A view on the South East Asia data center market – part 1

  1. Overview of the South East Asia Data Center Market

The South East Asia data center market is both a single market group while each country in the Association of South East Asian Nations (“ASEAN”, which Papua New Guinea and East Timor are seeking to be a part of the ASEAN group) is a State and therefore manages, license, and promote the local data center market within its national boundaries.

The telecommunications network hub (see link www.submarinecablemap.com places Singapore having the most fibre connections in this region, while Thailand, Malaysia have good number of submarine fibre connections but because of their vast land mass and higher population, bandwidth and speed of access by user (enterprise, home or mobile) to access application and content outside of their country to US and Europe is seriously bottlenecked. In this case, Singapore serves as a good network hub for app and content (including CDN) access for neighbouring countries.

2015 and this year so far, there have been quite a fair bit of news articles about the Singapore Data Center market. There is less information on the English media that talks about the rest of the South East Asia market, which is surprising to me as Singapore serves as a network hub, which she has the least number in terms of population and end users. I hasten to add that the growth of the Singapore Data Center market is feeding the tremendous growth of mobile data and IT usage in the populous nations in this region, especially Indonesia, Vietnam, Thailand, and Philippines.

Growth is still pretty good for Singapore, the network hub of South East Asia. Singapore is well positioned on several major factors, good telecommunications infrastructure, financial hub, good pool of IT and telecommunications work force, political stability, and regional headquarter location for MNCs in this region with the exception of a few companies that have chosen Kuala Lumpur or Manila (e.g. Emerson, Microsoft).

Various research reports in the past three years put the Singapore Data Center market to worth USD 1B this 2016, while the entire ASEAN data center market is worth between USD 2 to 3.7 B. Looking at the various reports, there is a wide margin of error, so a very rough mid point of the various estimates put Singapore Data Center market at between 35% to 60% of the ASEAN data center market.

While Singapore is most definitely a key hub to have a set of core data centers, the growth of the Singapore data center market is in most part due to the growth of the data processing and storage of information in the entire region. The various countries in ASEAN with a huge mobile and young work force will consume mobile 3G/4G content and utilize the social media apps to stay in contact or enjoy their entertainment be it video or games, will drive demand for data storage and processing in these countries itself, meaning a hub and spoke strategy should be considered. For those companies that leverage on these populous numbers, for example the streaming media content players or game service providers, they need a blend of hub + spoke + edge to get their users to stick with their content or entertainment and not switch to another content provider or game if the network speed is not near tip-top through CDN at the edge data centers.

The major cloud service providers, AWS, Microsoft Azure, Google, and Aliyun are already in Singapore and elsewhere in the Asia Pacific including China, Hong Kong, Japan, India, Australia. It is foreseeable that they will build or collocate their IT and data storage equipment in the huge developing countries’ cloud demand of Indonesia, Philippines, Thailand, Vietnam, and Malaysia.

It is also foreseen that CDN players that addresses video and game content will have a key role to play in the demand side of the colocation data center market.

  1. Background

Various research reports have stated that around 80% of data stored today were generated in the last two years. It is more so for the Asia region as adoption of Internet and recently implementation of 3G and 4G grows at a fast pace.

The population size and the number of mobile users (a good indicator of the mobile Internet user base) of the South East Asia countries are as follows (from Wikipedia or telecom report):

Country Population Size 3G or 4G subscribers Remark
Indonesia populations (2013) stands at 249 million. Number of subscribers is 106 millions Most populous country in South East Asia. 4G is starting to roll out.
Philippines Population (2014) stands at 101 million. Number of subscribers is 51 millions 4G take up is slow.
Myanmar Population 93 millions. Number of subscribers is 13 millions. No 4G plan yet.
Vietnam Population (2013) stands at 89 million. Number of subscribers is 52 millions 4G license to issue by end of 2016.
Thailand Population (2013) stands at 67 million. Number of subscribers is 58 millions. 4G just launched in 2015
West Malaysia Population (2010) stands at 22.5 million. Number of subscribers is 16 millions (east and west Malaysia). Most users on 3G
Cambodia Population 54 millions. Number of subscribers is 8 millions. No 4G plan yet.
Laos Population 16 millions. Number of subscribers is 3 millions. No 4G plan yet.
Singapore Population (2013) is only 5.4 million. Number of subscribers is 5 millions. Most subscribers are 4G. 2G will be decommissioned in 2016.
Brunei Population (2013) is only 0.42 million. Number of subscribers is 43% 4G take up is slow.

Full name is Brunei Darussalam.

