Tokyo- Japan – August 14, 2025 –
Japan is set to significantly increase its role in Indonesia’s telecommunications sector, with a new initiative aimed at helping local companies handle crucial network maintenance and management. The move is a strategic effort by Tokyo to not only foster the growth of Indonesian businesses but also to provide a trusted alternative to Chinese competition, which has long dominated the Southeast Asian market.
The push comes as Indonesia, the world’s fourth-largest cellular market, grapples with the challenges of modernizing its digital infrastructure in an era of rapid technological change. While major Chinese firms like Huawei have become dominant players, providing the bulk of the network equipment for key Indonesian operators like XL, Indosat, and Smartfren due to their cost competitiveness, concerns over long-term strategic autonomy and cybersecurity have grown. A recent report from The Strategist warned that without proper “AI guardrails,” Indonesia risks becoming overly dependent on Chinese technology, which could constrain its strategic autonomy.
Japan’s new strategy, spearheaded by both public and private sector entities, is designed to directly address these concerns. Instead of merely supplying hardware, the focus is on a comprehensive, long-term partnership that includes technical assistance, capacity-building, and knowledge transfer. The Japan Bank for International Cooperation (JBIC), for example, has historically provided loans to finance the installation of high-capacity submarine optic-fiber cable systems, using machinery and equipment from Japanese firms. However, this new effort is more focused on the operational side, with Japanese telecom companies and engineers providing expertise in network maintenance, technical know-how, and the development of new, domestically-owned solutions.
According to a spokesperson for a major Japanese telecom equipment manufacturer, the goal is not to “replace Chinese equipment overnight, but to empower Indonesian companies to have more control and expertise over their own networks.” This approach is expected to resonate with Indonesian officials who are keen to develop their own domestic technological capabilities and reduce their reliance on a single foreign provider. The Japanese strategy is also being framed as a move to support “quality growth,” in contrast to what some see as a more transactional approach from Chinese firms.
The Indonesian telecommunications market is currently characterized by intense competition, with the top three players commanding nearly 95% of the total revenue in 2022. While these firms have largely relied on Chinese suppliers for their 5G and 4G equipment, a partnership with Japan on the maintenance and operational side could give them a competitive edge. By improving the efficiency of maintenance and enhancing the reliability of their services, Japanese support could help Indonesian telecom companies improve their service quality, reduce fault ratios, and ultimately attract more subscribers.
This latest initiative is part of a broader Japanese strategy to expand its economic and strategic influence in Southeast Asia. Japan has long been a major trade and investment partner for Indonesia, and its Official Development Assistance (ODA) has played a significant role in infrastructure and economic development. By focusing on the telecommunications sector, Japan is now targeting a key area of the digital economy that is vital for Indonesia’s future growth. This is a clear signal that Japan is committed to supporting its partners in their digital transformation while subtly pushing back against China’s dominance in the region.
The timing of this push is also significant, as it comes at a moment of heightened geopolitical rivalry between the United States and China. As a key ally of the US, Japan is aligned with Washington’s concerns about the security implications of Chinese-made telecom equipment. By offering a secure and reliable alternative, Japan is not only advancing its own economic interests but also supporting the broader strategic objectives of its allies. The success of this new initiative will not only be measured in market share but also in its ability to foster a more resilient and diverse telecommunications ecosystem in a region of vital global importance.
