Telecommunication Industry in Indonesia: Outlook and Opportunities

Indonesia’s telecommunication industry is thriving as one of the largest and most dynamic markets in Southeast Asia. With rapid digital adoption and growing demand for connectivity, the sector offers vast opportunities for investment, innovation, and growth.

Also read: Major Industries in Indonesia (Based on Contribution to GDP)

Indonesia Telecommunication Industry Outlook

Indonesia’s telecommunication industry is among the largest in Southeast Asia, serving over 230 million mobile internet users as of 2022. The sector contributed more than 800 trillion IDR to the national GDP, underscoring its critical role in the country’s economy.

With a vast archipelago of over 17,000 islands, Indonesia’s telecommunication infrastructure has become the backbone of connectivity. The country boasts more than 100,000 mobile towers, with 4G networks covering 94% of cities. While 5G infrastructure is still in its infancy, the government’s ambitious Palapa Ring project is expected to bridge connectivity gaps by expanding undersea and terrestrial networks.

By 2030, 5G is projected to contribute over USD 41 billion to Indonesia’s GDP. However, challenges like spectrum shortages and slower 5G rollout compared to neighboring countries remain significant hurdles.

Telecommunication Business Opportunities in Indonesia

Indonesia’s telecommunication market, valued at USD 18.12 billion in 2025, is anticipated to reach USD 23.97 billion by 2030, growing at a CAGR of 5.76%. The sector’s growth is fueled by:

1. Digital Economy Expansion: Increased demand for high-speed internet and digital services.
2. 5G Infrastructure Development: New opportunities in B2B 5G solutions for industries like manufacturing and media.
3. Over-the-Top (OTT) Services: Platforms like Vidio and international players continue to gain traction.
4. Local Telecommunication Products: The government encourages domestic production to boost competitiveness and self-reliance.

The steady rise of smartphone adoption and internet penetration makes Indonesia a lucrative market for telecommunication investments.

Also read: Indonesia’s Positive Investment List: Opportunities for Investors

Indonesia Telecommunication Business Regulation

Indonesia’s regulatory framework promotes free competition and openness to foreign investment. The Ministry of Communication and Informatics oversees the industry, ensuring fair spectrum allocation and fostering a conducive environment for innovation.

Key regulations include:

• Law Number 36 Year 1999 on Telecommunication
• Law No. 25 of 2009 on Public Services
• Law No. 6 of 2023 on Job Creation

These regulations aim to balance industry competitiveness with the need for technological advancement.

Also read: Indonesia Investment Incentives: Government Support for Foreign Businesses

Leading Telecommunication Companies in Indonesia

Indonesia’s telecommunication sector is dominated by key players such as:

1. Telkomsel: Market leader with a 49.5% share in mobile networks.
2. Indosat Ooredoo Hutchison: Known for competitive pricing and 1.8 GHz 5G services.
3. XL Axiata: Focused on affordable data packages and improved network quality.
4. Smartfren: Offers innovative data plans targeting younger audiences.
5. Astro Indonesia Holdings: A growing player in fixed-line services.

These companies continuously adapt to consumer demands for affordable and high-speed connectivity, despite challenges like regulatory costs and competition.

Also read: 16 Top Multinational Companies in Indonesia

How to Start a Telecommunication Company in Indonesia

Starting a telecommunication business in Indonesia requires:

1. Understanding Market Needs: Focus on mobile internet and OTT services, as these are the most in-demand.
2. Navigating Regulations: Comply with spectrum allocation rules and local content policies.
3. Building Infrastructure: Invest in mobile towers, fiber-optic networks, or data centers.
4. Securing Funding: Collaborate with local and international investors to support CAPEX-intensive projects.
5. Obtaining Licenses: Register with the Ministry of Communication and Informatics and other relevant authorities.

Indonesia’s vast market and supportive government policies provide ample opportunities for new entrants, particularly in underserved regions.

Also read: Can a Foreigner Own 100% of a Business in Indonesia?

Indonesia’s telecommunication industry is a cornerstone of the nation’s digital transformation, offering vast opportunities for growth and innovation. From 5G infrastructure to OTT services, the sector is poised for substantial development. While challenges like spectrum shortages persist, the government’s commitment to fostering a robust digital economy makes this a promising market for investors and entrepreneurs alike.

If you are considering starting a telecommunication business in Indonesia, there are a number of resources and support services available to help you get started.

InvestinAsia is among the companies that specialize in aiding you with Indonesia company registration. We boast a team of seasoned experts who can guide you throughout the process of:

• Foreign company / PMA registration in Indonesia
• Indonesia representative office registration
• PT PMDN Set Up
• Virtual office setup in Indonesia
• Business registration number in Indonesia
• Indonesian Business Licenses
• Indonesia Trademark Registration

If you are interested in starting a business in Indonesia, you can start by contacting us for FREE consultation.

Sources:

• Directorate of Telecommunications, Ministry of Communication and Information of the Republic of Indonesia
• Statista
• Mordor Intelligence