Indonesia ICT Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 45.20 Billion |
| Market Size (2029) | USD 67.56 Billion |
| CAGR (2024 - 2029) | 8.20 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Indonesia ICT Market Analysis
The Indonesia ICT Market size is estimated at USD 45.20 billion in 2024, and is expected to reach USD 67.56 billion by 2029, growing at a CAGR of 8.20% during the forecast period (2024-2029).
- Due to its developing ICT infrastructure, Indonesia is expected to become more prepared for the digital era and is projected to be one of the most promising ICT markets in Southeast Asia.
- The market's growth can be attributed to the development of fixed and mobile network infrastructure in the country, in line with the growth of digitalization strategies by businesses to offer online platform-based services. These strategies are fueling the demand for ICT services, including data services, in the enterprises and consumer segments in Indonesia.
- The growth of cloud computing services and cloud-based SaaS adoptions and the emergence of AI and digital data monetization in the enterprises in the country are supporting the demand for high-speed and low-latency telecommunication services. For instance, in April 2024, Nvidia and Indonesia's telco firm PT Indosat Ooredoo Hutchison announced their plan to build an artificial intelligence center in Central Java in 2024 with an investment of USD 200 million, showing the market demand for digital technologies in the country. This initiative is expected to create demand for internet services in Indonesia and support market growth.
- However, Indonesia's tech market is witnessing a need for more skilled human resources. According to a World Bank Report, the nation's technology graduates frequently fall short of the industry norm, and there will be a shortage of 9 million ICT professionals between 2015 and 2030. Also, internet and technology businesses require better facilities in terms of quantity and quality. There is now a gap in Indonesia's infrastructure for both internet and energy.
- According to the chief economist of the Economist Intelligence Unit, Indonesia is a desirable location for investments in digital technology as it is the largest market in Southeast Asia. Many digital powerhouses are constructing data centers in the country due to the potential of cloud business. As a result, cloud computing would offer a wide range of advantages that are consistent with its operations and objectives. The government announced its plans to facilitate cloud computing through further regulation because it recognizes the significance of cloud migration in the nation's transition to a digital economy.
- Indonesia is anticipated to lead Asia-Pacific in IT spending over the next four years, backed by a noteworthy shift toward cloud-related facilities as the COVID-19 pandemic forced resident businesses to digitalize their operations. Since the start of the pandemic, the Internet of Things improved the commercial landscape in Indonesia. The pandemic elevated the demand for cloud services in Indonesia because of the mobility restrictions that caused companies to accommodate a remote workforce and meet the flourishing online market.
Indonesia ICT Market Trends
Indonesia Moving Toward Digital Golden Era
- Indonesia is expected to peak in the digital economy in the next couple of years. The acceleration during the COVID-19 pandemic caused the digital industry to develop quickly during the last two years. Not only did the number of people using the internet dramatically rise, but so did societal knowledge of how to use the digital industry as an economic engine even more.
- The Ministry of Communication and Informatics created a Strategy for Digital Indonesia 2021-2024. Digital Infrastructure, digital governance, digital economy, and digital society are the four main focuses of this blueprint. It also describes Indonesia's policy goals, implementation plan, and timeline for digital transformation. Another goal is a more equitable allocation of the digital economy across the regions.
- Indonesia's Ministry of Communication and Informatics (MCI) launched the Roadmap Indonesia Digital 2021-2024 to promote the country's digital transformation. The plan aims to offer the framework and steps needed to attain an equitable level of economic development based on technological advancement, digital connection, and innovation.
- According to the Indonesian Internet Service Providers Association (APJII), internet penetration in Indonesia rose from 78.1% in 2023 to 79.5% in 2024. Furthermore, according to the survey, the internet penetration rate among millennials aged 28–43 was 93.17% at the beginning of 2024. Among Gen Z (aged 12–27), the internet penetration rate stood at 87.02%, while among Gen X (aged 44–59), it was 83.69% during the same period.
- This growing internet penetration in the country has been instrumental in driving market growth in Indonesia, as businesses have been able to reach out to more customers, notably younger demographics. This supports the demand for internet services in the country, creating an opportunity for telecom service providers in the country in the future.
- According to a report by UNCTAD, the digital economy in Indonesia is projected to boost the GDP by USD 150 billion by 2025. The Indonesian government is carrying out noteworthy infrastructure development to attain the goal. The government has undergone numerous national initiatives for digital transformation, including the e-smart IKM and 100 Smart City Movement, supporting market growth.
