Russia failed to launch two multimillion-dollar satellites that were to have provided Indonesia and Russia with telecom services, casting new doubt on a once-pioneering space industry.

Russia's space agency said the failure of the upper stage of the launch atop its workhorse Proton rocket led to the loss of Indonesia's Telkom-3 and Russia's Express MD2 satellites.

The error happened after takeoff from the Russian-leased Baikonur launch pad in Kazakhstan late on Monday.

The total loss of the two satellites was estimated at US$100-$150 million, a space industry source told Interfax news agency.

Moscow, which carries out 40 percent of global space launches, is struggling to restore confidence in its industry after a string of mishaps last year, including the failure of a mission to return samples from the Martian moon Phobos and the loss of a $265-million communications satellite.

Space agency Roskosmos said in a statement the Briz-M booster had fired its engines on schedule but they had burned for only seven of the programmed 18 minutes and five seconds needed to push the satellites into orbit.

"The chances that the satellites will separate from the booster and reach the designated orbit are practically non-existent," an industry source told the state news agency RIA.

Proton rocket launches will likely be suspended pending analysis of the failure, the Russian industry source said.

"The last failures to a certain extent undermine Russia's position as a country that provides space launch services," said industry expert Yuri Karash, a member of the Russian Academy of Cosmonautics.

Such mistakes strengthen Russia's competitors, such as Europe's Arian rockets, Karash said, describing Russia's space industry, struggling to recover after a generation of brain drain and crimped budgets, as "not in the best condition by a long shot".

He added, however, that problems with the Briz-M upper stage did not necessarily throw into doubt the reliability of the Proton booster as a whole.

Telkom-3, the first satellite Jakarta had purchased from Moscow, was built by Russia's ISS-Reshetnev with communication equipment made by French-led satellite maker Thales Alenia Space. It had a capacity of 42 active transponders to cater to the growing demand of Indonesia's satellite business service.

Express MD2 was a small communication satellite, made by the Khrunichev State Research and Production Space Centre, for the Russian Satellite Communications Company (RSCC).

- Reuters