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Digital Foundations for Growth
Indonesia Economic Prospects – December 2025
The foundations for digitalization
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Artificial
Intelligence
Digital
government
Digital economy
Digital
identity
Digital skills
enhancement
Cybersecurity
Personal data
protection
Fast and affordable broadband internet
High-capacity data centers and cloud
Digital infrastructure
Digital infrastructure can help achieve
its economic goals
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+0.85-1.43%
higher GDP per capita for 10
pp increase in fixed
broadband penetration 1
+3-6%
higher firm productivity
from better broadband in
Europe, Türkiye & China 3 4 5
+0.2 pp
increased labor productivity
from faster mobile
broadband internet 2
+1.6 pp
increase in digital services
trade for a 10 pp increase in
data center capacity 6
8%
GDP growth
target
1/ ITU, 2021 and 2025
2/ Edquist, 2022
3/ Briglauer et al., 2024
4/ Gal et al., 2019 (OECD)
5/ Dalgıç & Fazlıoğlu, 2020
6/ van der Marel, 2022
Rapid growth in internet adoption—but
2 Indonesias have emerged…
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Proportion of individuals using the internet (2010-2024) 1
22,1 25,4 32,3 39,9 47,7 53,7
62,1 66,5 69,2 72,8
0
20
40
60
80
100
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Indonesia Philippines Viet Nam ASEAN average UMIC average
The unconnected
The connected yet
constrained
•Low internet speeds
•Limited fixed broadband access
•Limited use of laptops & computers
1/ ITU, 2025. ITU DataHub
5
3,4
5,8
13,1
8,8
30,2
8,8
17,0
10,0
18,9
13,4
20,3
15,4
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Male vs. female Internet users Male vs. female mobile phone ownership
Urban vs. rural households accessing Internet Urban vs. rural population using computer
Urban vs. rural population mobile phone owhership Urban vs. rural Internet users
Indonesia; 72,8
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
100,0
Kep. Riau
DKI Jakarta
Kalimantan Timur
DI Yogyakarta
Riau
Bali
Kalimantan Utara
Jawa Barat
Kep. Bangka Belitung
Kalimantan Tengah
Banten
Kalimantan Selatan
Sumatera Barat
Sumatera Utara
Lampung
Jawa Tengah
Jambi
Kalimantan Barat
Bengkulu
Sumatera Selatan
Sulawesi Tenggara
Sulawesi Selatan
Jawa Timur
Nusa Tenggara Barat
Sulawesi Utara
Sulawesi Barat
Gorontalo
Papua Barat Daya
Papua Barat
Aceh
Sulawesi Tengah
Papua
Maluku
Maluku Utara
Nusa Tenggara Timur
Papua Selatan
Papua Tengah
Papua Pegunungan
Changes in disparities in internet access (2015 – 2024)1Internet access (percentage of population) by province (2024)2
1/ World Bank staff calculations based on ITU, 2025. ITU DataHub. & BPS, 2025. Susenas 2024.
2/ BPS, 2025. Susenas 2024.
6,8%
Internet access has become more
inclusive but some digital divides remain
lags regional peers in mobile internet
speeds and fixed broadband adoption
6
27,5
6,4
9,9
5,8
4,8
4,7
2,6
2,2
2,0
0,7
1,0
Timor Leste
Myanmar
Cambodia
Lao PDR
Indonesia
Philippines
Thailand
Malaysia
Viet Nam
Singapore
Brunei
Aordability
Fixed broadband basket
(% of GNI per capita, 2024, ITU)
Ø 6.2
6
28
48
48
41
107
265
157
264
401
84
Timor Leste
Myanmar
Cambodia
Lao PDR
Indonesia
Philippines
Thailand
Malaysia
Viet Nam
Singapore
Brunei
Speed
Median download speed
(Mbps, Sep 2025, Ookla)
Ø 132
1
15
19
22
22
34
47
60
83
108
117
Timor Leste
Myanmar
Cambodia
Lao PDR
Indonesia
Philippines
Thailand
Malaysia
Viet Nam
Singapore
Brunei
Access
Fixed broadband penetration
(% of households, Jun
2025, TeleGeography)
Ø 48
4,8
2,3
1,8
1,2
0,6
0,8
1,1
1,0
0,6
0,3
0,2
Timor Leste
Myanmar
Cambodia
Lao PDR
Indonesia
Philippines
Thailand
Malaysia
Viet Nam
Singapore
Brunei
Affordability
ARPU by mobile connection
(% of GNI per capita, 2024, GSMA)
Ø 1.3
5
50
46
48
58
130
140
160
173
194
Timor Leste
Myanmar
Cambodia
Lao PDR
Indonesia
Philippines
Thailand
Malaysia
Viet Nam
Singapore
Brunei
Speed
Median download speed
(Mbps, Sep 2025, Ookla)
Ø 100
66
52
111
61
115
107
128
139
116
172
94
Timor Leste
Myanmar
Cambodia
Lao PDR
Indonesia
Philippines
Thailand
Malaysia
Viet Nam
Singapore
Brunei
Access
4G + 5G penetration
(% of population, Jun
2025, TeleGeography)
Ø 105
Fixed Broadband
Mobile Broadband
Indonesia
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1/ There were 22% schools have fixed broadband connection in 2023 (Ministry of Education, 2023).
Sources: Ministry of Primary and Secondary Education (2025), Ministry of Religious Affairs (2024), Ministry of Health (2024), and Potensi Desa Survey 2024.
