Indonesia’s telecommunications sector enters the next phase of sustainable growth and strategic transformation

Jakarta, 29 June 2026 — Indonesia's telecommunications sector continues to demonstrate strong fundamentals, underpinned by one of the largest customer bases in Southeast Asia and sustained growth in data consumption. Total telecommunications service revenue reached an estimated USD17–18 billion in 2025¹, with mobile services remaining the dominant revenue driver, contributing close to 60% of total industry revenue, or approximately USD10–11 billion². The market is supported by over 350 million active cellular connections as of early 2025, equivalent to a penetration exceeding 120%, reflecting widespread multi-SIM ownership³. Looking ahead, the sector is expected to maintain a mid-single-digit CAGR through to 2030, driven by ongoing network expansion, rising data usage per subscriber, and sustained growth in fixed broadband penetration. Within this, fixed broadband continues to emerge as a resilient growth segment, supported by rising household adoption and increasing demand for high-capacity and reliable connectivity.

"Indonesia's telecommunications sector is at a pivotal inflection point. While connectivity remains its foundation, based on insights from our recent publication, Indonesia Telecommunications Sector Overview and Market Update, the real opportunity lies in how the industry evolves to enable and capture value from the broader digital ecosystem," said Abdullah Azis, PwC Indonesia Telecommunications, Media, and Technology Leader. "Strengthening domestic capabilities and aligning with an increasingly sophisticated regulatory landscape will be critical to unlocking sustainable, long-term growth."

Despite these strong fundamentals, the sector is entering a more mature and structurally complex phase. Revenue growth remains largely volume-driven, while Average Revenue Per User (ARPU) continues to face pressure amid intense competition and flat pricing dynamics. At the same time, 4G continues to serve as the commercial backbone of nationwide connectivity, while fixed broadband adoption is gradually increasing as households demand more stable and higher-capacity connections. 5G deployment is progressing selectively across urban centres, industrial zones, and enterprise-driven use cases. Recent industry consolidation has further reshaped the competitive landscape, placing greater emphasis on efficiency, capital discipline, and long-term value creation.

Abdullah Azis added, “At a broader structural level, Indonesia continues to rely heavily on foreign technology across multiple layers of its digital infrastructure, from semiconductors and cloud systems to artificial intelligence (AI) and cybersecurity. As a result, Indonesia's role in the global technology landscape has largely been that of an adopter rather than a producer of core technologies. This dynamic means a substantial share of economic value, spanning intellectual property, platform economics, and recurring digital revenues, continues to flow offshore rather than being retained domestically.”

This pattern extends across the wider digital economy, where many businesses operate on global platforms shaped by external pricing structures, algorithms, and policy frameworks. While Indonesia's digital economy continues to expand, much of the highest-value activity is captured offshore. Without deliberate intervention, this gap between Indonesia and technology-producing nations risks widening over time, highlighting a critical inflection point for the industry.

From a regulatory perspective, Indonesia's telecommunications and Information and Communication Technology (ICT) landscape continues to evolve in tandem with these shifts. Spectrum reforms are being introduced to support 4G and 5G expansion, alongside tighter device certification requirements and the planned rollout of biometric SIM registration in 2026. At the same time, broader regulatory frameworks covering personal data protection, cybersecurity, and AI are maturing, with the Personal Data Protection (PDP) Law forming a key compliance foundation. On the fiscal side, the introduction of Minister of Finance Regulation No. 1 of 2026 (PMK 1/2026) has provided greater tax certainty for qualifying restructuring transactions through the fiscal book value facility, helping operators execute consolidation and asset optimisation more efficiently.

To conclude, Abdullah Azis said, “Against this backdrop, the next phase of growth will require the telecommunications sector to move beyond connectivity and play a more strategic role in enabling and capturing value within the digital ecosystem. This includes accelerating expansion into higher-value digital services such as cloud, cybersecurity, AI, and Internet of Things (IoT), while accelerating fixed broadband expansion, strengthening fixed–mobile convergence, and improving overall network quality nationwide. More importantly, there is a growing imperative to build domestic technological capability, progressively shifting from technology adoption towards greater participation in the development, ownership, and innovation of core digital platforms.”

Footnote

^1,2: EMIS. (2025). Indonesia Telecommunications Sector Report 2025 – 2026. EMIS Insights – Indonesia Telecommunications Sector Report 2025-2026 

³: Data Reportal. (2025). Digital 2025: Indonesia