PT Telekomunikasi Indonesia (Telkom) this week announced a new business strategy that will see it shifting to focus on digital services running from its data centers, moving away from its reliance on subsidiary Telkomsel for its income.

The move follows criticism by State-Owned Enterprises Minister Eric Thohir, who a few weeks ago chastised the majority state-owned telecommunications giant for how mobile provider Telkomsel contributes 70 percent of its income.

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Digital services

According to the Jakarta Post, Telkom will now shift its focus to digital services to grow its main source of income and reduce its reliance on cellular services.

“We will launch a number of new services in the next few months. Our challenge is to transform our services from off-the-shelf products to solution-based software,” said Ririek Adriansyah, the president of Telin at the CNBC Indonesia Economic Outlook 2020 discussion held in Jakarta on Wednesday.

“We will enter what we call the digital platform, for example, the data center and then the cloud. Because looking ahead, [the future] of computing is the cloud,” Ririek said. He estimated that the Indonesian cloud computing market could reach between US$120 billion and $150 billion by 2024. This works out to around 15 percent of Indonesia's gross domestic product (GDP) for 2019.

To support this endeavor, Telkom will build a data center in East Jakarta as an initial step, followed by more data centers in several regions outside Jakarta.

Telkom is not new to data centers. It currently owns and operates 11 colocation data centers in Indonesia under subsidiary PT Sigma Cipta Caraka, also known as Telkomsigma. It also owns three data centers in Singapore under Telekomunikasi Indonesia International Pte Ltd (Telin Singapore), which early year also launched a data center in Hong Kong.

Last year, Telkom was reported to be acquiring plots of land for new data centers and could be investing as much as a trillion rupiah (US$70m) in new data centers in Indonesia.