Indonesia ordered to pay Avanti $20 million for missed satellite lease payments

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WASHINGTON — Avanti has been awarded $20 million in a dispute with Indonesia’s government over missed payments on a borrowed communications satellite, the British satellite operator announced June 7.

Indonesia’s Ministry of Defence borrowed Avanti’s Artemis satellite in November 2016 to prevent losing L-band spectrum rights at the 123 degrees east orbital slot previously held by Garuda-1, a 15-year-old satellite Indonesia deorbited in 2015.

Indonesia had agreed to pay Avanti $30 million for the relocation and use of the Artemis satellite, but stopped making payments after giving Avanti just $13.2 million of what it owed.

After months without payment, Avanti took Indonesia’s defense ministry to arbitration last August. In November, with no paying customer for the 16-year-old satellite, Avanti deorbited Artemis.

On June 6, a British arbitration tribunal ruled that Indonesia’s defense ministry owes Avanti $20 million and gave Indonesia until July 31 to pay.

In May, Indonesia’s defense ministry said it stopped making its Artemis lease payments because it didn’t have the money. Losing the L-band slot, it said, would set back the nation’s defense capabilities.

Under International Telecommunication Union rules, Indonesia stands to lose the L-band slot if it is left vacant for three years.

L-band satellite communications are often used to connect maritime vessels, making the orbital slot and accompanying frequencies of heightened importance for a nation that holds the title of world’s largest archipelago, comprised of more than 17,000 islands.