Indonesia 5G Core Market Report Size Share Growth Drivers Trends Opportunities & Forecast 2025–2030

Indonesia 5G Core Market Overview

• The Indonesia 5G Core Market is valued at approximately USD 1.3 billion, based on a five-year historical analysis. This growth is primarily driven by the increasing demand for high-speed internet, the proliferation of IoT devices, and the government's push for digital transformation across various sectors. The expansion of 5G infrastructure is also supported by investments from both private and public sectors, enhancing connectivity and enabling new applications. Indonesia leads the Southeast Asia 5G Infrastructure Market with a commanding 21% market share, driven by its large population base, rapid mobile data growth, and accelerating digital transformation initiatives.
• Key cities such as Jakarta, Surabaya, and Bandung dominate the market due to their high population density, technological adoption, and significant economic activities. Jakarta, being the capital, serves as a hub for telecommunications and technology companies, while Surabaya and Bandung are emerging as important centers for innovation and digital services, further driving the demand for 5G solutions. These priority zones are receiving substantial infrastructure investments, with telecom operators pre-positioning capital to support network densification and capacity expansion.
• The Indonesian government has established regulatory frameworks supporting 5G spectrum allocation and deployment. Indonesia is auctioning 700 MHz, 2.6 GHz, and 26 GHz bands, enabling differentiated coverage and capacity layers that require dense site grids and new antenna configurations. These spectrum releases provide telecom operators with the necessary bandwidth to accelerate 5G rollout across the country, facilitating better access to high-speed internet for both urban and rural populations.

Indonesia 5G Core Market Segmentation

By Component:The market is segmented into Solutions and Services. Solutions include hardware and software components that enable 5G functionalities, while Services encompass the support and maintenance required for these solutions. The Solutions segment is currently leading the market due to the increasing demand for advanced technologies that enhance network performance and reliability.

By Deployment Model:The market is divided into Cloud and On-Premises deployment models. The Cloud deployment model is gaining traction due to its scalability and cost-effectiveness, allowing businesses to leverage 5G capabilities without significant upfront investments. On-Premises solutions, while still relevant, are being overshadowed by the flexibility offered by cloud-based services.

Indonesia 5G Core Market Competitive Landscape

The Indonesia 5G Core Market is characterized by a dynamic mix of regional and international players. Leading participants such as Telkomsel, Indosat Ooredoo Hutchison, XL Axiata, Smartfren, PT Telekomunikasi Indonesia (Telkom Indonesia), Huawei Technologies, Ericsson, Nokia, ZTE Corporation, Cisco Systems, Samsung Electronics, NEC Corporation, Fujitsu, Mavenir, CommScope contribute to innovation, geographic expansion, and service delivery in this space.

Indonesia 5G Core Market Industry Analysis

Growth Drivers

• Increasing Demand for High-Speed Internet:The demand for high-speed internet in Indonesia is projected to reach 100 million users in future, driven by urbanization and digitalization. The World Bank reported that internet penetration in Indonesia was approximately 77% in future, with a significant increase in mobile broadband subscriptions, which reached 400 million. This surge in demand is pushing telecom operators to invest in 5G infrastructure to meet consumer expectations for faster and more reliable connectivity.
• Expansion of IoT Applications:The Internet of Things (IoT) market in Indonesia is expected to grow to USD 12 billion in future, fueled by advancements in smart devices and applications. The government’s push for smart city initiatives is a key driver, with over 100 cities planning to implement IoT solutions. This growth in IoT applications necessitates robust 5G networks, which can support the massive data transfer and low latency required for effective IoT functionality, thereby enhancing overall market demand.
• Government Initiatives for Digital Transformation:The Indonesian government has allocated USD 2 billion for digital transformation initiatives in future, focusing on enhancing telecommunications infrastructure. This includes the rollout of 5G technology across major urban centers. The government's commitment to digital transformation is evident in its National Digital Roadmap, which aims to improve connectivity and promote digital literacy, thereby creating a conducive environment for 5G adoption and growth in the telecommunications sector.

Market Challenges

• High Infrastructure Costs:The deployment of 5G infrastructure in Indonesia is hindered by high costs, estimated at USD 8 billion for nationwide rollout in future. This includes expenses related to upgrading existing networks and building new towers. Many operators face financial constraints, limiting their ability to invest in necessary infrastructure. The high capital expenditure required poses a significant barrier to rapid 5G adoption, particularly in less economically developed regions of the country.
• Regulatory Hurdles:Regulatory challenges in Indonesia, including complex licensing processes and spectrum allocation issues, impede the swift deployment of 5G technology. The Ministry of Communication and Information Technology has faced criticism for slow regulatory approvals, which can delay infrastructure projects. As of recent data, only 40% of the required spectrum for 5G has been allocated, creating uncertainty for operators and stalling potential investments in the 5G core market.

Indonesia 5G Core Market Future Outlook

The future of the 5G core market in Indonesia appears promising, driven by increasing investments in infrastructure and a growing digital economy. In future, the government’s initiatives and partnerships with private sectors are expected to enhance connectivity across urban and rural areas. The rise of smart cities and IoT applications will further stimulate demand for 5G services. As consumer awareness improves, the market is likely to witness accelerated adoption, paving the way for innovative applications and services that leverage high-speed connectivity.

Market Opportunities

• Development of Smart Cities:The Indonesian government’s commitment to developing smart cities presents a significant opportunity for 5G deployment. With over 100 cities targeted for smart technology integration, the demand for high-speed connectivity will increase, driving investments in 5G infrastructure. This initiative is expected to enhance urban living standards and improve public services, creating a favorable environment for telecom operators.
• Partnerships with Tech Companies:Collaborations between telecom operators and technology firms can unlock new revenue streams in the 5G core market. In future, partnerships focused on developing innovative applications, such as augmented reality and smart healthcare solutions, are anticipated to flourish. These collaborations will not only enhance service offerings but also drive consumer engagement, fostering a more robust 5G ecosystem in Indonesia.