Emerging Technologies to Bolster the Economy
- Rapid technological advancements in Indonesia are expected to be accompanied by strong economic expansion. In fact, according to the Indonesian Ministry of Finance, adopting new technologies may boost the country's economy by as much as USD 2.8 trillion by 2040. The use of technology, particularly digital, robotics, and automation, is growing in the country and has a significant influence on many industries, including manufacturing, energy, and housing.
- Indonesia is far ahead of others in terms of leveraging the Internet of Things (IoT). IoT hugely influences healthcare spending, industrial productivity, and corporate operating expenses. IoT applications in industries, including manufacturing, agriculture, and natural resources, which account for 50% of Indonesia's GDP, are expected to have the greatest economic impact.
- Smart homes and smartphones are the main drivers of IoT growth in Indonesia. The use of smart gadgets rises dramatically every year, thanks to smart homes. Every residence is projected to have at least five devices to ensure proper operation. The IoT is getting better faster than the number of people using smartphones.
- While this is happening, the ecosystem of physical IoT devices, which includes cars, home appliances, factory robots, and other internet-connected gadgets like sensors, is poised to revolutionize a variety of facets of human lives, from transportation to healthcare. Meanwhile, professionals skilled in AI and machine learning are in high demand in the country, and that need is rising quickly. This cutting-edge technology is used in a wide range of industries, including banking, e-commerce, medicines, melanoma detection, space exploration, and translation.
- Significant investments in 5G and IoT will soon change the connectivity model in Indonesia. By altering the way they function, 5G is expected to impact many industries. For instance, it would advance immersive services like mixed and augmented reality and streaming and gaming services.
- The country’s businesses have been integrating 5G technology in their network infrastructure to support the factory automation trends, creating a growth opportunity for the market in Indonesia. For instance, in March 2024, telecommunications provider Telkomsel and global ICT solutions provider Huawei inaugurated Indonesia's first 5G Smart Warehouse. This facility exhibited the potential of 5G technology to transform warehouse management, boosting operational efficiency and creating new opportunities for the logistics industry to support the digital economy leapfrog toward the Golden Indonesia Vision 2045. These factors are expected to boost market growth over the forecast period.
Indonesia ICT Industry Overview
The Indonesian ICT market is fragmented, as it currently consists of many players. Several key players are constantly striving to make advancements. A few prominent companies are entering into collaborations and expanding their footprints in developing regions to consolidate their positions in the market. The major market players include The International Business Machines Corporation (IBM), NTT Data, Fujitsu, Telkom Indonesia, and Indosat Ooredoo.
- March 2024: The telecommunications provider Telkomsel and global ICT solutions provider Huawei inaugurated Indonesia's first 5G Smart Warehouse. This facility reflected the potential of 5G technology to transform warehouse management, boosting operational efficiency and creating new opportunities for the logistics industry to support the digital economy leapfrog toward the Golden Indonesia Vision 2045.
- March 2024: Vonage, a cloud communications company under Ericsson, partnered with Telkomsel, an Indonesian digital telco, to bolster network capabilities for developers, enterprises, and CSPs via APIs. The collaboration aims to empower developers to craft secure applications, fostering an open innovation ecosystem.
Indonesia ICT Market Leaders
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The International Business Machines Corporation (IBM)
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NTT Data
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Fujitsu
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Telkom Indonesia
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Indosat Ooredoo
*Disclaimer: Major Players sorted in no particular order
Indonesia ICT Market News
- March 2024: At the 2024 World Mobile Congress (MWC), Indosat Ooredoo Hutchison (IOH), an Indonesian satellite telecommunications company, signed a Memorandum of Understanding (MoU) with Huawei Technologies to strengthen Indonesia's digital infrastructure through the development of artificial intelligence (AI). Both companies have agreed to develop AI and industry applications, construct ecosystems, and create talent in the country.
- November 2023: Bank Indonesia and the Monetary Authority of Singapore partnered to launch the cross-border QR payment linkage between Indonesia and Singapore. This linkage would enable customers of participating financial institutions to make cross-border retail payments using their existing mobile banking applications by scanning the QR codes in Indonesia and Singapore, showing the growth of the country's online payment landscape.
