Jakarta, INTI - Growing demand for Artificial Intelligence (AI) infrastructure is creating new opportunities for Indonesia's telecommunications industry.
However, substantial network investment requirements and uncertain returns on investment remain major challenges for operators seeking to develop next-generation technologies.
Deputy Minister of Communication and Digital Affairs Nezar Patria emphasized that telecommunications networks form the backbone of the AI ecosystem, as data exchange, transmission, and collection all depend on reliable connectivity.
"There can be no data exchange without telecommunications networks. Data cannot be transferred, and cloud platforms cannot collect data if telecommunications networks do not function properly," Nezar said at Lintas Teknologi Solutions Day 2026 in East Jakarta on Saturday, October 31, 2026.
According to Nezar, telecommunications networks are a fundamental component of the AI supply chain, alongside essential resources such as electricity, energy, and water.
Addressing connectivity gaps is therefore crucial to accelerating technology adoption and ensuring broader public participation in the digital ecosystem.
"Our target is to achieve internet speeds of 100 Mbps at more affordable prices, enabling wider household adoption. This will help accelerate technology deployment," Nezar stated.
In terms of infrastructure development, 4G network coverage has reached nearly 99% of populated areas, while internet penetration stands at approximately 81%.
However, fixed broadband penetration remains relatively low at around 22%.
The government is targeting internet speeds of up to 100 Mbps while reducing service costs to expand household broadband access.
Currently, the average monthly cost of fixed broadband in Indonesia is approximately Rp300,000, higher than in India, where prices range from US5toUS10.
5G Development and Connectivity Key to Accelerating AI Adoption
The government is also encouraging 5G network development, as its lower latency capabilities can support AI-powered computing and faster decision-making processes.
"When discussing AI, 5G is the most suitable technology because its lower latency enables faster computing and decision-making," Nezar explained.
He further highlighted the telecommunications industry's strategic role in supporting Indonesia's digital economy, which is projected to reach US366billionby2030,comparedwiththeestimatedUS1 trillion potential of the broader ASEAN digital economy.
He expressed hope that stronger collaboration between the telecommunications industry and the government would generate innovations to help achieve these digital economy growth targets.
"Through collaboration, the government is working to establish regulatory frameworks that support the telecommunications industry while encouraging broader AI adoption across various sectors," he concluded.
Conclusion
Indonesia's growing AI ambitions depend heavily on reliable and affordable telecommunications infrastructure. While expanding 5G networks and improving broadband connectivity offer significant opportunities, high investment costs and uncertain returns remain key challenges for operators. Stronger collaboration between the government and telecommunications industry will be essential to accelerating infrastructure development, expanding AI adoption, and unlocking Indonesia's projected digital economy potential of US$366 billion by 2030.
Read more: Indonesia Urges Industry to Develop a Unified National Strategy Amid Global AI Expansion