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Jakarta Post

Telkom comes up with new expansion plan ... after ministerial reprimand

  • News Desk

    The Jakarta Post

Jakarta   /   Thu, February 27, 2020   /   12:45 pm
Telkom comes up with new expansion plan ... after ministerial reprimand Various cell phone transmitters are installed in one of the skyscrapers in Jakarta, Tuesday (6/12/2014). (JP/ Dhoni Setiawan )

Following criticism from State-Owned Enterprises Minister Eric Thohir that it was not doing enough to tap new business opportunities, Telkom Indonesia announced on Wednesday a new business strategy.

Telkom president Ririek Adriansyah said that the state-owned telecommunications giant would be shifting to digital services, such as digital computing and data centers, as its main source of income and to reduce its reliance on cellular services.

“We will launch a number of new services in the next few months. Our challenge is to transform our services from off-the-shelf products to solution-based software,” Ririek said on Wednesday at the CNBC Indonesia Economic Outlook 2020 discussion in Jakarta.

He added that Telkom would build a data center in East Jakarta as an initial step in the expansion plan, followed by establishing data centers in several regions outside Jakarta.

The cloud computing business showed strong potential amid the rapid pace of digital transformation in the country, Ririek said. He estimated that the Indonesian cloud computing market could reach between US$120 billion and $150 billion by 2024, or around 10 percent of Indonesia's gross domestic product (GDP).

“We will enter what we call the digital platform, for example the data center and then the cloud. Because looking ahead, [the future] of computing is the cloud,” he said.

Earlier this month, SOEs Minister Erick Thohir chastised Telkom for its overreliance on Telkomsel – its cellular services subsidiary that contributes 70 percent of its income. The minister even took a broader swipe at Telkom’s current operations, saying that it would be “better not to have Telkom at all ” if most of its earnings came from the subsidiary.

Erick continued the onslaught, saying that Telkom, with its wide broadband network, should be leading the competition in providing cloud computing services.

Telkom should focus more on big data and cloud computing, Erick added, and he expected Telkom’s cloud services to be on a par with the more established services in other countries, like China's Alibaba Cloud.

Information technology experts of TELKOM, Indonesia's leading telecommunication company, work at the central monitoring section of their headquarters in Jakarta on April 15, 2009. Information technology experts of TELKOM, Indonesia's leading telecommunication company, work at the central monitoring section of their headquarters in Jakarta on April 15, 2009. (AFP/Bay ISMOYO)

Telkom has several digital businesses, including its neuCentrlX multiservice data center operated by subsidiary PT Sigma Cipta Caraka (Telkomsigma). NeuCentrIX operates in 17 locations: 11 in Indonesia, three in Singapore and one in Hong Kong.

Telkom began tapping the domestic cloud services market in August 2018, when it launched Azure Hybrid Cloud and the accompanying Azure Stack Platform in collaboration with PT Microsoft Indonesia. The digital services were developed under Telkomtelstra, a joint venture with Australian telecommunications giant Telstra.

Despite previous attempts, Telkom has yet to see optimum results or to secure a strong position in the cloud computing race in the country, with global tech behemoths touting their service products, like Amazon Web Services and Google Cloud Platform. (ydp)