The expansion of Communications Satellite capabilities has been remarkable during the past 50 years. Systems are deployed all over the world bringing telephony and television to the remotest parts of the earth. During the early 70s S&CG was expanding its Commercial, Defense and NASA businesses. Most of our space business was for systems with well defined customer specifications and for delivery to customers directly or in-orbit. Several systems incorporated continuing efforts after launch. With the near completion of the Canadian Comsat ANIK and a closely approaching launch, there were several opportunities to compete for Domestic Satellite business unfolding around the world. The introduction of the HS-333 Communications Satellite was the basis of Hughes’ future product line of Delta Class Comsat’s during the early 70’s. The recollections described below are highlights from the early years of the development of one of the more unique Programs at Hughes S&CG, the Indonesian National Communications System….later known as Palapa.
Indonesia is an archipelago comprising thousands of islands. With an estimated total population of over 117 million people in 1971, Indonesia was one of the world’s most-populous countries. Historically, each Island had its own culture and language. Communication between parts of the Country was limited and growing slowly. A major Government priority was to bind the Country together with a common language, and a modern communication system. This was a perfect application for a satellite system, and Hughes was well positioned to meet these goals.
• The Initial Stage
In late 1970, Indonesia’s Director of Post and Telecommunications General Soehardjono met with S&CG’s Dr. Wheelon while attending an International Telecommunications Union conference, to discuss the potential of space communications applications to meet Indonesia’s vast communications needs. This meeting resulted in further discussions to take place at Hughes in early 1971. That initial exchange put in motion a 5-year long process to greatly expand and enhance Indonesia’s telecommunications services to meet their evolving needs. Indonesia’s unique requirements for communication services between the 26 major Provincial Capitals spread over a large archipelago of thousands of islands were formidable. By 1970, land-based communication services were provided by high frequency systems and a microwave network existed on the islands of Java and Sumatra. Tropo-scatter communications was used between several of the islands. Expansion of the microwave system was the primary consideration for meeting the nations future needs and a plan was reflected in the Ministry of Communications 5 year plan. While the General’s vision included the possibility of incorporating a Satellite network he asked that Hughes consider educating the telephone corporation, Perumtel’s engineers and business personnel about the technical and business aspects of incorporating a Satellite Communication System. The definitive plan was prepared during the 1974 pre-contract phase and is shown in Figure 1 illustrating the proposed telecommunications interconnections within Indonesia.
Our first step was to further educate ourselves about Indonesia, the existing and future telecommunications needs and to generate a viable satellite based telecommunications system that would incorporate the existing infrastructure as well as expand capabilities through out the country.
The project was one of several under the direction of Dick Brandes, Manager of the Commercial Divisions Advanced Programs. Dick had a group of engineers tracking Iran, Brazil, Indonesia and Australia among many other foreign campaigns. Lloyd Ludwig was the first to start gathering pertinent facts about Indonesia and had developed an initial database of information. Within the USA the Commercial Divison was also focusing on both Western Union and ATT as future customers for our Domestic Comsats. In preparation for a visit by General Soeharjono in early spring 1971, Will Turk, was asked to gather the necessary information and create an initial briefing that would focus our capabilities against the backdrop of Indonesia telecommunications needs. Several engineers joined the effort…John Stivers and Lee Gould conducting systems development, Frank Joyce and Dr. Mike Horstein providing communications analysis based on the HS-333 satellite performance and Bob Hester gathering the background ground system information with the engineers in Lou Greenbaum’s Commercial Division Ground System organization. Phill Vanderveen from the Hughes Brussels Office had lived in Indonesia and gave us valuable insight about the country. The Turnkey Integrated Space and Ground Segment project HS-3471 was born.
The HS-333 communications satellite, as being developed for Telesat Canada, offered 12 channels for telephony or TV services that could be allocated in many different ways. Large bandwidths could be used for Trunk telephony services or small allocations could be used for demand assignment telephony. The large requirement for TV bandwidth would require multiple channel usage for commercial and educational purposes. Our architecture would enable low cost services and the potential to provide educational TV to the vast and disconnected parts of the nation. The Indonesian Satellite Program entailed more than just building and launching a satellite.
An evolving theme of low cost telecommunications based on a low risk and well defined space segment was central to our theme. But the architecture and integration into the existing network had to be better understood and the promise of offering future educational television through out the country fulfilled.
