Indosat’s Story: A Journey of AI Pioneer in Indonesia

At the Digital Transformation World 2024 event in Copenhagen, Denmark, we caught up with Vikram Sinha, President Director and Chief Executive Officer of Indonesian operator Indosat Ooredoo Hutchison (IOH), at a media roundtable.

It had been almost two years since we last heard from Sinha, who was then reflecting on the creation of his company from the merger of Indosat Ooredoo and H3i earlier that year. So he opened his talk with an update on IOH and the effect its creation has had on Indonesia in general.

“In terms of consistency and experience, whichever parameter you look at, it has benefited the country,” said Sinha. “I think you all know that, especially post COVID, more and more policymakers in the government are understanding the role the telco sector played.

“They also understand important details for the larger purpose of digital economy and impact on GDP growth. Over the last two years the industry has been growing by 5%, which is a big improvement, and it has a potential to grow closer to a 10%. AI is democratising innovation at phenomenal pace. We believe AI is linked to our wider purpose of empowering all Indonesians.”

Sinha then went deeper into IOH’s own technological strategy, which seeks to get the best out of rapid developments in AI through three main pillars:

“We are very blessed to be in Indonesia,” said Sinha. “There's so much opportunity, with 21 million new customers coming from rural first-time internet users. There are very few countries in the world with these kinds of opportunities. We also think there’s the opportunity to double the current level of ARPU. FTTH home broadband is another growth engine. The Indonesian market today is only 15% home connected and that will go up to 30-35% the next three to four years.”

We then moved on to the Q&A part of the media roundtable, which was attended by a number of telecoms journalists. An initial question concerned proof points for the positive effect IOH’s investments in AI have had. Sinha responded that it has had such a positive effect on their capacity planning that he was able to save around $10 million in the last quarter. In terms of new business opportunities, sovereign cloud was repeatedly mentioned as regulation is demanding much of the cloud workload in a country be sovereign.

There was also plenty more conversation about the benefit all this technological progress is being felt by IOH and the whole country. As previously mentioned, the Indonesian market is far from saturated and there is especially untapped potential in addressing the digital divide between rural and urban Indonesians.

One area IOH is investing in is an Indonesian large language model, in partnership with Tech Mahindra. “Just imagine machines talking local language and solving problems for citizens For me, the pace of innovation is very different. Year after year you will see incredible new opportunities. To help the underserved communities around Indonesia we are targeting around 1 million to speed up their digital literacy so they will not be left behind.”

Overall, while Sinha was obviously keen to share the successes of his company since its creation two-and-a-half years ago, he was just as enthusiastic about the opportunities technological developments around communications and AI offer the country on the whole.

The potential of things like the local-language LLM project are limitless and it looks like IOH has learned that full partnership with vendors, internet giants and governments is the best way to grow the market for everyone. Indonesia is clearly a country worth keeping an eye on as it seems to be set for a period of grammatic growth and development.