EXECUTIVE BRIEF: Indonesia’s Biometric SIM Mandate Signals Structural Shift in Digital Identity Governance
Indonesia’s digital economy continues to scale rapidly, driven by fintech adoption, e- commerce expansion, ride-hailing platforms, and mobile-first consumer behaviour. With more than 350 million mobile connections, SIMcards remain the primary access layer for payments, authentication, and platform participation.
The government’s new SIM enforcement framework — mandating biometric registration for Indonesian citizens and passport-based verification for foreign users — signals a shift from fragmented telecom compliance toward astate-backed digital identity enforcement layer. The strategic question ahead is whether Indonesia can leverage this framework not only to curb fraud, but also to establish a scalable foundation for secure digital economic growth.
Indonesia’s SIM Registration Shift: Strengthening the First Layer of Digital Access
Indonesia currently has around 400 million active SIM cards in circulation, exceeding its total population. This reflects widespread multi-SIM usage for personal and business needs, driven by network coverage optimization andemerging use cases such as IoT.
However, weak historical SIM enforcement has created systemic vulnerabilities. According to the Hiya Global CallThreat Report 2025, Indonesia ranks first globally for spam calls, with 89% of calls categorized as nuisance,fraud, or scam-related — significantly higher than Hong Kong (70%) and the Philippines (55%). This highlights the scale of digital abuse enabled by anonymous SIM ownership and Indonesia’s high SIM-to-population ratio.
In response, the government has introduced stricter enforcement — mandating biometric registration for Indonesian citizens and passport-based verification for foreign users. Formalized under Communications andDigital Ministerial Regulation No. 7 of 2026, the policy will integrate SIM registration with the national population database managed by Population and Civil Registration Agency or Dukcapil.
The rule applies primarily to new SIM activations, while existing users may voluntarily re- register. This approach focuses on tightening future access points rather than immediately restructuring the legacy SIM base.
SIM Registration as Digital Infrastructure
SIM cards now function as digital identity anchors across Indonesia’s platform economy:
- Authentication Layer — SMS OTP remains a core verification method for fintech, e- commerce, and digital banking onboarding.
- Transaction Enablement — Phone numbers underpin mobile wallets, P2P transfers, and platform-linked accounts.
- Platform Access Control — Ride-hailing, logistics, and gig platforms rely on mobile identity forworkforce and merchant
By tightening SIM registration through biometrics and official ID integration, Indonesia is strengthening traceabilityacross the entire digital ecosystem and reducing anonymous access.
Implications for High-Growth Digital Sectors
The new enforcement framework carries direct business impact:
- Fintech & Digital Payments — Lower fraud risk and stronger KYC
- E-commerce & Marketplaces — Improved seller verification and consumer
- Ride-Hailing & Gig Platforms — Reduced fake accounts and stronger workforce
- Telecom Operators — Higher compliance costs, deeper system integration, and operational complexity.
SIM regulation is no longer peripheral compliance — it is becoming core digital infrastructure. Severe Risk: Centralized Biometric Data Exposure
Unlike passwords or ID numbers, biometric data is permanent. Once compromised, fingerprints or facial datacannot be reset or replaced, making any breach irreversible in impact.
While the biometric SIM mandate strengthens identity verification, it also concentrates highly sensitive biometricdata across interconnected government and telecom systems. Integrating SIM registration with Dukcapil’snational database expands the digital attack surface and amplifies the potential impact of a single cyber incident
Given Indonesia’s track record of large-scale data breaches across public institutions and digital platforms, this consolidation increases both breach probability and systemic damage. A major incident could compromise millions of identities at once, disrupt authentication across fintech, banking, e-commerce, and governmentservices, and trigger cascading trust, regulatory, and reputational consequences.
The Potential Risks from Centralized Data Biometric:
- Single-Point-of-Failure Risk: Centralized biometric storage increases exposure to large-scale breaches.
- Expanded Attack Surface: Integration between telecom operators and Dukcapil creates more entry pointsfor cyber
- Cross-Sector Impact: A breach may affect multiple industries simultaneously, including fintech, banking,e-commerce, and public
- Trust Erosion Risk: Public confidence in digital identity systems and government platforms could deteriorate following major incidents.
Skylight’s Perspective
Indonesia’s biometric SIM mandate reflects a broader push to strengthen digital governance as the platformeconomy scales. However, identity centralization is advancing faster than the country’s cybersecurity maturity.Without intervention, this imbalance risks turning fraud prevention into a new systemic vulnerability.