Doing business within the USA with the either government or private companies was well understood. Creating a National system without current knowledge of how to operate in this new environment, learning about the existing infrastructure and how to conduct our business in this particular environment were all challenges particularly since we had no local contacts or capabilities. The first briefing relied on a typical Hughes focused effort, but the steps to gather the information we needed to further define the system had to be developed from scratch.
Our first presentation to General Soeharjono and his Deputy of Operations Suttangar Tengker took place at S&CG in early 1971 and basically demonstrated how the Anik HS- 333 satellite through modest changes to the antenna feed arrangement could be configured to provide coverage over Indonesia . The tailored antenna beam from a single satellite above the equator and the Indonesian archipelago would provide the Nation instant 100% coverage and provide trunk/demand assignment telephony and national television service as well as educational TV using available satellite technology that was about to go operational in Canada. By locating the proposed Ground Stations at each of 26 Provincial Capitals instant telephone and TV service could be enabled. The costs and schedules associated with such a system were also presented. A tour of the satellite high bay followed the presentation, Figure 2.
The interactions and response to our initial presentations opened a dialogue that set the stage for a much better understanding of the PTT’’s aspirations and thoughtfulness in the pursuit of Indonesia’s Telecommunications expansion plans. The visit resulted in a request that we present our approach to his team at the PTT/ Perumtel headquarters located in Jakarta and Bandung at the earliest opportunity.
• Preparation for our First Trip
In preparation for our upcoming visit several planning meetings were held. Dr Harold Rosen, Ev Durfee, Dick Brandes, Ralph Mitchell the Divisions Marketing head, C. R. Jones (Dick), Group Marketing and the Group Management all weighed in on the concept and the possibilities of this endeavor. Dr. Wheelon decided that Dick Jones should be personally involved, further indicating Dr. Wheelon’s interest in the prospects for this venture. He also planned on joining Dick Jones and I on our first trip to Jakarta. His plan was to have a follow-up visit with General Soeharjono and then to introduce the U. S. Ambassador to Indonesia to our plans offering Indonesia a new and less costly means of achieving s telecommunications goals.
What was so special about this specific project? It represented the evolution of Hughes as a Satellite provider into the possibility of developing a complete Turnkey Communications Satellite System. Oddly enough, the traditional satellite design and development was fundamentally completed. By tailoring and testing the antenna feed arrangement we could offer a satellite to meet the customer’s coverage needs with little additional risks and a well understood satellite cost. Our major focus was on:
1) Fully understanding Perumtel’s telephone/TV system and planning
2) Meeting the Perumtel Staff and prepare to present them with options to achieve their perceived needs.
3) Identify the key leaders within the Government that would have to approve this class of changes to their infrastructure.
4) Initiate exchanges with the U.S. State Department, with the Indonesian Ambassador and the Indonesian Embassy in Washington D.C.
5) Understand the financing of this class of endeavor through the use of commercial banks, the Export/Import Bank and World Bank and understand the legal aspects of doing business in Indonesia.
6) Contract for the Ground Terminal development and deployment, develop Mission Operations, procure Thor-Delta launches, develop and test the Palapa HS-333 and provide launch integration and transfer orbit services.
• Significant Highlights of the Venture
A) Prior to Our First Visit
Understanding the recent history of Indonesia and the significant changes that had taken place since the mid 1960’s was our starting point. President Suharto had a strong vision for his Nation and planning was well underway to expedite the countries growth within the Ministries of Energy and Communications.
An immediate objective was to get further insight into the countries current plans, its leadership and possible consultants to help us in this undertaking. It was almost serendipity that a great deal of the desired information was to be found in California and around the corner from Hughes. The Library at UCLA offered a wealth of information that served us well as this endeavor unfolded.
Locating the Area Handbook for Indonesia (a Ford Foundation Document) in the stacks at the UCLA Library was an excellent starting point for understanding current issues and plans to improve one of the most populated area in the world. The countries population in 1971 was estimated as 117 Million and the island of Java is still one of the most populated places on earth. An even greater insight was obtained through the discovery of Indonesia’s 5-year development plan, the ‘Repelita,’ showing the potential changes being projected for telecommunications services. In addition, the planning described each of the Ministerial Departments and identified the Ministers in charge under President Suharto (several of the then current ministers received their advanced education and earned Ph.D. Degrees from the Economics Department at the University of California at Berkeley under the guidance of Professor Davisson. Several of the academics at the University also supported the Ford Foundation on a regular basis.