Only 22% of schools have 100+
Mbps internet speeds1
Only 24% of puskesmas have
“good” internet 66% of kantor desa have (any)
functioning internet
22%
(51,491)
with
100+ Mbps
internet
48%
(112,564)
with 10
– 50 Mbps internet
13%
(31,332)
with < 10
Mbps
internet
18%
(41,574)
connectivity is unknown
(37,845 reported no
connection in 2024)
24%
(2,420)
with good internet
54%
(5,459)
with acceptable internet
14%
(1,473)
with poor
internet
8%
(743)
without
internet & 89
unknown
66%
(55,526)
have (any) functioning internet
5%
(4,221)
with mal/non
-
functioning
internet
29%
(24,529)
without internet
54%
(30,451)
with fixed broadband (fiber/cable)
16%
(9,227)
with other
connections
30%
(16,680)
school without internet
54% of religion-based schools
have fixed broadband
Schools, puskesmas, and village offices
face uneven internet connectivity
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100%
main islands 100%
provinces 98%
kabupaten/kota
(gap: 11)
72% 2
kecamatan
(gap: 2,000+)
50% 2
desa/kelurahan
(gap: 41,800+)
Presence of fiber optic distribution points (ODP) 1
1/ Komdigi PMT data
2/ 80% of kecamatan and 63% have fiber but no ODP
Rural areas rely on
microwave & satellite
costly, limited capacity
~¾ of domestic traffic flows via
Jakarta IXPs adding cost &
latency elsewhere
No shared backbone + limited
sharing route duplication, weak
coverage where demand is low
has an extensive—but underutilized &
fragmented—domestic backbone
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A roadmap for strengthening ’s digital
infrastructure
Multiply mobile
broadband speeds
Expand data center
and cloud capacity
Make fixed broadband
universal and affordable
Strengthen and diversify
the digital backbone
…and mobilizing more private investment will be key.
mobile internet speeds by allocating
more spectrum to accelerate 5G
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Brazil
Brunei
Cambodia
India
Indonesia
Lao PDR
Malaysia
Myanmar
Philippines
Singapore
Thailand
Vietnam
0
50
100
150
200
250
Mbps
Average mobile broadband speeds (2019-2025) 1Amount of spectrum allocated for mobile use 2
1/ Ookla Global Speedtest Index
2/ Windsor Place Consulting (April 2025), based on regulator data (GSMA, NERA, MIC Japan, MIIT China, Komdigi, PTA, NBTC, SpectrumMonitoring etc)
0
500
1.000
Low < 1GHz Lower mid-bands (1 GHz - 2.6 GHz) Upper mid-bands (3.3 GHz -7 GHz)
Recommendations:
1. Assign available 700 MHz and 2.6 GHz band
capacity to mobile broadband
2. Release and assign 3.5 GHz band capacity in
urban areas to accelerate 5G deployment
Enable private investment in network
upgrades by spectrum costs
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Source: World Bank staff calculations based on MNO’s annual report and Komdigi auction data
3,9
3,7
4,3
3,8
Income tax paid
% of operators revenue,
2022-24 average
Ø 3.9
0,0
2,8
0,4
1,4
Philippines
Malaysia
Thailand
Indonesia
USO payment
Estimated % of revenue, as set
in respective laws (2024)
Ø 1.4
2.5% of net
income + 7% VAT
6% of weighted
net revenues
N/A
1,9
3,6
9,1
11,4
Philippines
Malaysia
Thailand
Indonesia
Spectrum cost
Fixed % of service revenue of
all MNOs in a country (2024)
Ø 6.4
1.25% of all
gross revenues
Indonesia
Performance and coverage obligations can promote further network improvements
fixed broadband access by promoting
competition and infrastructure sharing
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Homes electrified =
84 million homes
(99.79% of all homes)
Homes passed by
fixed broadband
(internet in reach) =
39 million Usage gap
22.8 mn homes
Homes
connected to
fixed internet =
17.4 million
Coverage gap
36 mn homes
•High CAPEX for works
•Limited infra sharing
•RoW challenges
•Weak competition →
high prices
•Fragmented & uncertain
public facility demand
Recommendations:
1. Mobilize private investment in rural
areas by aggregating multi-year
demand from public facilities.
2. Promote fair open access to
wholesale fiber networks and
passive infrastructure—including
PLN’s poles—and standardized
RoW.
local data center capacity by
improving the investment environment
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1/ Cushman & Wakefield, 2025
SE Asia DC capacity load (MW), H120251
Recommendations:
1. Streamline data center permitting and
improve coordination across SEZ policy,
electricity provision, and incentive
frameworks
2. Set clear, risk-based rules for data storage
and cross-border data flows—including
issuance of the PP on UU PDP and alignment
of other regulations—while promoting
secure government adoption of cloud
services
Strengthen and diversify digital
backbone
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KepMenKKP 14/2021 restricts international subsea
cables to Batam, Japayapura, Manado & Kupang.
Most traffic routes Singapore-Batam = single corridor
dependency.
Exclusion of Jakarta & other hubs deters investment by
cloud providers and foreign carriers.
PermenHub 2/2021 restricts foreign repair vessels
despite limited Indonesian options.
Palapa Ring’s high prices & limited interconnection
leads to underutilization and high transit costs.
Recommendations:
1. Amend Minister of Maritime
Affairs and Fisheries Decree No. 14
of 2021 to allow additional
international submarine cable
landing sites, including Jakarta
and other major commercial hubs
2. Review Palapa Ring wholesale
tariffs to ensure open and
sustainable access, particularly to
improve affordability and
connectivity in eastern Indonesia.
Better digital
infrastructure is
key—but it is not
a panacea—for
realizing the full
potential of
digitalization
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Digital
infrastructure
Digital
skills Digital
trust
Terima
kasih.
Jonathan Marskell
Senior Digital Specialist
jmarskell@worldbank.org
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