Telkom Near New Satellite Deal With Russian Firm

The Jakarta Globe, Aditya Wikrama, January 19, 2009 

The country’s largest telecommunication company, PT Telekomunikasi Indonesia Tbk, is close to signing a deal with a Russian firm on a third satellite project, called Telkom 3, a company director said on Sunday. 

Indra M. Utoyo, Telkom’s IT director, said the Russian company Information Satellite Systems, or Reshetnev, had won the tender to build and launch the Telkom 3 satellite in mid-2011, at an undisclosed cost of less than $200 million. 

“We’re still discussing the final terms of the contract, but we hope we can sign it soon,” Indra told the Jakarta Globe. “They’ve won the contract, beating Orbital in the final round of the electronic auction bid.” 

The US-based firm Orbital Sciences Corp. had submitted a final bid of slightly over $200 million, he said, claiming that the tender was done through a first-ever electronic auction. 

“We’ve done the first e-auction in the world for any satellite tender,” Indra said. 

The new satellite, which will have 18 transponders, will replace the Telkom 2 satellite and be used for the TelkomVision pay TV service, data and Internet transmissions, and applications for earth observation. Telkom hopes the new satellite will contribute around 5 percent to the company’s annual revenues. 

News of the tender was first reported over the weekend by the BBC, quoting Russian press service reports. 

“The project entails developing and placing into orbit the Telkom 3 satellite, making the ground control system and also providing training and technical support for its operation,” the BBC said, quoting the Interfax-AVN news agency. 

Interfax-AVN reported that the tender results were announced in December, but Telkom had remained silent until now. 

Indra said Reshetnev was chosen over Orbital because the Russian firm offered advanced technology to any country. 

“Technically, they’re about the same, but after considering the track records and the technical value,” Indra said, “and when combined with the price, we chose the Russian firm.” 

The final value of the contract excludes insurance premiums, which Indra said were between 11 percent to 16 percent of the satellite’s value, “depending on the world’s satellite situation when the insurance contract is signed.” 

Telkom had previously estimated that the satellite would cost between $150 million and $200 million, so the contract should be well within its original target. 

Rinaldi Firmansyah, Telkom’s president director, said recently that around 40 percent of the satellite’s cost would be financed internally, with the rest from external sources, which he did not name. 

According to the Russian Federal Space Agency, the satellite will be based on the new medium-class Ekspress-1000N platform and have 32 C-band transponders and 10 Ku-band transponders. It will weigh 1,600 kilograms, have an output of 5.6 kilowatts, a service life of 15 years, and should be manufactured and placed into orbit by 2011. 

Indra said that the satellite would be launched within 29 months after the contract is signed.