About the same time Bob Bowman who had worked for Dick Brandes on the Brazil Domestic Satellite Project became available to lead the Business/Finance aspects of the Indonesian Satellite program development. Bob initially oversaw developing a complete business plan in preparation for our first visit to U. C. Berkeley with the Professor referred to in the above. We traveled to Berkeley with a preview of our proposed briefing for PTT/Perumtel and had a valuable exchange with the Professor. We discussed our ideas and in exchange developed an independent view of the value of such an advanced capability for the country. We came away with an even stronger vision for such project in Indonesia and agreed to keep him up to date on our progress.
B) Planning for and Conducting Our First Visit.
The key elements of that first presentation in Bandung included:
- (1) Hughes Background, and History of Syncom/ATS/Intelsat and related accomplishments,
- (2) Development and launch status of the Anik HS 333Communication Satellite applications to achieve Indonesias perceived needs, a possible system deployment of satellites and ground stations, and Programs Cost Estimates.
- (3) The bottom line that the total operational costs led to the price of a phone call of approximately $1/minute which was extremely competitive with terrestrial communications being considered at that time.
The first full up briefings at Perumtel in Bandung, Indonesia took place in May 1971. Dick Jones and I arrived in Jakarta where the PTT government offices were located and Dr. Wheelon arrived several days later for separate meetings with the General and the U. S. Ambassador Galbraith.
Because of the difficulty of getting information about the Perumtel facilities in Bandung and to not put any imposition on them, we decided to implement a plan to make sure that we brought with us the appropriate tools of the trade. We had the presentation put on 35 mm slides and needed a 240v projector and lots of wire cord to be sure we could plug in the projector. Since at that time the trip to Djakarta had many stops we decided to take advantage of the opportunity. The flight took us from Los Angeles to Hawaii and then to Tokyo prior to our overnight stop in Hong Kong. The next day we continued with stops in Bangkok and Singapore before arriving in Jakarta. We purchased the necessary equipment in Hong Kong and were on our way.
Arriving at the Hotel Indonesia in 1971 was special. As we drove up to the Hotel from the Airport, we exited the cab to hear the Gamelan percussion instruments playing beautiful traditional Indonesian music at the open air entry to the Hotel lobby, a very memorable first impression.
On the following day we visited the PTT in Jakarta to discuss our briefing and were given the go ahead to meet with Perumtel in Bandung. The open-air train ride in the morning took us from the northern end of Java south to Bandung through beautiful countryside. After arriving in Bandung we were met and brought to a Dutch Colonial style office building housing the Permutel employees. We were taken to a large room with windows extending to the high ceiling and chairs set up for the briefing. Dick and I set up a projector table and fortunately had sufficient cord to connect to a wall outlet. Since we did not bring a screen we simply found a large blank wall, moved the chairs around and proceeded with the briefing. There were about 2 dozen attendees present as we started our introduction about satellite communications and its application to Indonesia. Following many questions we had lunch with several of the Perumtel executives and afterwards took the train back to Jakarta. The audience was extremely interested and were eager to hear more about the system as it progressed.
Dr. Wheelon arrived the following day and after the meeting with the General and his staff we attended the meeting at the U.S. Embassy in Djakarta. That evening the PTT hosted a dinner at the Oasis…a beautiful outdoor enclosed restaurant surrounded by high walls, tall palm trees and warm tropical winds. The exchanges that would lead to ultimate introduction of satellite communications had formally begun.
C) Evolving the Concept -1972 through 1973
For the next several years the system design matured and we briefed the Perumtel staff many times. Willi Moenendir, the President, and Suttangar Tengker in charge of the Project at the PTT assigned their staffs of executives and engineers to reviiew the potential value of the concept and prepared to make the National Communications Satellite System a reality.
