How a Chinese Rocket Failure Boosted Elon Musk's SpaceX in Indonesia

STARBASE MEETING

In May 2022, Jokowi, as the powerful Indonesian president is popularly known, visited a SpaceX facility in Boca Chica, Texas.

"Welcome to Starbase," Musk said, smiling and shaking hands with the president, who was seeking Tesla investment in Indonesia's nickel sector.

Widodo's two-hour visit included 30 minutes of talks with Musk at an office packed with miniature rockets and then a tour of the production area, according to an Indonesian official with direct knowledge.

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The president has long sought to build an EV industry in Indonesia, which has the world's biggest reserves of nickel, a key element in electric batteries. The term-limited leader leaves office in October, but experts say Widodo will remain a major power broker after the candidate he tacitly supported to be his successor claimed victory in the Feb. 14 presidential election.

Widodo told Reuters last year that to woo Musk, he has also offered tax breaks, a concession to mine nickel, and a subsidy scheme on EV purchases. But a Tesla EV or battery factory in Indonesia, which Widodo has publicly requested, has not materialized.

Instead, days after the trip, according to a source with direct knowledge, Indonesian officials began discussing another of Musk's businesses: Starlink.

During the Texas meeting, Musk asked Widodo to let Starlink into Indonesia, the source said.

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Telkomsat, a subsidiary of state-owned telecoms firm Telkom, was supportive, its former chief executive Endi Fitri Herlianto told Reuters.

For months, the telco had sought regulatory approval so that Telkomsat could use Starlink services for cellular backhaul, or connecting mobile base stations to its network, Herlianto said.

Officials were concerned about the potential impact on domestic telcos if a permit was granted. The plan made no headway - until the Boca Chica visit.

"GAME CHANGER"

Less than a month after the Texas meeting, Telkom announced its subsidiary had received Starlink landing rights.

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Indonesia's communication ministry told Reuters that Starlink is only permitted to operate a backhaul service with Telkomsat and that it does not have the right to retail consumer internet services.

Musk "put that ask on the table then and there, so things started," said the source with knowledge of Indonesian discussions, referring to the May meeting.

Widodo's spokesperson, Dwipayana, confirmed that Musk and the president discussed opportunities in Indonesia, adding that officials are still in communication with the billionaire about future investments in his businesses, including Tesla.

Telkom did not respond to requests for comment.

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Last June, SpaceX's Falcon 9 rocket pushed into orbit the 4.5-tonne Satellite of the Republic of Indonesia (SATRIA-1) - Southeast Asia's largest satellite.

Nia Satwika, a SATRIA-1 project manager, said SpaceX offered lower costs and had higher availability of launch slots when compared with other operators.

"They are a game changer," she said, referring to SpaceX's ability to reuse parts of its rockets - a crucial cost advantage over rivals.