  1. Singapore

The data center sector has enjoyed attention in the media and government has launched the Singapore Data Center park back in 2009. It has the most square footage for data center space in this region despite it being the second smallest country (minus PNG which is applying for ASEAN membership) in the Association for South East Asian (ASEAN) organization.

It has the most number of International fibre connections linking it through the South China Sea to Australia, Hong Kong, Japan, US west coast, and also to the middle East and Europe through the Malacca Strait. See the submarine cable map link for more information on the connectivity. All the rest of the countries in ASEAN are connected to Singapore even in their trans-Atlantic and Pacific submarine fibre links, which the exception of a couple of fibre links between Indonesia to East Malaysia and Brunei.

Singapore is a matured market for data center, with estimated 3 million square feet of data center space and decent occupancy rate. There are good mix of foreign data center players (DRT, Equinix, Telstra-Pacnet, Global Switch, Telin) and local data center players (Singtel, Keppel, STT, 1-Net, Kingsland) plus many others in the Singapore market. AWS, Google, and Microsoft have built there standalone data center facilities here in Singapore as well. The average power per rack in Singapore is the medium power capacity rack, averaging between 6-8kW.

As with other parts of the developed countries, the Government has played an active role as evidenced by the creation of the Singapore Data Center park project, and also supportive policies in attracting foreign data center operators to build their facility here.

Much has been covered about the Singapore Data Center market in news and research reports in 2015 and 2016. Please see the reference section for some of the links.

I have a few points to make here with regards to Singapore vis-a-vis other countries in South East Asia.

Firstly, the data center market in South East Asia is not a zero sum game, i.e. the growth of data center market is interlinked in such a way that it mostly grows together. Take for example Singapore and Indonesia, lots of business are done between the two countries with each having to generate, process, and store data and thus each having to have data centers.

Secondly, Singapore will not be able to accommodate all of the region’s need for data center space and power. Singapore has limited land area, and despite the fairly short distance between it and its neighboring countries, application, video, and large chunk of data processing and storage is best done at source or destination, i.e. closer to where it is generated or consumed. The traffic generated by Indonesian businesses and people or to be consumed by them are best served local.

Last but not least, it is cheaper to house the large chunk of data and the IT processing plus storage equipment closer to the source/destination. Singapore will still be important as it is also the financial hub for this region, and also as the regional network hub. Data Center market in Singapore is likely to enjoy healthy growth in itself and in support of the faster regional data growth.

  1. Indonesia

Stable economic growth by the previous two governments and the focus on infrastructure development by the current administration under Jokowi is encouraging. Even more encouraging are the deal of USD 5.5Bn medium speed train project given to China (funded by China) in October 2015. This rail project is still slowly moving along.

Even more encouraging is the Indonesia has opened dozens of businesses to full and partial foreign ownership, making it even more easier than Malaysia to incorporate companies without need for having local citizen as board member unlike some of the other South East Asia countries.

It is prudent to exercise caution given that the Indonesian government may move slowly to relax these rules.

There is a lack of good dedicated data center facility that meets Rated/Tier 3 and above, given that Rated/Tier 3 (Nowadays TIA-942 describes data centers tiers as Rated level) requires standalone and dedicated data center facility. Still, there are some data center players that are established in Indonesia, mainly in and around Jakarta but there is some liked IDC and Moratelindo that operates in other cities.

  • TelKomSigma (parent of Telin)
  • NTT NexCenter in mixed use building and newly acquired NEXCenter 2 (formerly the CyberCSF)
  • Moratelindo built 6 Nusantara Data Center (NDC) in Medan, Batam, Palembang, Jakarta, Surabaya, Bali and said that their Jakarta data center is TIA 942 compliant (according to their website)
  • Equinix has partnered with local new data center company PCI in 2013 to have a local data center called JK1 in Jakarta.
  • Nex DataCenter (not to be confused with NTT NEXCenter)
  • IDC Indonesia (has six facilities, sold part of shares of Cyber to NTT)


From 2015, the flurry of announcement of purchase of data center and joint ventures for new data centers:

  • NTT has acquired the CyberCSF data center facility (renamed to be called NexCenter 2) Company Moratelindo has data centers Nusantara data centers.
  • In May 2015, the Indonesian conglomerate Lippo Group’s joint venture between Lippo and Japan’s Mitsui to have Graha Teknologi Nusantari (GTN) build a data center 30km east of Jakarta.
  • Equinix announced in February 2016 that it is doubling its Jakarta JK1 data center capacity (by 400 racks)

One of the issue is land has to be owned by local companies, and I am not aware if the recent relaxation on foreign ownership changes it. Nevertheless, there are plenty of large conglomerate which have both internal demand for good data center space.