On our second visit, one of the first items of business for us was understanding the existing communications infrastructure including the planned detailed expansion of the microwave system. Perumtel provided us the necessary information about the existing networks and planned upgrades and several members of our team including Rick Masoni became very familiar with the technical aspects of the ground communications system during one of our several visits to Bandung. Back at home we increased the Staff with Bert Reich and Marty Gale and further refined the system design. Bruce Ellbert and Bob Mullen were among those who continued the communications analysis and ground system design of the tailored HS-333D communications system for Indonesia. . John Fraser formerly of ATT joined the team to aid in the validation of our interfaces with the existing PTT telecommunications network. The participation within the Ground Segment was focused with Al Koury, Joe Moore, Joe Angellletti, Vern Trail and their team who were responsible for the Ground Segment System design and eventually the development of many of the stations.
D) 1974; The Study Contract and Final Proposal
Dr. Wheelon had appointed General Jack Ledford as Hughes S&CG Marketing Manager for the Program in 1973. As a side note what many didn’t know at the time was that General Ledford was key to the development of the SR-71 spy plane (one is located in Los Angeles at the Exposition Park’s California Science Center). Jack spent much of his time in Indonesia as well as Southeast Asia and was the primary local marketing interface until the formal start of the Palapa Program. We also increased the size of our staff and brought on several individuals that had expertise in dealing with international contracts. Elmer Zerkel as a part of the Hughes Corporate office joined our team in charge of Contracts.
A significant part of our effort was placed in establishing the economic benefits of a satellite system. Bob Bowman’s leadership in this area was essential to producing a viable business plan that could respond to questions regarding the cost effectiveness of the Program. In March 1974 we presented this detailed plan2 to the PTT and gained expanded support for further definitizing the complete system, which we did.
As the Study Phase moved on in parallel with the developing the program funding; the PTT presented us with several alternative Ground Segment scenarios. They recommended adding other contractors and subcontractors. At the same time companies associated with the terrestrial microwave continued to put pressure on the PTT to continue with their expansion in lieu of a Satellite System. In addition several aerospace companies were attempting to wrestle away our sole source satellite position….ultimately they failed. The PTT did decide to split the Ground Segment into multiple suppliers as ITT, GTE , Philco Ford and Siemens prepared themselves to win business with Indonesia. Hughes was made responsible the Master Control Station, 6 of the 19 other Ground Stations and development and installation in all 26 ground stations of an innovative Single Channel pr Carrier (SCPC) system under the direction of John Woldridge. Traveling around Indonesia during the Ground Station site selection period in 1974 was quite an experience for the team. They traveled through the beautiful islands of Java, Sumatra, Kalimantan, Sulewesi and Bali. During the study phase we visited the island of Bali. The island is truly exceptional and the local Perumtel representative was generous in taking us around. During a visit to Jogjakarta, Don Shergalis and I had the special opportunity to explore the historical Borobudur Buddhist temple located in the middle of Java. This was an example of one of the many special things that we all were able to partake in during our time in Indonesia.
Providing the financing and structuring of the Ground Segment team continued to be a major matter during the summer of 1974 through the fall. During that period General Soeharjono recommended that we initiate discussions with several of the switching equipment suppliers as well as Ground Terminal suppliers. Siemens of Germany, Erikson of Sweden and Phillips of Holland all offer telephony switching exchange equipment as did others. Ev Durfee, Dick Brandes, John Fraser, Jim Dunlap and I visited Munich to discuss alternative business relationships and technical interfaces with Siemens in support of the PTT . The exchange was useful and the information aided in the PTT’s process of narrowing the many options they had before them. As the end of the year approached the PTT made their choices.
In the Fall of 1974,with the Introduction of Repelita II3 Hughes was awarded an $800,000 initial contract on a $90 million satellite communications system from the government of Indonesia. This phase of the program was a collaborative effort with the PTT to create the definitive documents to undertake the development of the totally integrated system. With the final phase fast approaching the PTT formalized the Program as part of the nation’s five year plan. The document entitled “Domestic Satellite Communication System” was published and the cover page is shown in Figure 4. The antenna coverage pattern over Indonesia is shown with the satellite placed at 80o east longitude. The Space Segment elements and Ground Segment stations are also depicted in Figure 5.
