Telkom-2, Spaceway 2 Satellites Successfully Launched by Araine 5

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Officials with PT Telkom hope to use their new Telkom-2 satellite, launched as a replacement for the aging Palapa B4 spacecraft, to bolster the Indonesian company’s commercial sales in the highly competitive East Asian satellite market.

Unlike some nations in Asia, Indonesia follows the “Open Skies” market principle in which a domestic satellite operator like Jakarta-based PT Telkom must compete with foreign satellite operators even on its home turf .

Telkom-2, launched Nov. 16 aboard an Ariane 5 ECA rocket with DirecTV Inc.’s Spaceway 2 high-definition television satellite for the United States, will replace Palapa B4 as soon as possible, Telkom officials said.

Palapa B4 was launched in May 1992. Like Telkom-2, it carries 24 C-band transponders and is used for Indonesia’s national telecommunications network as well as for TV and radio broadcasting. Telkom also operates the Telkom-1 satellite.

Garuda Surgado, Telkom’s chief operating officer, said after the launch that Telkom -2’s footprint from its 118 degrees east longitude orbital slot would stretch from southern India to the Island of Guam.

Palapa B4 was partly taken out of service in 2004, and PT Telkom was forced to lease satellite capacity from regional competitors while waiting for Telkom-2 to be launched.

In 2004, Telkom reported satellite-lease revenues of $22.7 million, down 22 percent from 2003 because of harsh market conditions that have affected most Asian satellite operators .

For the first nine months of 2005, Telkom has seen a slight turnaround in satellite-lease revenues, with a total for the period of $17.25 million, an 8-percent increase over the same period in 2004.

Telkom purchased the Telkom-2 satellite from Orbital Sciences Corp. of Dulles, Va., in October 2002 for $73.1 million. A month later, it signed a $62.9 million contract with the Arianespace launch consortium of Evry, France, for a launch aboard an Ariane 5 rocket .

The satellite originally was slated to launch aboard an Ariane 5G but was pulled off that flight when it showed anomalies in testing. It was subsequently returned to Orbital Sciences for reworking and later assigned to the Ariane 5 ECA vehicle.

Telkom said in a report to Indonesian stock market authorities that the company in October 2004 modified its Arianespace contract to include a reflight option in the event of a launch failure, or financial compensation in the event of a partial launch failure. Telesat Canada of Ottawa acted as Telkom’s technical consultant for the Telkom-2 program.

Telkom purchased an insurance policy providing coverage of $79.3 million in the event of failure between rocket ignition and the end of the satellite’s first year in orbit. A separate policy, valued at $71 million, was purchased to cover in-orbit operations for the first year as well .

Boeing Satellite Systems International of El Segundo, Calif., built the Spaceway 2 satellite. It is the second Spaceway satellite to be launched. The first became operational in October after a launch in April.

The two Ka-band Spaceway satellites originally were part of a three-satellite package that DirecTV planned to use for two-way high-speed Internet links for businesses. DirecTV subsequently scrapped that business plan, opting to modify the first two spacecraft to provide high-definition television to U.S. households. DirecTV expects to deploy high-definition service with 500 channels available to 12 cities this year and 24 cities in 2006.

The third Spaceway satellite is one of the assets owned by Hughes Network Systems of Germantown, Md., a former DirecTV subsidiary that has been sold to SkyTerra Communications Inc.

DirecTV’s decision to modify the two Spaceway satellites for television resulted in a $1.47 billion writedown of the satellites and related equipment. The remaining value, according to DirecTV, was $335 million.

Chicago-based Boeing said in October that it had a potentially substantial liability in the event of a Spaceway 2 failure at launch or in orbit because the launch was not fully insured. The company could face a liability of between $65 million and $315 million.