Summary Bullets:
• Within the ASEAN enterprise ICT market, the conflict has no direct impact, but indirect effects are becoming increasingly apparent due to the higher crude oil prices and rising electricity costs.
• The industry can expect lower ICT spending, higher operational costs for telcos, and slower AI momentum.
The conflict in the Middle East has entered its third week and is expected to continue for several more weeks. Its impact can already be seen globally across multiple sectors, as discussed in detail in GlobalData’s The Middle East Conflict – Executive Briefing, March 10, 2026.
Despite being over 5,000 km away, Southeast Asian countries are already experiencing tangible domestic effects. The most significant is the surge in crude oil prices and supply shortages, which are driving energy costs and triggering broader economic consequences, including inflation. Beyond energy, disruptions to supply chains and trade flows are emerging, especially in key Southeast Asian sectors such as agriculture, electronics, and tourism. Governments across the region are taking various measures to mitigate the impacts. The Philippines has introduced a four-day workweek, which will increase remote working needs. Thailand has activated its energy emergency surveillance center and suspended crude oil exports. Vietnam has indicated potential flight reduction.
Within the ASEAN enterprise ICT market, the conflict has no direct impact, but indirect effects are becoming increasingly apparent. This is mainly due to the higher crude oil prices and rising electricity costs. On the demand side, telcos and service providers may face slower uptake of ICT solutions, as enterprises scale back projects and defer or cancel deployment plans. Cost pressures are growing, pushing organizations to tighten ICT budgets and redirect spending toward core business priorities.
On the internal operations, telcos and service providers are seeing a rapid increase in energy consumption fueled by higher data usage and AI adoption. Many are also actively expanding their ESG initiatives and transitioning to clean energy to power their operations. For example, Globe Telecom plans to deploy 100% renewable energy across more than 3,000 cellular sites by 2028. AIS Thailand is on track to achieve its renewable energy usage to 5% of total consumption, having already reached 3.8% in 2025. However, fossil fuels remain widely used for data centers, cellular sites, facilities, and backup power sources (e.g., genset). Higher energy prices would significantly drive their operational costs and affect margins. Nevertheless, this could also accelerate telcos/service providers’ initiatives to transition to renewable energy.
Rising energy costs would also have a direct impact on AI data centers. There is a growing trend of AI data center in the region to address the rapid increase in market demand. Investment is rapidly accelerating. In Malaysia, YTL in partnership with Nvidia, recently launched its AI data center in Johor, while Telekom Malaysia and Singtel Nxera announced a joint venture to develop a 200 MW facility in the country. In Indonesia, Equinix launched its first AI-ready facility in Jakarta in 2025, while Digital Edge is developing a 500 MW data center. However, as AI gains traction across Southeast Asia, higher energy prices translate to higher AI deployment costs. This could raise barriers to deployment and potentially slow down the AI momentum in the region.
Besides, countries and organizations are revisiting hybrid working. This creates an opportunity for service providers to sell network solutions, communications services, cloud, cybersecurity, collaboration platforms, and AI applications. While most enterprises have a hybrid working infrastructure in place (e.g., SD-WAN, SASE, endpoint management, UCaaS) during the pandemic six years ago, the technologies and requirements have since evolved. AI, including agentic AI, is now commonly used to transcribe, summarize meetings, and automate workflows; ZTA/SASE has become a standard tool for enterprises; and SD-WAN and 5G are widely available for secure and reliable home office networks.