Prior to finalizing the Cost Proposal in late December 1974 we had what could be called a natural disaster. In mid-1974 the massive increase in inflation in the USA and the world due to the global “Oil Crisis” saw the rise in interest rates from 9% to 16%. On an individual basis most of us would simply ride out the wave of inflation knowing we couldn’t do anything about it. It took a number of months for the effect of the Oil Cartels influence to show up on our bottom line. We didn’t recognize the impact that our Ground Segment subcontractors were taking and passing along to us until we were auditing the final costs which had changed dramatically. The cost of the satellite didn’t change…..but the projections for the Ground System doubled putting our offer in danger since the financing of the Satellite System had been more or less finalized. The impact of the changes were evaluated and weeks before the final signing we had to brief several of the providers of funds and the PTT on a proposed action. Paul Visher, Bob Bowman and I gave several briefings to the General Soehardjono and his staff. After presenting the background on the price changes and regaining the confidence of the Bankers and the PTT the process moved forward and the final contract was signed.
Several memorable meetings took place in Jakarta, Bill Pomeranz was part of the team that put together the detailed business plan during the 1974/75 System Study & Contract Proposal and subsequent negotiations. That was a crazy time putting the Final Proposal and Contract together at the Bourbadour Hotel without the typical publications team that we all were accustomed to. Paul Visher was still having discussions with potential contractors/subcontractors outside the Proposal facility while deadline was fast approaching. Bob Bowman and I had to deliver a tax payment as part of the Indonesia’s contract process in order to complete our formal Proposal transaction.
The Contract for 2 satellites and 40 Ground Terminals was signed in early 1975 with a launch date set in July 1976 to commemorate an important National Holiday in August 1976 . With the signing of the contract we immediately moved out on the final construction phase….the building of the satellite system named Palapa by President Suharto and the final survey and procurement of the multiple ground terminals provided by Hughes and other suppliers. A local presence was established with Fred Judge as the on-site manager and Bob Mullen as a deputy.
E) Post 1976 – Success
The Program Office led by Lloyd Harrison former Program Manager for ANIK and Bill Grayer successfully achieved the General’s vision. Less than 18 months after signing the contract we had a successful launch of the first satellite and the Palapa System was formally inaugurated. Palapa A1 was launched July 8, 1976 and retired in May 1985. The second satellite, Palapa A2, was launched on March 10, 1977 and retired in January 1988. Both exceeded the required design life of seven years.
There were several additional events and incidents that stood out during evolution of the Program. I have highlighted several to give a glimpse into the variety of things that we dealt with:
- As our presence in Jakarta became known in 1972, several local telecommunications consultants offered us guidance. One point made often by several from Australia was the concern that Hughes would be overselling the potential of Satellite Communications to a lesser developed country. It appeared that Australia, a close by neighbor of Indonesia was looking out for their neighbor. However, we were already mindful of issues in dealing within Indonesia as a result of our interface with many different contacts including those at the Ford Foundation. Our approach was to let the proposal speak for itself…..we found the PTT / Perumtel engineers and managers sufficiently talented to evaluate the approach and had several years to confirm the merits to the PTT management.
- Early in our activities General Soehardjono indicated that offering regional services could be a benefit to Indonesia and it neighbors. During the study, several countries and regional groups became interested in Indonesia’s activities. There were discussions about support to the regional Association of South East Asian Nations( ASEAN) as well as individual Countries. Typically Customers create a system architecture to which Satellite electronics and Ground Systems are tailored for. In this case the existence of the HS-333 provided the potential of excess capabilities that the PTT could consider leasing to other Nations depending upon how their final business plan developed. The PTT took on the task of developing planning with members of the ASEAN and did sell satellite capabilities to several of their neighboring countries. A major effort was required to stave off the opposition of the INTELSAT, which at that time had a monopoly on these services.
- As the system design matured we initiated studies to investigate the expansion of the numbers and types of potential commercial system users. Our cost benefit analysis showed that addition of users outside of the PTT could be of value in further driving down costs for the planned and potential future businesses. In 1973 we hired a Consultant to help us investigate the viability of other possible Telecommunications users in Indonesia. We envisioned potential business opportunities with emphasis on the Energy/Oil sector and thought that the increase in potential system utilization could benefit the PTT….. recognizing that there were many oil platforms in the waters surrounding the country led us to focus some effort on direct two-way communication to the platforms. We were independently contacted by a private Indonesian company that had close ties to the Indonesian Energy Ministry. We completed our early investigations and followed the PTT’s guidance to include their needs in the evolving telecommunications system requirements.
