Telkom Indonesia, Indonesia’s state-owned telco, is planning to sell a minority stake in its data center business.

The company is currently selecting financial advisors for the sale and expects it to be complete before the end of the year.

Telkom Indonesia - neuCentrIX Tanjung Karang.jpeg
Telkom Indonesia operates 23 data centers in Indonesia – Telkom Indonesia

Ahmad Reza, Telkom’s senior vice president of corporate communication and investor relations, told Reuters that the company is currently considering how big a stake it will part with. Two sources close to the discussions told the news agency it will be a minority stake, with the sale set to kick off next month.

The sale will value Telkom’s data center business at $1 billion, the sources told Reuters.

"As the Internet penetration worldwide is growing rapidly, the data center business is becoming a hot asset to invest in, including in Indonesia," Reza said.

Selling a minority stake would give Telkom Indonesia the finances to expand its data center footprint. The company currently operates 28 data centers, 23 in Indonesia and five overseas.

Its newest facility opened in November in Banda Aceh, on the southern end of the Island of Sumatra. It is one of the company's "neuCentrIX" data centers, supporting government services and local Internet service providers. A similar facility was also inaugurated last year in Bandar Lampung.

It is not the first time Telkom Indonesia has investigated new financing options for its data center operation. In 2021 it said it was considering taking the the company public via an IPO, then in 2022 reportedly considered selling the business entirely.