2013 Top Fixed Satellite Service Operators | Indonesia: A Turbulent Telecom Market

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Memo to Indonesia’s new president, who will be selected during July 9 elections: One sign that Indonesia’s enormously promising domestic satellite telecommunications market could do with less rock-and-roll is when two satellite owners, both claiming government backing, order competing satellites for the same orbital slot.

This was too much even in Southeast Asia, where Wild West-type orbital-slot maneuvers do occur as no fewer than 18 satellite fleets have coverage.

PT Indosat of Indonesia ordered a satellite for 150.5 degrees east from Orbital Sciences of Dulles, Virginia, in mid-2013. Whether metal-cutting has started on that contract is not clear.

A year later, Indonesia’s BRI bank — yes, just the bank — ordered its own satellite for 150.5 east from Space Systems/Loral of Palo Alto, California, following a signing ceremony witnessed by outgoing Indonesian President Susilo Bambang Yudhoyono.

It’s nice to have a president at your contract signing ceremony, but Yudhoyono is barred from seeking a third presidential term, meaning a possible reset for the correlation of forces backing each of the two satellites.

The 150.5 degrees east orbital slot was made available following a 2013 decision by the Indonesian Ministry of Communications and Information Technology that PT Indosat would no longer have rights to the slot as of September 2015. Indosat’s aging Palapa-C2 satellite was moved to the 150.5 degrees east slot after it transferred its traffic to Palapa-D in 2009.

The tug-of-war over this orbital position is occurring at a time when Indonesia’s 40 million households — with a pay-TV concentration of less than 15 percent — are being wooed by a half-dozen direct-to-home satellite broadcasters and many of those 18 satellite companies with beams covering Indonesia.

Indosat said its Palapa-D and Palapa-C2 satellites compete directly with a dozen satellites operated by at least six companies — AsiaSat and APT Satellite Holdings, both of Hong Kong; China Satcom; Thaicom of Thailand; Malaysia’s Measat; and Intelsat of Washington and Luxembourg.

This does not include Indosat’s domestic competitors, PT Telkom and Pasifik Satelit Nusantara (PSN), both of which are looking to grow.

Indonesia has a relatively open satellite regulatory regime under which foreign satellite operators are granted landing rights so long as Indonesian operators have reciprocal rights in these companies’ home nations.

PT Indosat said in its 2013 annual report that pricing for satellite transponders — using 36-megahertz equivalents — is holding steady at between $1.2 million and $1.3 million per year.

Indosat said that as of Dec. 31, its Palapa-D satellite’s Ku-band capacity was fully booked, and that its standard C-band payload was 86 percent full. The company reserves its Palapa-C2 for domestic Indonesian use but sells Palapa-D bandwidth to third parties. The company said Palapa-D bandwidth lease revenue was $22.8 million in 2013.

PT Telkom has said its Telkom 1 satellite will reach its end of life in 2015. Telkom 2 has fuel until at least 2020. Telkom 3 was lost following an August 2012 failure of Russia’s Proton rocket, which was also carrying a Russian domestic satellite. The failure forced Telkom to lease capacity from third parties. The company has lease contracts with Sky Perfect Jsat, Eutelsat, China Satcom and Intelsat for a total of 30 transponders.

A promised Telkom 3S satellite, originally intended to take over from Telkom 1, has apparently been delayed.

Telkom 3S, which could include Ka-band, will be acquired in partnership with undisclosed parties, Telkom said.

Telkom owns 22 percent of PSN, whose longstanding chief executive, Adi Rahman Adiwoso, announced in late 2013 that PSN would be the third commercial customer — after Satmex of Mexico and ABS of Bermuda — for a Boeing all-electric 702SP satellite.

As was the case with Satmex and ABS, the appeal of the Boeing platform is enhanced when two of them are launched together on a Space Exploration Technologies Corp. Falcon 9 rocket, priced at about $60 million or $30 million per satellite. PSN is still waiting for Boeing to find a co-passenger for a SpaceX launch, and until then the contract for the PSN VI satellite, intended to operate at 146 degrees east, has not gone into effect, according to industry officials.

 

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