- The oddest incident was through a contact with our Singapore Office. An individual in Kuala Lumpar, Malaysia wanted to have a discussion with a Hughes representative. We already had planned to broaden our understanding of the ASEAN countries potential needs so that a trip to Malaysia made sense. A meeting was set up with the U.S. Embassy to gain some insight into Malaysia’s Telecommunications requirements. As a result, Don Shergalis, Jack Ledford and I had a planned meeting in the fall of 1973. We flew in for the meeting to find on going riots taking place as a reaction to the ongoing war in the Middle East. The American Embassy decided to cancel our meetings and recommended that we leave the following day. We had just enough time to meet with the private individual, who turned out to be an armaments dealer that wanted Hughes to provide him with TOW Missiles thinking we represented “Howard Hughes’” directly. We left the country the following morning during a monsoon downpour and flew off to an International Telecommunications Union meeting in Torremolinos, Spain and to meet several of our Indonesian PTT customers.
- In the period of the early seventies there was a lot of concern raised about U.S. companies doing business overseas and making payoff’s to gain business. The headlines about Aerospace companies in Japan were prevalent at the time. Over the 5 years of developing the Program I could say that doing business in Indonesia appeared to be much like doing business in other Programs that Hughes had been associated with. While there was never any directions how to handle yourself in various situations my experience was pretty straight forward. The customer had a requirement, we met his needs on a technical and cost basis and we moved on to win the support of the PTT / Perumtel. A short time after the Program was initiated the U.S. Government started investigation into Aerospace companies doing business overseas and being accused of making payoffs. As a result Jim Dunlap, Head of the Legal Department informed me that the Government had requested all notes and documents that supported the Hughes win in Indonesia. I had a number of documents dealing with technical and business matters that Jim had asked for. After a period of almost 1 year Jim called me to say that they found no issues with company practices and returned all of the documents with pages filled with yellow highlighter and many paper clips..
6. While this Program was complex and required special attention over a long period, one thing we all tried to remember was to experience what the country offered outside of our focused business effort. During one of our early trips Dick Jones and I got a chance to try the Becak (3 wheeled covered bicycle rickshaw) transportation system in lieu of a taxi to go to dinner one evening. That was quite an encounter cycling through the side streets of Jakarta on a dark evening. Dinner at a fine restaurant in Jakarta made the ride even better. During one of Dick Brandes visits to Jakarta to evaluate our progress on the development of the specifications we had the opportunity to visit the Jai-Lai Center outside of Jakarta to watch several sporting matches…. we took a cab.
Looking back, I believe that all of the Hughes team who got a chance to participate in this Program on site, got the most wonderful opportunity to see Indonesia and its people in a very special way.
References and Notes:
- The HS-347 nomenclature was assigned to the Indonesian project for purposes of documenting our internal efforts. All memos and trip reports were collected under this name. The basic spacecraft design was based on the HS-333, but without detailed understanding of the Indonesian telecommunications needs we were unsure of the complexity of the antenna modifications necessary to meet the broad coverage needs. The first presentations cited the HS-347 as the satellite designation. With the completion of the preliminary design effort it was clear that the HS-333 would meet the requirements and the HS-333 bus was incorporated within the baseline system.
- Economic Benefits of an Indonesian National Communications Satellite System March 1974 Hughes SCG 40078R.
- Repellita II, Proposal for Telecommuncations Development in ther Second Five Year Plan Volume 1. The Development Plan; Volume 2 Supplementary Data ! March 1973 Prepared by Perumtel, Bandung.
This comment is by Steve Dorfman
Will, congratulations on capturing an important milestone in the history of SCG. Palapa was a pioneering effort with an all star team, many who continued on to play important roles in subsequent communication satellite programs. Palapa continued on as a successful program over three decades with several generations of spacecraft , HS 333 , HS376 and HS 601.
I was working on going to Venus in the time period you describe but when I became involved with the commercial satellite programs I learned of the respect SCG had earned in Indonesia and that was key to our continued success in Indonesia. Many Hughes people learned a lot about this fascinating country and many Indonesians learned about satellites in the US. There were a few marriages also.
Thanks for taking the time to write this fascinating personal story of the beginning and of your efforts and the efforts of many others.