Telkom Puts NeutraDC Control in Play as AI Lifts Data-Centre Values

Telkom Indonesia, the country’s largest state-controlled telecommunications group, is evaluating binding offers for its data centre unit, NeutraDC, after shifting from an initial minority stake sale to a potential change of control.

The transaction comes at a highly favourable valuation window for the sector. NeutraDC’s Cikarang hyperscale facility has reached 96% occupancy, its pipeline yields an expansion pathway towards 200 MW and power-secured infrastructure assets are commanding record premiums across the region.

But Telkom’s critical dilemma is whether it is executing a timely capital-recycling play at the top of a valuation cycle or divesting too much of its multi-year compounding engine.

Telkom disclosed that its search for a strategic partner has advanced to evaluating binding bids, targeting transaction completion by the end of 2026. But the management declined to confirm specific valuation targets or the exact size of the stake under negotiation, dismissing market figures as external estimates.

However, local reports indicate that a majority divestment remains under active consideration.

The current deal architecture represents a sharp departure from the initial auction parameters. When early details of the divestment leaked, Telkom was seeking to offload a 20-30% minority holding. Suitors, including Singtel and BDx Data Centers, were among the early interested parties, under a structure that valued the asset at more than $1 Bn.

The process has since accelerated. The auction pivot towards a potential majority holding marks a significant shift in corporate strategy. Telkom initially sought passive development capital, but it is now prepared to cede absolute operational control of its primary growth vehicle.

From Minority Capital to Control

The tactical shift is structurally tied to the secular rerating of regional digital infrastructure. NeutraDC is not being marketed out due to operational distress. Its first-half revenue climbed 11% YoY to Rp867 Bn, while effective capacity reached 49.9 MW. Beyond the core Cikarang footprint, NeutraDC’s new hyperscale facility in Batam is scheduled to go live with an initial 6 MW capacity.

Private Hospital Deal Activity in Malaysia: 2023–2026 YTD

Year	Deal Volume	Disclosed Deal Value
2023	3	RM5.93 Bn
2024	2	RM3.92 Bn
2025	0 identified	–
2026 YTD	2	RM2.86 Bn

Note: Figures cover publicly announced M&A, minority investments and priced IPOs involving Malaysia-based private-hospital operators or Malaysian hospital assets. Undisclosed transactions are included in deal volume but excluded from deal value. Proposed, cancelled, property-only and capex transactions are excluded. The 2026  figure covers the period through to September 8.

The RM5.7 Bn Ramsay Sime Darby Health Care transaction included four hospitals in Malaysia and three in Indonesia, with no country-level value disclosed. Sunway Healthcare’s RM2.86 Bn represents its gross IPO offer size, including secondary shares.

Sources: Company announcements and filings; Bernama, Reuters and Entrepreneur APAC analysis

The asset’s premium resides in its long-term development pipeline. NeutraDC’s recent framework agreement with the state electricity company Perusahaan Listrik Negara (PLN) to scale the Cikarang campus up to 200 MW positions the platform at the centre of institutional data infrastructure demand.

According to CBRE, Asia-Pacific’s data centre investment reached a record $11.6 Bn in 2025, and another $8.3 Bn went into platforms and operating companies as investors sought scale through established regional businesses.

Recent Asia-Pacific data centre deals show just how heavily investors are willing to price in future growth. Blackstone’s AirTrunk acquisition valued the business at more than 20 times forward core earnings, while DigiCo REIT listed at 26 times forward earnings—striking premiums compared to the 16-times multiple seen in broader global private infrastructure deals.

Against that backdrop, Telkom is testing whether investors will pay today for NeutraDC’s next phase of expansion, rather than wait for that capacity to come online.

Power Is Becoming the Scarcity Premium

The regional AI build-out has fundamentally altered infrastructure underwriting, shifting the primary operational constraint from physical real estate to grid capacity.

Industry projections estimate an Asia-Pacific data centre capacity shortfall of 15-25 GW by 2028, driven by widespread allocation bottlenecks. As high-density AI workloads require more than double the power density per rack of conventional enterprise servers, NeutraDC’s secured 200 MW pathway with PLN serves as an insulated commercial moat, giving it early visibility over grid access in a capacity-constrained market.

However, raw megawatt volume is no longer the sole underwriting metric. Southeast Asia’s power generation mix remains highly carbon-heavy, with coal accounting for half of regional generation. This grid profile creates a direct operational conflict for multinational hyperscale tenants bound by strict corporate net-zero mandates.

To preserve institutional terminal value, NeutraDC has secured renewable energy certificates (RECs) from PLN and integrated low-carbon initiatives into its Batam design. While these adjustments do not alter the baseload carbon intensity of the Indonesian grid, they give international infrastructure buyers the ESG defensibility needed to keep the asset financeable over a multi-decade horizon. A power-secured data centre with a visible decarbonisation pathway commands an undeniable premium.

The Logic of Capital Recycling

The balance-sheet rationale for a divestment is straightforward. Data centres are highly capital-intensive assets, requiring massive upfront outlays for shell construction, liquid cooling and electrical substations before matching utilisation cash flows materialise.

Scaling NeutraDC from 50 MW towards its 200 MW goal requires an intensive capital deployment cycle that few regional telecom balance sheets can absorb on their own.

The transaction aligns with Telkom’s ongoing structural reorganisation. Under its active restructuring framework, the group is transitioning towards a strategic holding-company model designed to enforce capital discipline and make individual business lines self-funding. With more than 94% of first-half capital expenditure already absorbed by its core consumer and enterprise network segments, corporate management is capping subsidiary funding outlays.

An international strategic partner or infrastructure consortium can address this constraint. A well-capitalised buyer brings a lower cost of debt, direct customer channels with global hyperscalers and the immediate equity capital needed to accelerate development. By executing a partial exit, Telkom can crystallise immediate equity value while offloading a substantial capital expenditure liability.

The Risk of Selling the Compounding Asset

The counterargument is equally compelling. The exact metrics that make NeutraDC attractive to private equity funds reinforce the economic case for Telkom to maintain full equity ownership.

Occupancy is optimised, domestic digital consumption is scaling, and the long-term grid runway has already been agreed in principle with PLN. Geographically, the asset captures both secular Indonesian growth and high-margin multinational spillover demand within the Singapore-Johor-Riau digital corridor.

Furthermore, the asset is at the very base of its operational adoption curve. Telkom is not divesting a mature, low-growth utility whose upside has run its course. It is negotiating an exit at a historical high point in structural asset scarcity. By relinquishing control now, Telkom risks pulling the eject handle on its most potent compound growth engine right before the real compounding begins.

In 2024, Telkom was prepared to trade a minority position at a $1 Bn valuation. By early 2026, absolute corporate control was on the table at an implied $1.5 Bn sticker price. With binding offers under active evaluation, the market is about to discover the exact clearing price international capital is willing to bear.

Selling into secular market strength is standard corporate finance. The optimal time to recycle capital is when outside bidders are prepared to capitalise aggressively on future capacity.

Yet the higher the premium commanded by AI-ready, power-secured data centres, the more acute the strategic dilemma becomes for Telkom’s board. If the structural scarcity value of assets like NeutraDC is still accelerating, is Telkom monetising at the peak of the valuation cycle or handing the next owner the most lucrative slope of the compounding curve?

For public markets, the ultimate verdict depends entirely on a single metric Telkom has yet to disclose: the price.