Telkom-1 fails, affecting thousands of ATMs throughout Indonesia

Press conference. Image courtesy of PT Telkom.

On 25 August 2017, Indonesia’s largest telco PT Telkom experienced a service disruption due to the failure of its oldest operational satellite, Telkom-1. Although steps have been taken to remedy the situation, full coverage has yet to be established.

At 18 years, Telkom-1 exceeded its design life by 3 years, and lost coverage allegedly due to an antenna-pointing error leading to a transponder malfunction, although some commentators have suggested that Telkom-1 has fallen out of orbit. Both PT Telkom and Indonesia’s space agency LAPAN have denied such claims, reassuring the public that the satellite is in the correct position at 108.0°E.

To compensate, PT Telkom Indonesia is now migrating Telkom-1 users to its other satellites, Telkom-2 and Telkom-3S. This has partially restored connection for some of its users, but only an estimated 17% of full coverage was recovered as of 28 August 2017. Migration is expected to be completed by today, 30 August, although it will probably take up to 2 weeks for service to be back to normal.

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PT Telkom has apologised for the malfunction, and is currently investigating the situation with Telkom-1’s manufacturer Lockheed Martin and LAPAN. It has also set up a 24-hour crisis management center to speed up the recovery process.

The disruption has had tremendous repercussions for PT Telkom, whose Telkom-1 services 63 enterprises, and whose subsidiary Telkomsel services 122 million residents of Indonesia.

Because of the failure, internet and satellite phone connections have been disrupted. But among the most severely affected sectors is banking and finance, which saw the malfunctioning of thousands of Automated Teller Machines (ATMs) throughout the country, due to problems with VSAT terminals.

PT Telkom’s customers in the financial sector include Indonesia’s largest bank, Bank Mandiri, the country’s central bank Bank Indonesia, Southeast Asia’s biggest lender by value BCA, and others.

Besides being a massive PR disaster, with its social media being flooded with complaints, PT Telkom has seen its share prices plunge dramatically in the past few days. In the morning of 25 August, PT Telkom shares were valued at 4,800 IDR (Indonesian Rupiahs), plummeting to 4770 IDR by the end of the day. It has continued to drop, and is currently valued at 4,200 IDR.  PT Telkom has reassured shareholders by saying that its satellite business only accounts for 0.6% of the group’s earnings.

PT Telkom has further reassured customers, who are now skeptical of Telkom-1’s ability to continue functioning, that it plans to launch a replacement satellite. Said Telkom CEO Alex J. Sinaga, “We have already allocated Telkom-1’s slot to our new satellite, Telkom-4, which will be launched in mid-2018.”


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