Singapore-headquartered data centre operator Digital Edge has acquired a controlling stake in PT Indointernet Tbk – Indonet – one of the leading digital infrastructure service providers in Indonesia.
The US$165 million investment, accomplished via the Stonepeak Infrastructure Partner-backed data centre operator’s Digital Edge (Hong Kong) subsidiary, sees Digital Edge become the single largest shareholder in Indonet.
Indonet is a facilities-based carrier that owns substantial self-built fibre assets in the Jakarta metro area and provides a full suite of internet connectivity, local loop, cloud access and colocation services.
The company, through one of its subsidiaries, recently commissioned the EDGE1 data centre at Jalan Kuningan Barat, which is, according to Digital Edge, the most carrier dense area in Jakarta, bringing additional capacity to what is considered a strategic location.
“This strategic partnership marks our initial entry into Southeast Asia,” said Samuel Lee, Digital Edge CEO. “It enables Digital Edge to meet the pressing needs of new customers wanting to deploy into Indonesia and also to offer Indonesian firms a strong regional platform to expand outside of the country."
“Pak Toto [Toto Sugiri, founder and chairman of Indonet] and the Indonet team have done a fantastic job in building a diverse and innovative business. With our good standing relationship with Pak Toto and his team, Indonet is a natural fit for Digital Edge and we are extremely pleased with this partnership,” he added.
According to Digital Edge COO Andy Rigoli, Digital Edge has witnessed the growth and transformation of Indonesia’s telecommunications, internet and data centre industries for well over a decade, suggesting that Indonet will be a good entry point for the company into the market.
“With its full suite of telecom licences, extensive dark fibre assets, network services and central location of its EDGE1 data centre, Indonet will enable Digital Edge to develop sophisticated solutions for its interconnect-focused customers, such as network, cloud and financial service customers,” Rigoli said.
“Moreover, with the recent opening up of the foreign ownership restrictions in the telecommunications industry, Indonet is well-positioned to become the service provider of choice for foreign telcos looking to expand their regional and global footprints into Indonesia,” he added.
The deal comes at a time when Indonesia’s growing digital economy is accelerating enterprise cloud adoption which, in turn, is driving demand for colocation and new data centres.
“The Digital Edge team understands the culture and complexities of operating in Indonesia,” Sugiri said. “I am excited about this partnership given Digital Edge’s unique combination of technical knowledge on data centre design, relationship with regional and global customers, and access to capital."
“Together with Digital Edge, Indonet is best placed to capitalise on the market growth of Indonesia. In fact, we are already looking at the next round of expansion projects,” he added.
Digital Edge is a relatively new entity. It was revealed in August last year that US-based Stonepeak Infrastructure Partners, an infrastructure-focused private equity firm, and a group of senior executives formerly with Equinix, Facebook, Tata Communications and Macquarie, had formed Digital Edge as a “diversified, independent data centre platform”.
The new entity has deep pockets. Stonepeak, its investors and the Digital Edge management team together made a US$1 billion equity capital commitment to the platform.
With its headquarters in Singapore, Digital Edge is led by Lee, who previously served as president of Equinix’s Asia Pacific business from 2005 to 2019, and aims to deliver innovative data centre and interconnect solutions in order to make customer deployments easy in complex, evolving environments.
In April, the company revealed it had snapped up two data centres in South Korea in a major deal with Sejong Telecom, one of the country’s largest telco carriers.