.  

Ensuring network resilience  

The final priority area for the government is to ensure that networks remain resilient and available. Technical failures, natural disasters, cable cuts, and cyberattacks can disrupt services and economic activity.

Setiawan says Komdigi has discussed the protection of critical information infrastructure (CII) with the National Cyber and Crypto Agency (BSSN) and the Coordinating Ministry for Political and Security Affairs. These efforts cover both digital systems and physical infrastructure.  

Beyond security measures, operators need procedures for responding to incidents and restoring services. Infrastructure resilience depends not only on the ability to prevent disruptions, but also on how quickly services can be restored when incidents occur.  

“Standard operating procedures need to be clear to speed up recovery. They must specify what to do when an attack or disaster occurs,” he adds.  

One approach, he says, is to provide alternative connectivity routes so that networks do not depend entirely on a single path.  

“We need redundancy. If one route is cut off, traffic can be redirected through another,” he says.  

However, Setiawan emphasises that the success of infrastructure development cannot be measured solely by increases in network coverage or data centre capacity.  

Infrastructure must also reach more regions, ensure that no communities are left behind, and create economic value for the people it serves.