TLKM - DC biz consolidation concluded by year-end

Telekomunikasi Indonesia (TLKM) eyes consolidation of its data center asset to be concluded by the end of the year under Telkom Data Ekosistem (TDE). Meanwhile, the company is planning to add tier III and IV data center compounds with the most recent is located in Batam that is targeted to complete by 2024. (Source : Bisnis Indonesia) Comment : We view that data center asset consolidation is important to spur growth amid strong potential demand in the future. 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 data center market share. With strong partnership and infrastructure support, we believe TLKM will be able to expand its market share as it aims to build more DCs with oning projects include Hyperscale DCs in Batam and as well as capacity expansion in its exisiting locations.