Indonesia had in the past proved to backtrack on its pro-investor stance, with the 2007 ruling by the Business Competition Supervisory Commission (KPPU) that Singapore Temasek Holdings (an investment arm of the Singapore Government’s Ministry of Finance) that it has through SingTel and STT owns shares (minority) in two separate telecommunications carriers (see reference).

Initial take up of data center space may be dominated by online and mobile game companies, online content companies, and the banking and financial sector that are still trying to meet the Indonesian Central Bank directive issued in 2012 requiring compliance by Oct 2017. It is likely that the central bank may grant an extension but banks are looking for good data center space given that building new one will not be fast enough to meet the regulation. We have understood that foreign banks in Indonesia are expanding their data center capacity requirements and some have moved into new data center facilities.

Changes are very fast given that it is only starting to take off in a big way in Indonesia.

What is holding back the data center market in Indonesia may not be the big items like land or money. It will be data center design specialist companies, and trained and knowledgeable data center infrastructure operations people. The understanding of the telecommunication facilities available for the chosen site or building will also be very important given that Indonesia’s telecommunication sector is not fully liberalized.

The expected faster rate growth of need for data processing and storage by the huge population and small businesses in Indonesia warrants a closer look for data center operators in this country.

In geographically dispersed countries with multiple large urban cities like Indonesia, it will likely have data center players that focus on a particular city or adopt a multi-city approach. Edge data center deployment makes sense in countries that have multiple smaller townships with populations less than one million.

However, Indonesia do suffers from co-ordination of effort in promoting and supporting the foreign investment and data center operators to set up their data center facility in Indonesia. There need to be a central agency or authority with the mandate and power to manage the allocation of land, power, and “nudge” the telecommunications carriers to provide the necessary fibre connectivity. However, all signs so far has shown that data center market in Indonesia is set to grow pretty fast in the coming few years.

End of Part 1

The rest of the series will covers the rest of the South East Asia data center market.


  1. https://www.ericsson.com/res/docs/2015/mobility-report/emr-nov-2015-regional-report-south-east-asia-and-oceania.pdf
  2. https://www.bicsi.org/uploadedFiles/BICSI_Website/Global_Community/Presentations_and_Photos/Southeast_Asia/2012_SEA/2.1%20ASEAN%20Data%20Centre%20Market.pdf
  3. http://www.datacenterdynamics.com/design-build/how-will-south-east-asias-data-centers-look-in-2020/94687.fullarticle
  4. http://www.broad-group.com/reports/dc-seasia (5th Edition, Jan 2016)
  5. Why Now is the time to localize your mobile game for South East Asia. http://www.andovar.com/mobile-games-southeast-asia-localization/


  1. http://www.dealstreetasia.com/stories/data-centres-a-growth-market-in-singapore-sea-ida-7244/
  2. http://www.businesstimes.com.sg/real-estate/singapore-a-small-landscape-with-a-large-vision-for-data-centres
  3. http://www.datacenterdynamics.com/design-build/how-will-south-east-asias-data-centers-look-in-2020/94687.fullarticle
  4. https://datacenternews.asia/story/booming-sea-data-center-market-undergoing-major-shift/
  5. https://www.dbs.com.sg/treasures/aics/pdfController.page?pdfpath=/content/article/pdf/AIO/AIO_2015/Sector-Report-009-TELCO-LOW-RES.pdf


  1. http://www.prnewswire.com/news-releases/frost–sullivan-enterprise-services-market-in-indonesia-is-expected-to-reach-us386-billion-by-2019-300042689.html
  2. http://articles.economictimes.indiatimes.com/2011-02-11/news/28540032_1_temasek-holdings-investment-firm-largest-sovereign-wealth-funds
  3. http://www.wsj.com/articles/indonesia-opens-more-big-businesses-to-foreign-investment-1455185389
  4. http://asia.nikkei.com/Politics-Economy/Economy/Widodo-shifts-up-a-gear-to-pursue-FDI?page=2
  5. http://www.wsj.com/articles/indonesia-ministry-cites-high-speed-railway-shortcomings-1454507248
  6. https://www.pwc.com/id/en/publications/assets/banking-survey-2015.pdf
  7. http://en.finance.sia-partners.com/apac-onshoring-case-indonesia
  8. http://www.datacenterdynamics.com/content-tracks/design-build/equinix-partners-with-indonesian-firm-for-jakarta-data-center/70057.fullarticle
  9. https://datacenternews.asia/story/equinix-doubles-jakarta-data-center-capacity-adds-partners-iix-connection/
A view on the South East Asia data center market – part 1

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