Indonesia telecom firm to boost business foothold in Saudi Arabia

Indonesia telecom firm to boost business foothold in Saudi Arabia

State-owned telecommunications operator PT Telekomunikasi Indonesia (Telkom) is aiming to strengthen its grip in Saudi Arabia, targeting millions of Indonesians living in the Middle Eastern country.

Telkom’s chief representative in Saudi Arabia, Zulaidin Hasbi, said the oil-rich country was one of few countries with a large Indonesian migrant population.

According to the Agency for the Placement and Protection of Indonesian Migrant Workers (BNP2TKI), 4.3 million documented Indonesians are working overseas, some 1.2 million in Saudi Arabia, another 1.2 million in Malaysia and the remainder spread in various countries.

“We have a strong belief that Saudi Arabia is among countries with big business potential for us,” Hasbi said after the signing of partnership agreement with Saudi-based conglomerate Al-Lama Group Friday evening.

There were currently around 1.2 million Indonesians living in Saudi Arabia, with around 320,000 in Jeddah, 200,000 in Mecca and 120,000 in Riyadh, he said.

Two other cities with a large number of Indonesian migrants were Medina and Dammam, with 90,000 and 70,000 people, respectively, he added.

Al-Lama president and CEO Farouk Kurashi said after the signing ceremony that his group was very much willing to grow with Telkom, particularly to net Indonesian migrant workers.

“We believe that in the next two to three years, with a new labor agreement between Saudi Arabia and Indonesia, the number of Indonesian workers in Saudi will increase to around 2.5 million,” he said, adding that the regulation was expected to end Indonesia’s moratorium on the placement of informal migrant workers in Saudi Arabia.

Manpower ministers of both countries signed in February a memorandum of understanding (MoU) on the protection of Indonesian migrant workers.

Kurashi said that the increasing number of Indonesians working in Saudi Arabia also meant a greater demand for reliable telecommunications to keep them connected with people at home.

Those were things that Telkom and Al-Lama were working on, Kurashi added.

Hasbi said that the Saudi Arabian market was very promising, especially with a huge number of Indonesian migrant workers spending part of their income on telecommunications.

The telecommunication expenses of those migrant workers are relatively high, with Indonesian maids recording an average rate per unit (ARPU) per month of 80 Saudi riyal (US$21.3), drivers around 90 to 110 riyal and blue collars between 120 and 220 riyal.

Telkom’s monthly ARPU for its prepaid card, usually used by individual subscribers, meanwhile, only hit around 30,000 rupiah ($2.47) as of the first half this year.

Besides expanding its telecommunication business, Telkom will also strengthen its other business units in Saudi.

Telkom enterprise and business service director Muhammad Awaluddin said recently that his firm targeted to launch next year a remittance service for Indonesia migrant workers in Saudi Arabia.

“[For remittance business], we hope that next year we will have presence in two more countries in the Middle East, one of which is Saudi Arabia,” he told reporters.

The total funds sent home by all Indonesian overseas workers amounted to $7.41 billion last year, with $1.7 billion coming from Indonesian migrant workers in Saudi Arabia, according to data from the BNP2TKI and Migrant Care.

Al-Lama’s Kurashi said that his firm was also interested in partnering with Telkom to develop its business operations in other sectors other than telecommunications.

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