Indonesia ICT Market Report - Table of Contents
1. INTRODUCTION
1.1 Market Definition and Scope
1.2 Study Assumptions
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Stakeholder Analysis
4.3 Industry Attractiveness-Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Digital Era is Soon to Start
5.1.2 Robust Demand for Emerging Technologies
5.2 Market Restrain
5.2.1 Shortfall of Skilled Resource
5.3 Assessment of the Impact of COVID-19 on the IT Spending
6. KEY TECHNOLOGY INVESTMENTS
6.1 Cloud Technology
6.2 Artificial Intelligence
6.3 Cyber Security
6.4 Digital Services
7. MARKET SEGMENTATION
7.1 By Type
7.1.1 Hardware
7.1.2 Software
7.1.3 IT Services
7.1.4 Telecommunication Services
7.2 By Size of Enterprise
7.2.1 Small and Medium Enterprises
7.2.2 Large Enterprises
7.3 By Industry Vertical
7.3.1 BFSI
7.3.2 IT and Telecom
7.3.3 Government
7.3.4 Retail and E-commerce
7.3.5 Manufacturing
7.3.6 Energy and Utilities
7.3.7 Other Industry Verticals
8. COMPETITIVE LANDSCAPE
8.1 Company Profiles
8.1.1 The International Business Machines Corporation (IBM)
8.1.2 Tata Consultancy Services (TCS)
8.1.3 Amazon
8.1.4 Oracle Corporation
8.1.5 NTT Data
8.1.6 Wipro Limited
8.1.7 Fujitsu
8.1.8 Apple
8.1.9 Telkom Indonesia
8.1.10 Indosat Ooredoo
8.1.11 XL Axiata
8.1.12 Smartfren Telecom
8.1.13 Tri Indonesia
8.1.14 Net1 Indonesia
- *List Not Exhaustive
9. INVESTMENT ANALYSIS
10. FUTURE OF THE MARKET
Indonesia ICT Industry Segmentation
Information and communications technology, or ICT, is a broader term for information technology (IT). It refers to all communication technologies, such as wireless networks, the internet, computers, cell phones, software, videoconferencing, middleware, social networking, and other media applications and services, which enable users to store, access, transmit, retrieve, and manipulate information in digital form.
The Indonesian ICT market is segmented by type (hardware, software, IT services, and telecommunication services), size of enterprise (small and medium enterprises and large enterprises), and industry vertical (BFSI, IT and telecom, government, retail and e-commerce, manufacturing, energy and utilities, and other industry verticals). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.
| By Type | |
| Hardware | |
| Software | |
| IT Services | |
| Telecommunication Services |
| By Size of Enterprise | |
| Small and Medium Enterprises | |
| Large Enterprises |
| By Industry Vertical | |
| BFSI | |
| IT and Telecom | |
| Government | |
| Retail and E-commerce | |
| Manufacturing | |
| Energy and Utilities | |
| Other Industry Verticals |
Indonesia ICT Market Research FAQs
How big is the Indonesia ICT Market?
The Indonesia ICT Market size is expected to reach USD 45.20 billion in 2024 and grow at a CAGR of 8.20% to reach USD 67.56 billion by 2029.
What is the current Indonesia ICT Market size?
In 2024, the Indonesia ICT Market size is expected to reach USD 45.20 billion.
Who are the key players in Indonesia ICT Market?
The International Business Machines Corporation (IBM), NTT Data, Fujitsu, Telkom Indonesia and Indosat Ooredoo are the major companies operating in the Indonesia ICT Market.
What years does this Indonesia ICT Market cover, and what was the market size in 2023?
In 2023, the Indonesia ICT Market size was estimated at USD 41.49 billion. The report covers the Indonesia ICT Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Indonesia ICT Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What future trends are expected to shape the ICT Market in Indonesia?
Future trends in the Indonesia ICT Industry are a) Increased investment in 5G b) Expansion of fiber-optic networks c) Growing importance of cybersecurity solutions
What future trends are expected to shape the ICT Market in Indonesia?
Future trends in the Indonesia ICT Industry are a) Increased investment in 5G b) Expansion of fiber-optic networks c) Growing importance of cybersecurity solutions
Indonesia ICT Industry Report
The Indonesia ICT industry is witnessing substantial growth, fueled by robust economic development, a youthful, tech-savvy population, and a strong governmental push for digital transformation. This surge is propelled by an increased demand for advanced ICT solutions across sectors like healthcare, fintech, and retail, supported by growing internet penetration and smartphone usage. The market, segmented into hardware, software, IT services, and telecommunication services, caters to various enterprise sizes and industry verticals. Notably, sectors such as manufacturing, retail, and travel and leisure are experiencing significant growth, with the latter poised for the fastest expansion. The diverse range of products and services, including cloud computing, IoT, security, and data analytics, caters to the varied needs of these verticals, driving forward Indonesia's digital economy goals. This vibrant market scenario offers ample opportunities for ICT companies in Indonesia to innovate and broaden their market presence. For detailed statistics on market share, size, and revenue growth rates, and to get a historical overview and market forecast outlook, download a free report PDF sample from Mordor Intelligence™ Industry Reports on the Indonesia ICT industry.
