MOSCOW (Reuters) - 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 $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 5 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. Continued...