If unaddressed, weak institutional safeguards could undermine public trust, increase regulatory exposure for platforms, and create structural risk across fintech, telecom, and digital services. Major Action is required acrossthree strategic pillars:
- Security Capacity Must Catch Up: Identity enforcement is only as strong as the infrastructure protecting it. Cyber resilience must become a national digital
- System Architecture Must Evolve: Centralized verification models require modernization to reducelarge-scale exposure
- Governance Must Be Enforceable: Regulatory ambition must be supported by real complianceoversight and accountability
To ensure the SIM reform strengthens — rather than destabilizes — Indonesia’s digital economy, coordinated action is needed across policy, infrastructure, and industry standards.
Latest Update
- Tsingshan–UNIDO Pilot Project Collaboration on Sustainable Nickel Industrial Park Management
- The United Nations Industrial Development Organization (UNIDO) has designated Indonesia’s Weda Bay Industrial Park (IWIP), owned by Tsingshan Group, as a pilot project for sustainable nickel industrial park.
- The Tsingshan-UNIDO–IWIP partnership is structured within a three-year timeframe with a focus on improving environmental, social, and governance standards in industrial parks.
- The partnership is implemented through four main pillars:
- Circular economy development;
- Industrial capacity building;
- Community empowerment, and
- Strengthening green supply chain management
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- Its activities include improving resource efficiency, implementing cleaner production, strengthening human resource capacity, utilizing green technology, applying international standards, andreducing environmental impacts throughout the industrial value chain.
- In this partnership, UNIDO will provide technical assistance and capacity building, while Tsingshan Holding Group supports implementation at the industrial park level.
- The experience gained from developing IWIP can serve as an initial example for the development of sustainable industrial park in other regions of Indonesia
- PT Ultrajaya Milk Industry & Trading Company Tbk Invests IDR1.1 Trillion to Support Free Nutritious Meal (MBG) Program
- PT Ultrajaya Milk Industry & Trading Company Tbk (ULTJ) is committing an additional IDR 1.14 trillion (US$ 68 million) in capital expenditure to expand UHT milk supply capacity in support of the MBG
- Ultrajaya is among Indonesia’s leading producers of aseptic dairy and beverage products, with a strong consumer portfolio including Ultra Milk, Ultra Mimi, Sari Kacang Ijo, and Teh Kotak.
- In December 2025, the company commenced operations at its new manufacturing facility located inMM2100 Industrial Park, Bekasi The facility is equipped with three UHT production linesdedicated to 125 ml and 200 ml packaging formats tailored for MBG distribution. Additional lines are scheduled for installation starting March 2026.
- The plant has adopted Industry 4.0 manufacturing systems to enhance productivity, traceability,and quality Key technologies include Automated Guided Vehicles (AGVs), autonomous forklifts, Manufacturing Execution Systems (MES), and ASRS-based warehouse management systems.
- The facility also integrates an advanced Wastewater Treatment Plant (WWTP) with ultrafiltrationtechnology, enabling a significant portion of liquid waste to be recycled and reused within production processes.
- On the upstream side, Ultrajaya currently operates two dairy farms in Bandung and North Sumatra, managing approximately 7,000 cattle, and plans to invest in an additional 4,000 dairy cows to strengthen domestic fresh milk supply resilience.
- US$ 1.4 Billion Data Centre Investment Pours into GIIC
- Digital Edge, a leading Singapore-based data centre platform focused on building and operatingadvanced, energy-efficient, and highly connected data centres in Asia, announced a US$4.5 billion investment to establish a giant data centre in Bekasi.
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- A 500 MW data centre will be established at the GIIC Industrial Park in Bekasi under the nameCGK The capacity at CGK Campus can be increased to 1 GW. Construction is planned in stages with the first operational target at the end of 2026. The next phases are targeted to be operational in the first quarter of 2027 and the second quarter of 2027.
- CGK Campus is designed with high standards of efficiency and sustainability, ranging from anannualized PUE target of 25, which is one of the best in the hyperscale class, to the application ofdirect-to-chip liquid cooling technology to support high-intensity AI workloads, to the use of waterrecycling systems and the integration of renewable energy.
- CGK Campus is built 40 kilometres from Digital Edge’s other data centers located in central Jakarta,namely EDGE1 and EDGE2, with a total capacity of 4,600 racks and 29 MW.
- Indonesia Secures UAE Developer Partnership for Nusantara Capital Project
- Indonesia’s Nusantara Capital Authority (OIKN) has officially partnered with major UAE-based construction and development firm Ayedh Dejem Group for a mixed-use project in the Nusantara Capital Project (IKN), on January 2026.
