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

JAKARTA — When a Chinese rocket malfunctioned shortly after launch in April 2020, destroying Indonesia's US$220 million (S$296 million) Nusantara-2 satellite, it was a blow to the archipelago's efforts to strengthen its communication networks. But it presented an opportunity for one man.

Elon Musk — the owner of SpaceX, the world's most successful rocket launcher — seized on the failure to prevail over state-owned China Great Wall Industry Corp (CGWIC) as Jakarta's company of choice for putting satellites into space.

The Chinese contractor had courted Indonesia — Southeast Asia's largest economy and a key space growth market — with cheap financing, promises of broad support for its space ambitions and the geopolitical heft of Beijing.

A senior government official and two industry officials in Jakarta familiar with the matter told Reuters the malfunction marked a turning point for Indonesia to move away from Chinese space contractors in favour of companies owned by Musk.

Nusantara-2 was the second satellite launch awarded by Indonesia to CGWIC, matching the two carried out by SpaceX at that time. Since its failure, SpaceX has launched two Indonesian satellites, with a third set for Tuesday (Feb 20); China has handled none.

SpaceX edged out Beijing through a combination of launch reliability, cheaper reusable rockets, and the personal relationship Musk nurtured with Indonesian President Joko Widodo, Reuters found. Following a meeting between the two men in Texas in 2022, SpaceX also won regulatory approval for its Starlink satellite internet service.

The SpaceX deals mark a rare instance of a Western company making inroads in Indonesia, whose telecommunications sector is dominated by Chinese companies that offer low costs