Telkomsel and Pegatron Demonstrate That Investment in Digital Transformation in the ASEAN Region Is Accelerating

Integrating 5G into the fabric of industrial operations has yielded varying results in different markets. The most substantial deployments have been in Northeast Asia, especially in China. However, Southeast Asia is building momentum. This was recognized during the Mobile World Congress 2026 (MWC26) Shanghai GLOMO Awards Asia. Telkomsel and Pegatron won the Best Digital Innovation for Industrial Transformation in Asia award for their deployment of a 5G Standalone (SA) private network at PT Pegaunihan Technology Indonesia, Pegatron’s 85,000 square-meter smart factory in Batam, Indonesia. The project was first announced as a joint partnership at MWC in March 2025. Telkomsel Enterprise provided connectivity, and HPE Aruba delivered a Networking Private 5G Core. Pegatron had an aggressive smart manufacturing agenda that relied on 1,200 secure private wireless Internet of Things (IoT) devices to enable Artificial Intelligence (AI)-, automation-, and IoT-based production workflows.

Telkomsel and Pegatron demonstrated they were able to spin up a range of digital transformation solutions such as: IoT-based machine monitoring, production control, AI-enabled quality functions, and industrial mobility. In a second phase, the partnership was able to add Automated Guided Vehicles (AGVs), predictive maintenance, robotics, and a final assembly evaluation solution. Telkomsel has reported notable benefits from the deployment:

• Production line efficiency gains: +70%
• Machine productivity: +5%
• Unplanned operational disruptions: 10% reduction
• AGV uptime: up to 99.9%
• A 30% reduction in potential human error during quality inspections

The Return on Investment (ROI) metrics do demonstrate a constructive ROI that should please the manufacturing vendor’s Chief Financial Officer’s (CFO) department, but the C-suite also emphasized that the principle rationale for the platform was to deliver stable connectivity, rapid response, and secure systems for the company’s industrial operations.

Will 5G support smart manufacturing in Southeast Asia? 5G is being adopted in industrial scenarios, but planners need to factor in the lifecycle of existing equipment and have walked themselves through the deployment phase in advance. 5G connectivity will grow, but it is being seen as one connectivity solution that complements Wi-Fi and Ethernet-based digital transformation systems. Indeed, AI integration is very much seen as part of the industrial transformation process. National and inter-regional organizations are determined to see greater digital transformation and AI upskilling. In 1Q 2026, the Association of Southeast Asian Nations (ASEAN) Office releases its next 5-year plan—the ASEAN Digital Masterplan 2030.

The ASEAN Digital Masterplan 2030 stresses that ASEAN countries need to move beyond connectivity toward a more integrated, trusted, and AI-enabled digital economy. Governments need to prioritize foundational infrastructure, including broadband and 5G expansion, cloud and data center development, digital Identity (ID), submarine cable resilience, and Digital Public Infrastructure (DPI) to support interoperable cross-border services.

While many ASEAN countries have undertaken government-initiated digital modernization plans, more needs to be done to build increasingly user-centric platforms, and integrate AI- and data-driven policymaking into not just national but also state level planning. On the economic side, ASEAN aims to accelerate startup innovation, open data use, Micro, Small, and Medium Enterprise (MSME) digitalization, and industrial transformation through the promotion of smart factories, digital twins, and digital trade enablers under the Digital Economy Framework Agreement (DEFA). Regarding AI, the ASEAN Office emphasized the need to operationalize responsible AI frameworks, build regional AI safety capacity, develop AI standards, and apply AI to sustainability, climate resilience, and resource management.

Investment in digital transformation continues to build. ABI Research’s latest Industrial and Manufacturing Markets Forecast market data (MD-IMMF-24) estimates that worldwide digital transformation spending stood at US$197.4 billion in 2025 and that spending is anticipated to grow to US$382.4 billion at a 14.1% Compound Annual Growth Rate (CAGR) over the next 5 years. In the ASEAN region, it will be critical for countries to take a collaborative stance on digital transformation and AI, not just with firms within the ASEAN community, but even with multinational firms as the cross-fertilization of investment and ideas will accelerate growth.