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Promising Prospects For Indonesian Data Centers, Regulations And Licensing Are Challenges

The Indonesian Data Center Provider Association (IDPRO) assessed that the national data center industry is showing promising growth, but is still lagging behind neighboring countries in terms of capacity and regional competitiveness. The General Chairperson of the Indonesian Data Center Provider Organization (IDPRO) (IDPRO) Hendra Kusuma explained that the growth of the Indonesian data center and cloud market is in the range of 14% -20% per year. However, unfortunately, he continued, related to ASEAN competitiveness, Indonesia is still far behind in terms of data capacity. Currently, said Hendra, the total data center power capacity in Indonesia has only reached 500 megawatts, far below Malaysia and Singapore, which have each reached 1.5 gigawatts. In fact, Indonesia has ideal demographic and geographical advantages with internet penetration reaching 77% and the largest data traffic volume in the region. 

"The irony is, we have the most internet users, the largest digital economy, but our data center capacity is actually small," he explained to Bisnis, quoted on Sunday (8/6/2025). 

He reiterated Indonesia's large strategic geographic potential to become a data center hub in the Asia Pacific region. However, in fact, he said, many investors choose to enter other countries because the licensing process, laws and regulations, and fiscal incentives are greater. One of the root problems, he said, is that regulations have not been sufficient to attract investor interest. After the relaxation of PP No. 82/2012 on the Implementation of Electronic Systems and Transactions to PP 71/2019, personal data is allowed to be stored abroad. This raises concerns about digital sovereignty because many cases of data theft have arisen. 

According to him, currently, the existence of the Personal Data Protection Law (UU PDP) in 2022 is indeed a step forward, but the supervisory institution promised in the law has not yet been formed. In addition, IDPRO noted major obstacles in licensing and basic infrastructure. According to him, building a data center outside the industrial area is still very complicated, but the energy and connectivity infrastructure in eastern Indonesia is inadequate. Not only that, another challenge is the lack of experts. The data center industry is growing rapidly, but the supply of digital talent is not comparable. 

Tag: Hendra Kusuma IDPRO Indonesian Data Centers