T

he country's largest telecommunications company, PT Telekomunikasi Indonesia (Telkom), aims to expand its remittance business to Japan this month, targeting Indonesian migrant workers living in the East Asian country.

Telkom enterprise and business service director Muhammad Awaluddin said recently that his firm would launch the remittance service in Japan by the third week this month.

'We will sign a partnership agreement with Tokyo-based remittance company Kyodai Remittance in the third week of November. We are currently setting up the system,' he said.

The remittance transaction value from around 40,000 Indonesian migrant workers in Japan was relatively high, hitting between Rp 10 million (US$820.3) and Rp 15 million per transaction, he said.

Awaluddin said that Telkom did not set any specific target from its Japan's soon-to-be-launched remittance service this year, but it aspired to handle around Rp 100 billion in remittances from Japan next year.

Telkom, which pocketed Rp 65.8 trillion in revenues as of September, is currently expanding its remittance business to a number of countries that have a significant number of Indonesian migrant workers.

The firm has previously offered its remittance service in Hong Kong and Taiwan. The state-owned company also launched its remittance service in Malaysia last month, partnering with Hong Leong Islamic Bank.

The service, dubbed Delima (pomegranate), was expected to handle around Rp 10 billion in only two months, from November to end of this year, Awaluddin said.

'Remittance value per transaction in Malaysia usually hit around Rp 1 million to Rp 2 million. However, the number of migrant workers in the neighboring country is quite huge,' he said.

Indonesian migrant workers residing in Malaysia reach around 2 million people with total remittances of around $2.5 billion last year, the biggest compared to total remittances flowing to Indonesia from other countries, according to Telkom.

Based on data from the Agency for the Placement and Protection of Indonesian Migrant Workers (BNP2TKI) and Migrant Care, the total funds sent home by Indonesians working overseas amounted to $7.41 billion last year.

Awaluddin said that besides making presence in remittance service in the Asia-Pacific region, Telkom plans to launch the service in Saudi Arabia by the second quarter next year.

The gulf country was currently home to around 1.2 million Indonesian migrant workers with total remittances of around $1.7 billion, according to data from BNP2TKI and Migrant Care.

Telkom aims to double the amount of international remittances that it will handle to around Rp 600 billion and Rp 700 billion next year from the estimated transaction value of Rp 300 billion this year, driven by projected growing international remittances.

The World Bank had previously predicted that in 2014 total remittances flowing to developing countries, including Indonesia, would increase by around 7.8 percent.

Awaluddin said that for this year alone, Hong Kong would make up between 80 and 85 percent of total estimated value of remittance transactions handled by Telkom, while the remaining 15 to 20 percent would be from Taiwan and Malaysia.

Telkom's shares, which are traded under the code TLKM at the bourse, jumped by 0.18 percent to Rp 2,735 a piece at Thursday's close from Rp 2,730 in the previous closing.