Digital adoption in Indonesia is on the rise, with more than half of the population now connected to the internet. This represents a significant jump from last year when only 80% of the population had access to online services. The growth over the past two years has been driven by smartphones and mobile internet connections, which have become much more affordable for people across the income spectrum.
The Millennial Drives Digital Adoption in Indonesia
In their 20s and 30s, the Millennial generation will account for 33% of Indonesia’s population by 2022. Millennials are driving the country’s digital adoption, as they are more likely to use technology and the internet than older generations. The Millennials were born into the digital age, having grown up with computers and cellphones, whereas their parents had to adapt to technology.
According to a recent study by UNICEF and the Ministry of Communication and Informatics, Millennials are driving digital adoption in Indonesia. The study reported that more than half of all Indonesian millennials own smartphones, a percentage expected to grow as they age into the next decade.
Although Indonesia has the lowest smartphone ownership rate of any country in Southeast Asia, a shift in public opinion has brought digital adoption rates to what some believe will be the highest level in ten years.
The Millennials’ use of technology results from greater access to information, which has positively impacted their education levels. In 2022, there were 210 million internet users in Indonesia. This large number of internet users has led to the widespread availability of digital content in news, media, marketing, and entertainment.
Connecting with friends and family via social media is a significant part of the appeal of buying smartphones. However, most Indonesians still need internet access at home or work. It puts a considerable damper on people’s ability to use these features on their devices.
Indonesia Internet User Penetration
Internet user statistics in Indonesia show an increase in internet users, and adoption will continue to grow through 2022. Indonesia’s government has taken various steps to make broadband and mobile internet access more affordable and accessible.
In 2016, the country’s communications ministry formulated a $9 billion plan to build more than 3.5 million kilometers of fiber optic cable infrastructure by 2022. Such techniques have been implemented in other countries before, usually with the help of private companies. In Indonesia, the government is this infrastructure’s chief investor and operator.
The widespread availability of fiber optic internet will increase adoption in many ways. A large percentage of people in Indonesia do not own computers, but this is likely to change as methods for accessing the internet on mobile devices are made more accessible and less expensive over time. Mobile data prices are expected to decline significantly by 2022 as well.
By investing so heavily in high-speed internet infrastructure and making it available to more people, Indonesia’s government aims to take advantage of future opportunities related to e-commerce and e-government that may result from a higher digital adoption rate among its citizens.
In June 2018, Google announced a partnership with Indonesia’s Ministry of Communication and Information (Kementerian Komunikasi dan Informatika) to roll out free WiFi hotspots nationwide by 2022. The program will cover 100% of public areas in Indonesia’s 28 provinces and is predicted to reach 80% of all households by that time.
In Indonesia, with a population of 270 people, the majority are already using the internet. The latest data shows Indonesia’s internal users hit 230 million people. They use the internet to play games, social media, work, study and school, entertainment, shop, and invest in the stock market.
A Growing Demand in a Data Center Industry
The growing internet and social media connectivity have enabled businesses to connect with customers in a new way, leading to the rise of e-commerce and ride-sharing apps. As consumers gain more access to the internet and mobile devices, they are more likely to conduct more financial transactions online, which was previously uncommon in Indonesia.
The data center industry is always rapidly evolving due to the nature of companies’ demands for more data storage. In recent years, cloud computing has been a significant driver in this demand. However, with the growing number of internet users in Indonesia and the shift toward mobile computing, and the proliferation of smartphones, companies are now turning to data centers to ensure the appropriate amount of space dedicated to storage.
Despite this tremendous growth rate, Indonesia still has plenty of potential for further development. The country’s leading providers of mobile broadband services recently announced that they would be upgrading their infrastructure to support 5G by 2023. Once in place, this will create an even greater need for data centers and could trigger further development in Indonesia—the growing demand for these facilities has already been visible in recent years.
Strong demand from Indonesian consumers will continue to drive capital equipment investments in data centers, which are needed to support the operations of e-commerce platforms, mobile apps, and cloud services. Data center operators will look to build and acquire a more flexible infrastructure that can handle the ever-increasing traffic demands for video streaming services.
As a result, data center operator groups will look to expand their stable assets overseas. The appeal of Indonesia’s growing economy will likely lead data center operators to enter into partnerships with local companies or form joint ventures with local partners to deliver their services in Indonesia.
From 2012 to 2022, the number of internet users in Indonesia increased by 5.8 percent each year, reaching a total of 122 million by 2022. Digital adoption rates are projected to reach 80 percent in 2022, up from 63 percent.
Digitally adopting Indonesia has been a popular trend among smartphone-obsessed Westerners for the past five years. Tech giants like Apple, Google, and Samsung have made it known that they’re eyeing the country as their next big market, and many new apps have been developed to cater specifically to Indonesian users.
Despite the growth of Indonesia’s economy, which is expected to overtake Japan’s GDP by 2022, the country and its people still lack access to essential utilities. Current data centers in Indonesia account for nearly 90% of the country’s carbon emissions. It has driven companies to seek greener practices and implement more eco-friendly means of data storage.