The Sky Muster II satellite was carried aloft on board an Ariane 5 rocket decorated with the photos of 700 Australians, winners of NBN's "blast your face into space" contest.

The launch vehicle took off from the European Spaceport in Kourou, French Guiana in South America at 7.30am AEDT. The event was observed by NBN executives and board members in both Kourou and at the offices of the satellite's manufacturer, Space Systems Loral (SSL), in Palo Alto near San Francisco.

The Australian payload was released 28 minutes into the flight, before a tense 7 minute wait for mission control to obtain what is called the initial acquisition of signal. Only then did the champagne corks pop.

The new satellite joins another one the company launched last year. When Sky Muster II comes on stream in about six months it will allow NBN to expand its capacity to provide high speed internet to what will eventually be more than 400,000 Australian homes and businesses in remote parts of the country.

NBN chief executive Bill Morrow, who watched the launch at SSL mission control in Palo Alto, said the extra capacity would accommodate the insatiable demand that Australians are demonstrating for high speed broadband.

"By their nature, Australians are early adopters," Mr Morrow said. "[And in the bush] there is a pent-up demand. Now that we're giving it to them, they're just embracing it."

John Celli, the president of SSL, was also on hand at the Palo Alto launch event, where he observed his only launch day superstition: he did not wear a tie. Nor did any of his guests or employees present.

Mr Celli, a 30-year veteran of the satellite business, last wore a tie on launch day on February 15, 1996 when he was executive director of SSL's Intelsat program. He watched on in horror as the Chinese-made Long March rocket carrying his company's payload veered off course shortly after launch, ploughing into a nearby village and resulting in a large number of fatalities.

"You've got to violate the laws of physics and gravity when you launch a rocket," he said, explaining why every launch day is a nervous affair even after thirty years of watching rockets blast off.

The NBN satellite broadband service will provide average download speeds of up to 25Mbps, and 5Mbps upload, to its customers, many of whom are still on dial-up internet services.

The rollout schedule aims to connect 85,000 premises by the end of June next year, and a further 50,000 by June 2018. Currently about 30,000 premises are using the service.

The successful launch comes just one month after a satellite-carrying rocket operated by Elon Musk's SpaceX exploded on a launch pad in Florida during a fuelling operation. The destroyed Amos-6 satellite was part of a joint venture between Facebook and Eutelsat that was to provide internet services to sub-Saharan Africa.