Singtel, Indonesia’s Telkom Team Up to Build and Acquire SE Asia Data Centres

Singtel has signed a memorandum of understanding with longtime partner Telkom Indonesia to expand the Singaporean giant’s data centre footprint in ASEAN, where the region’s fast-growing server-hosting market is attracting international investors and developers.

Under the agreement, Singtel and Jakarta-based Telkom will capture growth opportunities arising from digitalisation and cloud adoption in Southeast Asia by establishing a platform that will work with partners to build and acquire data centres in the region, Temasek-controlled Singtel said last Thursday in a release.

Telkom has an existing portfolio of 27 data centres in Indonesia and the region. Selected data centre assets from the portfolio will be placed in the platform with Singtel, and the companies will also collaborate on development of new projects and explore opportunities for third-party investors and partners to participate in the platform.

“As the largest digital economy in ASEAN, Indonesia is a strategic data centre market which expands our platform’s footprint to cover the three fastest-growing locations in the region — Indonesia, Singapore and Thailand,” said Singtel group CEO Yuen Kuan Moon. “The platform will support the digital transformation needs of customers wanting to deploy into Indonesia, and Indonesian businesses looking to grow beyond the country.”

Partnership Deepens

The new platform, first teased last October, builds on the more than 20-year relationship between Telkom and Singtel, which holds a 35 percent stake in Telkom’s mobile unit Telkomsel. The partners announced Thursday that they would jointly explore a convergence strategy for Telkomsel that would see the mobile business integrated with Telkom’s consumer fixed broadband business.

“Telkom Group is currently consolidating our data centre business to answer the challenges of digital transformation,” said Telkom CEO Ririek Adriansyah. “The regional data centre platform is a continuation of this data centre consolidation strategy and demonstrates our commitment to respond to customer needs and capture opportunities that will pave the way for our company to become a data centre player on a global level.”

Singtel has been expanding its digital infrastructure business at home, with the firm noting in its most recent announcement that it had carved out its DC West and Kim Chuan 2 data centres into a separate entity with 60 megawatts of capacity. The telecom group also continues to develop a site in western Singapore’s Tuas planning area for an undersea cable landing and data centre facility that will be ready within four years and add 30-40MW of capacity.

In Indonesia, Telkom is also expanding its digital backbone, with the company currently building a data centre with 75MW capacity to serve local and foreign companies and hyperscalers. The facility east of Jakarta will accommodate up to 10,000 racks while minimising emissions by using a combination of gas-fired power plants and solar panels to power its public areas and offices, according to the state-owned group.

Regional Platforms Multiply

The latest deal comes after Singtel in February signed a joint agreement with Bangkok-based Gulf Energy and local wireless operator AIS to develop data centres in Thailand, bringing AIS into a previously announced partnership. Infrastructure firm Gulf is the largest shareholder of AIS parent Intouch, in which Singtel also holds a sizable stake.

Last July, Hong Kong’s Gaw Capital Partners launched a Singapore-based joint venture company, Data Center First, with a project in the nearby Indonesian city of Batam. Led by industry veteran Wong Ka Vin, the platform will originate, evaluate and develop projects in Southeast Asia and beyond.

Also in mid-2021, Australian developer Logos partnered with the UK’s Pure Data Centres to begin developing a 20MW hyperscale facility in Jakarta, while Singtel’s Temasek stablemate ST Telemedia joined forces with its parent firm and Indonesian conglomerate Triputra Group to develop a data centre operating platform in Jakarta.