Driving Telecommunications Innovation through Artificial Intelligence
Indonesia’s telecommunications landscape is undergoing a strategic shift, moving from the initial phase of using AI solely for operational efficiency towards sustainable growth as part of a national AI strategic framework. The AI adoption rate among businesses and the Indonesian public has reached a staggering 92 per cent and is projected to boost Indonesia’s Gross Domestic Product (GDP) growth by up to 12 per cent, equivalent to USD 366 billion, by 2030. Seeing this opportunity, major players such as Telkomsel, Indosat, and XLSMART are now leveraging the AI ecosystem to unlock new revenue sources while enhancing customer service through user-oriented AI solutions and strategic partnerships.
As a national strategy, the government is moving tactically to prepare a friendly legal umbrella that still prioritises public information security. For Minister of Communication and Digital Affairs, Meutya Hafid, such public service innovation is tangible proof that technology must be grounded. “Digital economy growth figures must be reflected in and have an impact on society. Technology must be a tool to improve people’s welfare, strengthen MSMEs, and ensure digital transformation truly benefits all of Indonesia,” she asserted. Vice Minister of Communication and Digital Affairs, Nezar Patria, outlined the latest developments in regulatory initiatives that will ensure sustainable AI development. “The government is currently finalising two main policy instruments: the National AI Roadmap and a Presidential Regulation on AI Ethics,” Nezar explained. These progressively designed regulations will prioritise ten national strategic sectors, ranging from food security, health, and bureaucratic reform to the creative economy, as the main drivers.
The government is fully aware that this roadmap cannot be built in a vacuum but must balance the space for innovation with public protection. “The success of AI is not only determined by its technological sophistication but also by our ability to manage data securely, ethically, and responsibly,” said Meutya Hafid, adding an ethical dimension to the regulation. This regulatory innovation finds its best laboratory in the national telecommunications industry. Meutya Hafid underscored that the main prerequisite for leading this technology race is the readiness of basic infrastructure. “To be a leader in AI, data centres must be strong. The talent must also be ready, must be excellent,” she stressed.
However, this entire intelligence architecture cannot function without a smooth digital highway. This is where the acceleration of 5G infrastructure becomes the main determinant. Amidst the Ministry of Communication and Digital Affairs’ move to auction the golden 700 MHz and 2.6 GHz frequency spectrums, a crucial chapter awaited by the mobile industry in mid-2026, an optimistic view comes from the Chairman of the Indonesian Telematics Society (Mastel), Sarwoto Atmosutarno. He sees Indonesia’s long waiting period to massively deploy 5G as a latecomer advantage, where operators can now directly adopt mature technology architecture without having to go through an expensive and time-consuming trial-and-error phase. “For us who have not yet jumped to 5G, it is also an opportunity. We are obtaining technology that is more mature than if we had adopted 5G four or five years ago when it was not yet mature,” said Sarwoto. With the completion of the analogue television switch-off, the golden frequency spectrum is now ready to be optimised to realise a ‘true 5G’ network, not just ‘5G that feels like 4G’, making the connectivity foundation for national artificial intelligence implementation increasingly robust and stable.
Mobile operators in Indonesia are shifting from being mere data pipe connectivity providers (telco) to comprehensive technology solution companies (techco). For analysts, this expansion of services into the AI realm is a highly promising strategic driver for maintaining long-term profitability. Fundamental analyst from BRI Danareksa Sekuritas, Abida Massi Armand, assesses this expansion move as a smart strategy for the stability of operator performance amidst a competitive market. “The utilisation of AI also has the potential to strengthen customer experience and suppress churn rate, thus positively impacting revenue stability and medium-term profitability,” Abida explained. By optimising the big data flowing through their networks and utilising reliable data centre infrastructure, mobile operators now have new monetisation opportunities based on data solutions. Seeing this potential, Telkomsel’s President Director, Nugroho, affirmed his company’s commitment to being at the forefront of this transformation. “Telkomsel will continue to strengthen its role as a digital ecosystem enabler through the development of broadband connectivity, integrated digital services, and the utilisation of AI-based technology to deliver a more seamless, relevant, and valuable customer experience,” he stated, outlining the company’s strategy. A similar step was taken by XLSMART, an integrated telecommunications entity born from the historic merger of XL Axiata and Smartfren. For XLSMART’s President Director and CEO, Rajeev Sethi, the birth of this new force is an important stepping stone to unite network strengths to serve their more than 94.5 million customers. “The formation of XLSMART is an important step in realising our goal: connecting every Indonesian for a better life,” Rajeev said firmly. He also believes that in modern competition, “AI is no longer a future technology, but a present necessity.”