How Elon Musk’s SpaceX was boosted in Indonesia by a Chinese rocket failure

Indonesia’s $220 million Nusantara-2 satellite was destroyed after a Chinese rocket malfunctioned shortly after launch in April 2020, severely harming the archipelago’s attempts to fortify its communication networks. However, it gave one individual an opportunity.

The owner of SpaceX, the most successful rocket launcher in the world, Elon Musk, capitalized on Jakarta’s inability to choose his preferred business for launching satellites into space over state-owned China Great Wall Industry Corp (CGWIC).

The Chinese contractor had used cheap funding, Beijing’s geopolitical clout, and assurances of widespread backing for its space ambitions to pursue Indonesia, the largest economy in Southeast Asia and a major space growth market.

According to two industry insiders in Jakarta who are aware with the situation and a senior government official, the malfunction signaled a shift in Indonesia’s policy away from Chinese space contractors and toward businesses owned by Elon Musk.

Nusantara-2 was the second satellite launch that CGWIC was given by Indonesia, matching the two that SpaceX had launched at the time. China has handled none of SpaceX’s launches since its debacle; the company has launched two Indonesian satellites and is scheduled to launch a third on Tuesday.

According to Reuters, SpaceX defeated Beijing thanks to a mix of less expensive reusable rockets, dependable launches, and Musk’s close friendship with Indonesian President Joko Widodo. In 2022, after the two men met in Texas, SpaceX also succeeded in getting regulatory permission for their Starlink satellite internet service.

The SpaceX agreements represent a unique opportunity for a Western business to gain traction in Indonesia, where Chinese firms predominate in the telecom industry due to their low prices and simple financing. The achievements followed after Indonesia, citing its reliance on Beijing’s technology, defied US demands to sever ties with Chinese telecommunications firm Huawei.

Twelve individuals, including US and Indonesian officials, businesspeople, and analysts, detailed the specifics of this change to Reuters; these details had not before been made public. Since they were not authorized to speak with the media, a few of them only spoke under the condition of anonymity.

According to Sri Sanggrama Aradea, chairman of BAKTI, an Indonesian communications ministry agency, “SpaceX has never failed in launching our satellites.”

He said it is “hard” for Jakarta to use CGWIC again because of the incident in April 2020.

For this story, SpaceX, CGWIC, and Pasifik Satelit Nusantara, a significant investor in the Nusantara-2 project, did not answer to inquiries.

In response to inquiries from Reuters, China’s Foreign Ministry stated that “Chinese aerospace enterprises are continuing their space cooperation with Indonesia in various forms.” It didn’t go into detail.

When granting contracts, the government gives preference to capable and efficient technology that serves the needs of Indonesians, according to Ari Dwipayana, a spokesman for the presidential office.

The competition between SpaceX and China provides a glimpse into a broader struggle to control a quickly growing space sector.

According to US consulting firm BryceTech, the entire space industry, including launches, manufacturing, and services, was estimated to be valued $281 billion in 2022, or 73% of the total market.