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Telkom to launch new satellite by end of 2004

| Source: JP

Telkom to launch new satellite by end of 2004

Tony Hotland, The Jakarta Post/Jakarta

PT Telekomunikasi Indonesia (Telkom) plans to launch a new
satellite with broader coverage in December to capitalize on the
increasing use of satellites in Asia.

The new satellite, to be known as Telkom-2, will replace
Telkom's Palapa B4 satellite. It has a total of 24 transponders
and a useful life of 15 years.

"The total investment is around US$170 million, and has been
taken from our internal reserves. Unlike the Palapa B4 satellite,
whose footprint only covers the Southeast Asia region, the
Telkom-2 footprint goes all the way to India and China," Telkom
president Kristiono said on Thursday in Cibinong, West Java,
after a ceremony to mark the anniversary of the launching of
Telkom's first satellite, Palapa A1, 28 years ago.

Telkom-2 will be launched into orbit by European commercial
launch service provider Arianespace from Guyana, South America,
and will be in full operation by February 2005.

Besides running Palapa B4 with 24 transponders, Telkom also
operates Telkom-1, which was launched in 1999 and has 36
transponders and a useful life of 15 years.

Forty-six transponders on both satellites are occupied by
Telkom, while the rest are leased to 12 operators of very small
aperture terminals (VSAT), nine national television stations,
three local television stations, and foreign leaseholders such as
Reuters and NHK.

"Eventually, we'll occupy less transponders as for long
distance services, Telkom will gradually switch to undersea cable
and fiber optic infrastructure. So, more transponders will be
available for lease by foreign customers," said Kristiono.

Currently, Telkom leases out one transponder for around $1.1
million per year. However, Kristiono said that it would be
difficult to maintain this price due to increasing competition
among satellite service operators in the region.

Kristiono added that Telkom would still use Jasindo as the
insurance provider for the new satellite, although Jasindo would
likely have to form a consortium to insure an asset of such
value.

At present, Telkom is the second biggest satellite provider
after AsiaSat in the Southeast Asia region, with a market share
of 17 percent in 2003.

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