A Russian Proton-M rocket that was launched just before midnight on Monday failed to reach sufficient orbit after the second stage booster shut off prematurely. On board were communications satellites, a Russian Express MD-2 and Indonesia's Telkom-3 satellite.
Both satellites are now stuck in low orbit where neither can be used or retrieved. "The satellites can be considered lost," Roscosmos spokeswoman Anna Vedishcheva said on Rossiya television.
The Proton-M rocket was launched from the Russian-leased Baikonur cosmodrome in Kazakhstan, which is operated by Russia's Roscosmos Space Agency.
Russia has suffered a series of setbacks in its space program just has NASA successfully landed its newest Mars rover "Curiosity".
A Russian robotic probe designed to study a moon of Mars got stranded in Earth orbit after its launch in November and eventually came crashing down in January.
A few months before, a Soyuz booster rocket similar to those ferrying crews and cargo to the International Space Station failed, prompting officials to consider leaving the space outpost unmanned. Russian space officials eventually tracked down the reason, saying it was caused by "accidental" manufacturing flaws and the Soyuz launches resumed.
Those mishaps followed other failures. Russia lost three navigation satellites in December 2010, then a military satellite in February 2011 and a telecommunications satellite in August of that year.
Russia officials have blamed a lack of funding and modernization in what was once a premier soviet asset.
Launch of a Russian Proton-M rocket from the Baikonur cosmodrome in Kazakhstan.