- Under the agreement, Ayedh Dejem Group will utilize 7 hectares of land in the Core Government Area1A, located next to Plaza Bhinneka Tunggal Ika. The development will include office buildings, commercial spaces, a shopping mall, and a mosque.
- The estimated investment value is around IDR4 trillion (approximately US$238.4 million). The project will begin with detailed design planning, followed by licensing and contractor bidding, aprocess expected to take up to one and a half years.
- Physical construction is scheduled to begin in mid-2027 and continue in stages over the following five years, reflecting the long-term, staged rollout of core urban infrastructure in Nusantara.
- Indonesia to Set Tin Reference Price to Stabilize Market
- As one of the world’s largest tin producers, Indonesia is preparing to introduce a minimumreference price to stabilize the domestic market and shield local miners from global price volatility.
- The regulation will establish a minimum production cost benchmark, creating a price floor to prevent international market fluctuations from disproportionately impacting small-scale and community miners.
- To accelerate implementation, the Ministry of Energy and Mineral Resources is coordinating closely withHouse Commission XII, with the policy expected to strengthen price stability and incentivize downstream tin processing investment, particularly in Bangka Belitung.
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- This move comes amid a sharp rally in global tin prices, which reached a record high of over US$53,000 per ton on January 14, underscoring the growing strategic importance of Indonesia’s tin sector governance.
- Osaka Steel Exits Indonesia
- Major Japanese steelmaker, Osaka Steel will suspend operations at its Indonesian subsidiary PTKrakatau Osaka Steel (KOS) after persistent losses and weakening steel demand following Indonesia’s infrastructure budget cuts.
- The decision was approved by Osaka Steel’s board on January 23. KOS, established in 2012 as ajoint venture with state-owned PT Krakatau Steel and operational since 2017, supplies reinforcingbars and small- to medium- section steel products to the domestic market.
- Although the subsidiary returned to profitability in 2021, it has recorded losses since fiscal year Conditions deteriorated further in early 2025 as government infrastructure spendingreductions led to declining demand, intensified competition, margin pressure, and sustainednegative free cash flow.
- Production at KOS will cease on April 30, 2026, with business operations fully suspended by June 30, Osaka Steel holds an 86% stake in the US$100 million facility located in Cilegon, Banten, andexpects to book withdrawal- related losses, with final figures to be determined.
Latest Update – Japanese Market Movement
- Honda Introduces Hybrid “Prelude” Model in Indonesia – PT Honda Prospect Motor has officially launched the Honda Prelude in Indonesia, marking the first introduction of this hybrid sports car inSoutheast The Prelude is a key part of Honda’s electrification strategy, designed to balance drivingenjoyment with everyday practicality. Pre-orders began on January 23, 2026, with a price set below IDR 1 billion (~USD58,250). Customer deliveries are scheduled to start in May 2026, positioning Indonesia as astrategic market for Honda’s hybrid technology.
- Island Fisheries Revitalization Project Supported by JICA – Natuna Regency, located in Indonesia’sNatuna Islands, is rich in fishing resources but faces challenges due to underdeveloped infrastructure and supply chains. Since 2021, the Japan International Cooperation Agency (JICA) has supported the regionby renovating fishing ports, building cold storage facilities, and providing fisheries processing training. In 2024,Natuna’s fish catch reached 140,000 tons, valued at IDR 3.48 trillion, with skipjack tuna as the most caught species. JICA’s ongoing projects include constructing a new fish market in Ranai by 2032, featuring restaurants and tourist attractions to boost the local economy and improve fishermen’s livelihoods.
- Nitori Opens Sixth Store in Indonesia – Nitori Holdings Co., Ltd. opened its sixth store in Indonesia,”NITORI Summarecon Mall Bekasi 2,” on February 4, This marks the 1,061st store in Nitori’s globalnetwork. Located in a key residential area, the store caters to daily needs and weekend leisure activities.This expansion aligns with Nitori’s mission to provide a rich and comfortable lifestyle globally, as thecompany continues to grow its international presence.
- Agreement Reached on Tariff Elimination for Canned Tuna Exports to Japan – Indonesia and Japan have agreed to eliminate tariffs on canned tuna, canned bonito, katsuobushi (dried bonitoflakes), and other processed tuna and bonito products under the amended Japan–Indonesia EconomicPartnership Agreement (EPA). The agreement signed in 2024, and is being implemented with facilitatedaccess as of early 2026, will boost Indonesia’s seafood exports to In 2023, Indonesia exported USD632.7 million worth of seafood to Japan, with tuna and bonito products accounting for 25% of the total.
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