Telkom Indonesia’s recent decision to divest AdMedika, its healthcare technology subsidiary, is more than a financial maneuver—it’s a clear signal that state-owned tech in Indonesia is stepping back from the hard work of real healthcare innovation. This article unpacks the motivations, consequences, and missed opportunities behind the sale, and what it means for the future of digital health in Indonesia.

The Strategic Context: Why Telkom Is Exiting Healthcare Tech

Telkom Indonesia, the country’s largest state-owned telecommunications company, has long positioned itself as a digital transformation leader. Its foray into healthcare through AdMedika—a provider of health insurance administration and digital health solutions—was once hailed as a bold move to modernize Indonesia’s fragmented healthcare system. Yet, in 2024, Telkom announced a “fire sale” of AdMedika, offloading the subsidiary to private investors at a valuation that raised eyebrows among industry insiders.

The rationale offered by Telkom’s leadership is a familiar one: focus on “core competencies” and streamline operations. But this explanation doesn’t hold up under scrutiny. The real reasons are rooted in:

• Chronic underperformance: AdMedika failed to deliver the growth or innovation Telkom promised, largely due to bureaucratic inertia and lack of product vision.
• Political and regulatory risk: State-owned enterprises (SOEs) in Indonesia face constant political interference and shifting regulatory sands, making long-term bets in complex sectors like healthcare unattractive.
• Short-term financial pressures: With Telkom’s core telco business under margin pressure, divesting non-core assets is the path of least resistance to shore up balance sheets.

None of these factors are unique to Telkom, but together they reveal a systemic reluctance among Indonesian SOEs to commit to the long, messy work of healthcare innovation. Instead, the playbook is to dabble, underinvest, and exit when the going gets tough.

What AdMedika’s Sale Reveals About SOE Innovation Culture

On paper, AdMedika had all the ingredients for success: access to capital, a captive customer base, and the implicit backing of the state. In practice, it became a case study in how not to build a healthcare technology company:

• Risk aversion and bureaucracy: Decision-making was slow, with layers of approvals and a culture that punished failure more than it rewarded experimentation.
• Misaligned incentives: Leadership was rotated frequently, with little continuity or incentive to invest in long-term product development.
• Technology as a checkbox: Digital transformation was treated as a compliance exercise, not a strategic imperative. The result: incremental improvements, not disruptive change.

This is not just an AdMedika problem—it’s endemic to SOEs across Indonesia and much of Southeast Asia. When innovation is subordinate to political and financial expediency, the outcome is predictable: half-hearted projects that never scale, followed by quiet retreats.

The Real Losers: Patients, Providers, and the Indonesian Health System

The implications of Telkom’s retreat go far beyond corporate balance sheets. Indonesia’s healthcare system is under immense strain, with chronic underfunding, a fragmented provider landscape, and millions of patients underserved by both public and private insurers. Digital health solutions—if done right—could:

• Streamline claims and reduce fraud in insurance administration
• Enable telemedicine and remote care for rural populations
• Integrate health data to improve outcomes and lower costs

By walking away, Telkom is signaling that these challenges are too complex or unprofitable for state-backed tech. The private sector may pick up the slack, but without the scale and mandate of a national champion, progress will be slow and uneven. The losers are ordinary Indonesians, who will wait longer for the benefits of digital health transformation.

Who Benefits from the Fire Sale?

Every asset sale creates winners and losers. In this case, the immediate beneficiaries are:

• Private equity and local conglomerates: They acquire AdMedika at a discount, with the potential to restructure and flip the asset if market conditions improve.
• Telkom’s financial managers: They can point to a “streamlined” portfolio and improved short-term metrics, even if long-term value is sacrificed.

But the broader ecosystem loses. Without a credible, large-scale digital health player with public interest at its core, Indonesia risks ceding the future of healthcare to fragmented, profit-driven players. This will entrench existing inefficiencies and limit the reach of innovation to those who can pay.

What a Strategic Leader Would Do Differently

If Telkom’s move is a textbook example of short-term thinking, what would a strategic, systems-oriented leader do instead? The answer is not to double down on failed approaches, but to:

• Reframe healthcare tech as national infrastructure: Treat digital health platforms as essential as roads or telecom networks, deserving of sustained public investment and patient capital.
• Build public-private partnerships: Leverage SOE scale and mandate, but partner with agile startups and international players who bring fresh ideas and technical depth.
• Align incentives for real innovation: Reward leaders for long-term impact, not just quarterly results. Create protected “innovation sandboxes” within SOEs where risk-taking is encouraged.
• Set clear, ambitious targets: Move beyond vague digital transformation slogans. Commit to measurable outcomes: reduced claim fraud, increased rural access, improved patient satisfaction.

Most importantly, a strategic leader would recognize that healthcare innovation is not a side project—it’s a generational challenge that requires focus, patience, and a willingness to absorb early failures for long-term gain.

Conclusion: Indonesia’s Digital Health Future at a Crossroads

Telkom Indonesia’s fire sale of AdMedika is a symptom of a deeper malaise: the unwillingness of state-owned tech to engage in the hard, slow work of real healthcare innovation. Unless this mindset changes, Indonesia will remain stuck with incremental progress and missed opportunities, while its citizens pay the price in poorer health outcomes and higher costs. The time for bold, systems-level leadership is now.