Singapore-based Digital Edge has paid $165 million to acquire a controlling interest and become the largest shareholder in data centre operator PT Indointernet Tbk.
The investment in the Indonesian firm, known as Indonet for short, brings Digital Edge’s regional portfolio to seven data centres across three countries after most recently adding two assets each in Japan and South Korea.
Founded by entrepreneur Toto Sugiri, Indonet is a fully licensed, facilities-based carrier that owns significant self-built fibre assets in the Jakarta metro area and offers internet connectivity, local loop, cloud access and co-location services, according to a Tuesday press release issued by Digital Edge, which is backed by New York’s Stonepeak Infrastructure Partners.
“This strategic partnership marks our initial entry into Southeast Asia,” said Digital Edge chief executive Samuel Lee. “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.”
Ramping Up Capacity
Digital Edge said Indonet recently commissioned the EDGE1 data centre with 1,500 cabinets at Jalan Kuningan Barat, the most carrier-dense area in Jakarta, boosting capacity in the commercial hub.
“The Digital Edge team understands the culture and complexities of operating in Indonesia,” said Toto, Indonet’s chairman. “I am excited about this partnership given Digital Edge’s unique combination of technical knowledge on data centre design, relationship with regional and global customers, and access to capital.”
Jakarta’s co-location market is expected to reach $625 million by 2025, achieving a compound annual growth rate of 23.7 percent from 2021 and 2025, Digital Edge said, citing statistics from data centre consultancy Structure Research. The combination of Indonesia’s rapidly growing digital economy, accelerating enterprise cloud adoption and the proliferation of startup companies is driving demand for co-location and new data centres, the Singaporean firm said.
Stonepeak joined with Digital Edge’s management and a set of unnamed investors to commit $1 billion in equity to the new Digital Edge platform last year, aiming to catch some of the potential of the Asia Pacific market after having acquired a majority interest in US co-location provider Cologix in 2017.
On the day of its August debut, Digital Edge announced the closing of two Japan investments: a partnership with Keihanshin Building and Kanden Energy Solutions to develop a 12MW data centre in Osaka (scheduled to open in the first quarter of 2022) and a strategic partnership with Itochu Techno-Solutions on the Mejirozaka Data Center in Tokyo.
Cushman & Wakefield’s latest global market comparison identified Jakarta as a fast-growing regional hub for co-location data centres, with a sizeable development pipeline.
In April, the cloud unit of Chinese tech giant Tencent announced the launch of its first Indonesian internet data centre in Jakarta’s CBD. The facility is already fully operational, Tencent Cloud said.
In May, a unit of Singaporean tech firm ST Telemedia revealed that it was joining forces with its owner, state holding company Temasek, and Indonesian conglomerate Triputra Group to develop a data centre operating platform in Jakarta. The joint venture will build its first data centre campus at Greenland International Industrial Center in Kota Deltamas, a township east of the Indonesian capital, with up to 72 megawatts of critical IT capacity.
Dutch consultancy Arcadis’s 2021 index of the most attractive places to build data centres placed Indonesia at 35th in the world, between Turkey and Iceland.