Indonesia Internet-of-Things (IOT) Market Outlook to 2030

Indonesia IoT Market Overview

• The Indonesia IoT (Internet of Things) market was valued at USD 1.76 billion. This growth is driven by increasing digitalization across industries, expanding urban infrastructure, and government initiatives promoting smart city projects. The market is further supported by the adoption of 5G technology and the rise in connected devices.
• Key players in the Indonesia IoT market include Telkom Indonesia, XL Axiata, Huawei Technologies, Ericsson, and Cisco Systems. These companies are leveraging the growing demand for smart solutions across sectors like manufacturing, healthcare, and energy.
• Telkom Indonesia and Cisco have partnered to enhance IoT services in ASEAN, launching the Cisco IoT Control Center at NeutraDC's data center. This facility will support 5 million connections, aiming to accelerate digitalization and meet rising demand for smart solutions across various sectors.
• Jakarta emerged as the leading region in the Indonesia IoT market, driven by rapid urbanization, the development of smart cities, and an increasing number of connected devices aimed at improving infrastructure and public services.

Indonesia IoT Market Segmentation

The Indonesia IoT market is segmented by component type, application, and region.

• By Component Type: The market is segmented into hardware, software, and services. Hardware dominated the market due to the large-scale adoption of IoT sensors and devices.

• By Application: The market is segmented by applications such as manufacturing, healthcare, energy & utilities, transportation & logistics, and others (agriculture, smart homes). Manufacturing held the largest market share due to its extensive use of IoT for automation and operational efficiency.

• By Region: The market is segmented by region into North, South, East, and West Indonesia. The western region led the market due to the concentration of industries and advanced infrastructure in cities like Jakarta and Surabaya.

Indonesia IoT Market Competitive Landscape

• XL Axiata: XL Axiata, an Indonesian mobile operator, is collaborating with TIBCO to provide data scientists with advanced analytics tools, including TIBCO Data Science. The project aims to equip 50 data scientists with tools to embrace cloud technology and enhance data analysis capabilities.
• Huawei Technologies: Huawei and EDMI, a leading smart metering solutions provider, have signed a global IoT licensing agreement, enabling EDMI to develop and sell IoT products using Huawei's LiteOS and Huawei Mobile Services (HMS) Core.

Indonesia IoT Market Analysis

Indonesia IoT Market Growth Drivers:

• 5G Adoption: The deployment of 5G networks is accelerating in Indonesia. As of 2023, Indosat's 5G network has reached eight major cities, while Telkomsel had 1,500 5G base stations by the end of 2021. 5G technology enables faster data speeds, with average download speeds reaching 300 Mbps in Indonesia as of October 2023.
• Industrial Automation: Indonesia's manufacturing sector is embracing IoT to optimize operations. For example, the country's first 5G-powered smart warehouse, launched in 2022, utilizes autonomous guided vehicles (AGVs), IoT sensors, and real-time data processing to streamline logistics.
• Data Analytics and AI Integration: The Indonesian government's AI readiness index reached 52.5 out of 100 in 2022, with the highest scores in data and infrastructure. Businesses are leveraging AI and data analytics to extract insights from IoT data. According to Ericsson, 5G will empower Indonesia to unlock the potential of Industry 4.0.

Indonesia IoT Market Challenges:

• Infrastructure Gaps: Regions outside Java face major challenges due to insufficient digital infrastructure, which hampers IoT adoption. Around 60% of Indonesia's internet users are concentrated in Java, leaving other areas with limited connectivity and access to IoT solutions that require reliable internet services for effective implementation.
• Cybersecurity Concerns: As IoT adoption increases, so do cybersecurity risks. Indonesia experiences about 42,000 cyber-attacks daily, with 361 million reported in 2023 alone. The countrys cybersecurity spending is only 0.02% of GDP, making it crucial to enhance data security measures to protect sensitive information in the digital economy.

Indonesia IoT Market Government Initiatives:

• Smart City Nusantara Program: The Smart City Nusantara Program aims to enhance urban living through IoT integration. As of 2023, Jakarta's smart city initiatives have led to a 30% improvement in public service efficiency. Additionally, over 50 smart city projects are underway across various Indonesian cities, focusing on transportation, safety, and public services.
• Making Indonesia 4.0: The "Making Indonesia 4.0" initiative seeks to transform the manufacturing sector by 2030. By 2023, the Indonesian government reported that 40% of manufacturers are adopting IoT technologies. This initiative is expected to contribute to a 15% increase in productivity within the manufacturing sector, positioning Indonesia as a competitive player in the global market.

Indonesia IoT Market Future Market Outlook

The Indonesia IoT market is expected to grow over the next five years, driven by the increasing need for automation, government-backed initiatives for smart cities, and the deployment of 5G networks.

Future Market Trends:

• Increased Focus on Smart Cities: Over the next five years, smart city projects are expected to dominate IoT investments, particularly in urban areas like Jakarta, Bandung, and Surabaya. The Indonesian government is prioritizing the improvement of public infrastructure, which will lead to increased funding and development of smart city initiatives aimed at enhancing urban living and services.
• IoT in Agriculture: IoT solutions in precision agriculture are anticipated to gain traction, enabling farmers to monitor crops and optimize irrigation systems. This trend will drive growth in rural regions, as the adoption of IoT technologies helps improve agricultural efficiency, productivity, and sustainability, ultimately benefiting the agricultural sector and local economies.