TLKM - Eyes leadership in Southeast Asia's DC

TLKM - Eyes leadership in Southeast Asia's DC Telekomunikasi Indonesia (TLKM) through its subsidiary Telkom Data Ekosistem (TDE/NeutraDC) is eyeing to achieve leadership in data center market in Southeast Asia by 2025, banking on its strong competitive edges on seamless connection with other TLKM's DCs; integration with the Group's backbone infrastructure and position as market leader in digital market. In addition, demand for data center in Indonesia is projected to skyrocket by eight-times from IDR632 tn in 2020 to IDR4,531 tn by 2030, in line with contribution to the country's GDP from 4% to 18%. (Source : Bisnis Indonesia) Comment : We expect that TLKM's data center business should become a new backbone of growth in the future thanks to its exponential growth potential. Currently, data center remains nascent in the country reflected by very low penetration of c. 12% or at 0.6w/ capita, far cry behind Singapore at 183 w/capita, while internet penetration has reached above 70% of total population, indicating huge untapped potential market. Meanwhile, TLKM is currently holding c. 40% of market share in Indonesia. In addition to that, Singapore that is seen to be the region’s data center proxy is on deceleration given government's tight policy concerning energy consumption post-temporary pause in 2021. With strong partnership and infrastructure support, we believe TLKM will be able to expand its market share overseas. TLKM's data centers currently stand at 30 with 25 of which are located in Indonesia.