Digital Edge, an Asia-focused data center platform, backed by Stonepeak Infrastructure, today announced a $165m investment in publicly-traded IndoInternet Tbk PT (IDX: EDGE), known as Indonet, a managed service provider (MSP) and digital infrastructure owner in Jakarta, Indonesia.
As a first step, Digital Edge became Indonet’s single largest shareholder, with a 47% stake in the company, by purchasing 189.9 million shares for Rp10,495 per share, equivalent to Rp1.99tn ($139.8m). Subsequently, Digital Edge purchased a further 48.9 million shares, raising its total ownership in Indonet to 238.8 million shares, equivalent to a 59.1% stake in the company, and thus becoming the controlling shareholder of IndoInternet Tbk.
Notably, Indonet only recently listed itself on the Indonesia Stock Exchange (IDX) on February 8, 2021. However, the company is now subject to a mandatory tender offer from Digital Edge as part of Indonesia’s takeover regulations. Specifically, the mandatory tender offer encompasses all of the company’s shares owned by public shareholders, excluding those already owned by Digital Edge.
Indonet – Digital Edge’s Entry into Indonesia
Indonet is a facilities-based carrier that owns significant fiber infrastructure in the Jakarta metro area. The company offers Internet connectivity, local loop, cloud access, and colocation services. Overall, the company has served 5.0k+ individual customers and 2.8k+ corporate customers.
Additionally, Indonet is building-out data center infrastructure in Indonesia through its subsidiary Ekagrata Data Gemilang PT (EDG). Firstly, Indonet is constructing a facility which it has dubbed its EDGE1 Data Center. Secondly, the company plans to develop several other data centers in Indonesia under Digital Edge’s ownership, starting with its recent purchase of two land plots.
EDGE1 Data Center
Indonet is building-out its EDGE1 Data Center with 6 megawatts / 1.5k cabinets of IT load capacity. Specifically, this facility is located at Jalan Kuningan Barat (city center), the most carrier-dense area in Jakarta.
Construction of the EDGE1 Data Center began in early 2020 and will complete during 2021. As of year-end 2020, Indonet had secured pre-contracts for 30%+ of the total capacity of the EDGE1 Data Center.
Overall, EDGE1 brings power capacity to a strategic location in Jakarta. Indeed, the data center has the ability to support high power density deployments by customers.
Land Plots – Kuningan, South Jakarta
In April 2021, Indonet through its subsidiary Ekagrata Data Gemilang PT (EDG), purchased two plots of land located in the business district of Kuningan, South Jakarta. Notably, these land plots are situated only ~1 mile from the company’s EDGE1 Data Center.
EDG purchased these two land plots for Rp242bn ($16.5m) from Sentragraha Sentosa PT. In so doing, EDG gains two plots of land which comprise a total area of ~64.5k sqft (~6.0 sqm). Indonet will use these two land plots to continue scaling Digital Edge’s data center portfolio in Jakarta, Indonesia.
Scaling Asia Data Center Platform
Today’s announcement in Indonesia brings Digital Edge’s regional Asia footprint to seven data centers across three countries. Also, the Jakarta, Indonesia data center marks Stonepeak and Digital Edge’s entry into Southeast Asia.
In addition to Indonesia, Digital Edge’s footprint includes three data centers in Tokyo (Japan), one in Seoul (South Korea), one in Busan (South Korea), and the development of a 12-megawatt facility in Osaka (Japan).
Digital Edge’s controlling stake purchase in IndoInternet Tbk enables Digital Edge’s customers to deploy into Indonesia. Additionally, the partnership offers Indonesian firms access to Digital Edge’s regional Asia platform to expand outside of the country.
Digital Edge will leverage Indonet’s telecom licenses, dark fiber, network services, and EDGE1 data center for its interconnection-focused customers. Specifically, these customers include network service providers, cloud service providers, and financial services companies. For example, a key target customer segment are foreign telecommunications companies that are seeking to expand their regional and global footprints into Indonesia.
Indonesia – Digital Infrastructure
Overall, Jakarta’s colocation market will reach $625m by 2025, growing at a CAGR of 23.7% between 2021 and 2025. Drivers of this colocation growth include Indonesia’s digital economy, enterprise cloud adoption, and a significant presence of start-up companies.
Moreover, the recent opening-up of foreign ownership restrictions in Indonesia’s telecommunications industry has brought a flurry of international institutional investors to the country. Notable mentions include Colony Capital’s Edgepoint Infrastructure (towers from Indosat Ooredoo and Centratama) and Temasek (data centers through STT GDC).