<DOCID> nyt960214.0509 </DOCID>
<STORYID cat=f pri=r> A4199 </STORYID>
<SLUG fv=tia-z> BC-SATELLITE-EXPLOSION-U </SLUG>
<DATE> 02-14 </DATE>
<NWORDS> 0914 </NWORDS>
INTELSAT SATELLITE ON CHINA ROCKET BLOWS UP AT LAUNCH (UPDATE3)
(For use by New York Times News Service clients)
By Liza McDonald and Todd Blecher
c.1996 Bloomberg Business News
(Editing changes in first three paragraphs.)
Xichang, China, Feb. 15 (Bloomberg) -- A Chinese rocket carrying
an Intelsat satellite exploded as it was being launched today,
delivering a blow to a group including Rupert Murdoch's News Corp.
and Tele-Communications Inc. that planned to use the spacecraft to
beam television signals to Latin America.
``We're in a risky business. These things happen from time to
time,'' said Irving Goldstein, director general and chief executive
of Intelsat. His comments came at the company's Washington
headquarters, where hundreds of reporters, diplomats and industry
officials gathered to watch the launch from China on large video
The China Great Wall Industry Corp. provided the Long March 3B
rocket for today's failed launch of a satellite built by Loral
Corp. of New York for Intelsat. It carried 40 transponders and
would have had a primary broadcast footprint that extended from
southern California through Central America and from Colombia to
northern Argentina in South America.
The spacecraft was to be one of three satellites to be used for
a new direct-to-home subscription-based television service in Latin
America scheduled to begin in May. PanAmSat Corp., a private,
Greenwich, Connecticut, company, is also a satellite provider for
the TV project.
``This failure will not affect News Corporation's launch plans
for the direct-to-home satellite service'' in Latin America, said
company spokesman Howard J. Rubenstein in a statement. ``News Corp.
has a number of other real options, and will disclose them
In addition to News Corp. and TCI, the venture includes Grupo
Televisa SA, Mexico's biggest broadcaster, and Organizacoes Globo,
Brazil's largest media company.
``I think it's pretty serious for Televisa,'' said Shayne
McGuire, an analyst at ING Barings in Mexico City. It will may
delay the timing of the direct-to-home project for about six month,
he said, but ``not the project itself.''
McGuire said Televisa expects a second Intelsat satellite to be
launched by Arianespace from French Guyana later this month to fill
in part of the void.
Goldstein said ``there will be no disruption of service'' for
Intelsat's existing customers, who were planning to use the
satellite to replace current satellite capacity.
Today's accident marked the eighth time out of 55 attempts that
an Intelsat satellite launch failed in the company's 31-year
history. Intelsat is a global supplier of international satellite
communication services. The organization is owned and run by 125
member countries that use its services.
Intelsat's Goldstein said the launch was fully insured for
$204.7 million by International Space Brokers Group.
International Technology Underwriters of Bethesda, Maryland, is
one insurer in this consortium. The company is 80 percent owned by
Paris insurer Axa SA and 20 percent by Prudential Reinsurance
Holdings Inc. of Newark, New Jersey.
Its chief executive, former space shuttle astronaut Rick Hauck,
wouldn't comment on the size of International Technology's loss.
The company insures about 20 to 30 satellites a year.
While an insurer can pocket up to $66 million on a successful
launch, a satellite failure can cost as much as $300 million. An
estimated one in 13 satellites either never make it into orbit or
fail to work once they arrive, according to industry officials.
Communications satellites typically cost about $150 million to
$300 million to build and launch. Satellite insurance costs between
16 percent and 30 percent of the cost of the satellite and the
U.S.-based analysts attributed the launch's failure to shoddy
Chinese rockets. ``They're not the most reliable rockets in the
world. But they're cheap,'' said Eric Stallmer, spokesman for the
Space Transportation Association of Arlington, Virginia, which
represents U.S. rocket makers who compete with the Chinese. ``If it
was my satellite, I'd pay the extra money. You get what you pay
for. That would be the last rocket I'd recommend.''
Among the options available to satellite owners is to contract
with the National Aeronautics and Space Administration to carry
them on space shuttle flights. That's more expensive than rocket
launches, however, and the lead time to book space on the shuttle
U.S.-made rockets are not yet powerful enough alone to send a
satellite as heavy as the one launched today into orbit.
Lockheed Martin Corp., for one, said it didn't compete for the
launch because the satellite ``was too heavy'' for Lockheed's
rockets, said Virnell Bruce, spokeswoman for Lockheed Space and
Strategic Missiles in Bethesda, Maryland.
``We could lift it, but then you would've shortened the
satellite life'' because the satellite would have to use its own
engines to reach the proper orbit, depleting its power supply, she
Both Lockheed and McDonnell Douglas Corp. have plans under way
to build rockets capable of carrying such heavier payloads.
Bloomberg Information Television, a unit of Bloomberg L.P., the
parent of Bloomberg Business News, was in negotiations for carriage
of its 24-hour news service on the satellite destroyed today, a
company spokesman said.