Indosat to launch new satellite in 2009

The Jakarta Post, Jakarta

Publicly listed telecommunications firm PT Indonesian Satellite Corporation Tbk (Indosat) is set to launch its second satellite in the third quarter of 2009 to replace its first one, which will be switched off in 2011.

The Palapa-D satellite, to be placed into a geostationary orbit at 113 degrees east longitude, will have a useful lifespan of 15 years and will replace the Palapa-C2 satellite, which has been occupying the same slot since 1996.

The project, worth around US$220 million, has been awarded to France-based telecommunications firm Thales Alenia Space France (TASF), which will build the satellite and launch it in China.

Indosat president director Johnny Swandi Syam said Friday that the new satellite would support the company's cellular network, fixed telephone and fixed data services, as well as its corporate services, comprising telecommunications and data, internet broadband and broadcasting.

At present, Indosat, the country's second largest cellular operator after Telkomsel, has 50 corporate customers, including local, national and international television and radio stations.

"Some 60 percent of this satellite's capacity will be used to support our company's internal backbone, while the remainder will serve our corporate customers," he said during the signing of the project agreement between Indosat and TASF.

The agreement was signed by Johnny and TASF vice president Olivier Badard, and was witnessed by Communications and Information Minister Muhammad Nuh.

With a larger capacity and a wider coverage compared with the previous Palapa-C2 satellite, the Palapa-D satellite will have 40 transponders and will have a footprint that covers Indonesia, the countries of ASEAN, the Middle East, Asia and Australia. The Palapa-C2 only has 34 transponders and its footprint is limited to Indonesia, the ASEAN countries, East Asia and the Middle East.

Financing for the project, Johnny said, was included in the company's capital expenditure allocation of US$1 billion for this year.

Indosat's main competitor, PT Telekomunikasi Indonesia, has launched nine satellites since 1976. The last one, Telkom-2, was launched in November 2005 from French Guyana.

Indosat's satellite business, which includes the company's communications data services, contributed about 13 percent of its overall net profit of Rp 483.9 billion (US$56 million) during the first quarter. The biggest contributor was the cellular business, which accounted for 77 percent of net profit.

This year's first quarter net profit was 26 percent higher than the Rp 383.9 billion recorded in the same period last year on the back of an increase in customers.

Most of the company's capital expenditure this year will go on the building of between 3,500 and 4,000 new relay towers.

As of the end of March, the company had built 7,666 relay towers, representing a 28 percent increase on the 5,971 towers it had at the end of the first quarter last year.