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March 28, 1996

SATELLITE OPERATORS ABANDON CHINA

By CBR Staff Writer

International satellite operators are defecting from China’s Long March rockets in disconcerting numbers. The Intelsat board has authorized cancellation of a contract to launch two satellites next year with China’s Great Wall Industry Corp. Tony Trujillo, spokesman for Intelsat, told Reuter that the body had yet to sort out the legalities of extricating itself from the agreement. The decision came after recent launch failures in China, and Trujillo said Intelsat was no longer convinced of Great Wall’s development programme, but declined to elaborate further. The cancellations come only days after Hong Kong’s Asia Satellite Telecommunications Co consortium, partly owned by the Chinese government and in which Cable & Wireless Plc is an investor, also abandoned China’s Long March rocket program in favour of the Russian system for the 1997 launch of AsiaSat 3. And earlier this month, Englewood, Colorado-based satellite television provider Echostar Communications Corp cancelled plans for a Chinese launch of one of its orbiters. Intelsat, a global consortium backed by 136 governments, set up in 1964 as a not-for-profit commercial organization, currently owns and operates 23 satellite networks offering telecommunication services around the world. The consortium is now in talks with Lockheed Martin Corp about having the Bethesda, Maryland company launch the two satellites, which are intended to offer voice, video and data transmission. In the wake of a string of rocket launch failures in China, Insurance premiums have soared, eroding the edge Great Wall had over its competitors on price. In January 1995, the Long March 2E rocket built by Los Angeles-based Hughes Aircraft Co was enveloped in a fireball and exploded 45 seconds after take-off. Owned by Hong Kong-based APT Satellite Co, a China-backed consortium that numbers Thailand’s CP Pokphand Ltd group and Singapore Telecommunications Ltd among its shareholders, the the $160m Apstar 2 satellite was destroyed in the blast, and a family of six was killed on the ground. The satellite was to have provided television, telephone and digital telecommunications services in Asia, Eastern Europe, North Africa and Australia. In February this year, a Long March 3B rocket fired in Southwestern China at the main launching base in Xichang veered off course, exploded and crashed 20 seconds after its launch (CI No 2,854). The exact cause of the explosion has yet to be ascertained, but there has been the suggestion of foul play from one doubtful source. The Chinese authorities blame everything from the satellite itself to a sabotage attack directed from the ground. Associated Press reported a claim in a China-funded Hong Kong daily newspaper, Ta Kung Pao, by an anonymous source that suggested foreign competitors may have set off the explosion to humiliate China’s budding commercial industry (CI No 2,601). The paper claims the explosion originated in the Apstar 2 satellite itself, and not in the rocket. For political and economic considerations, said the conspiracy theorists writing for Ta Kung Pao, agents may have used a foreign remote signal beamed at the satellite as the rocket lifted off to destroy it, and that the disaster was therefore entirely caused by the American-produced satellite. It officially killed six people on the ground, injured scores and destroyed about 80 homes. Rumours surrounding a videotape smuggled out from the base by an Israeli technician suggest that injuries were in the thousands. The payload was an Intelsat 708 orbiter that organizations such as Rupert Murdoch’s News Corp hoped to use to offer satellite television in Latin America. Whatever the cause, the latest failed attempt to launch a satellite has left the world’s television industry in disarray. The satellite was capable of carrying more than 100 digitally compressed television channels, enabling broadcasters to reach about two thirds of the world’s population. It will take another two years to build a replacement bird. The cancellations represent a major setback to China’s hopes of becoming a key playe

r in Asia’s fast-growing communications market, but Intelsat is conciliatory, stressing that the decision to cancel next year’s satellite launches will not preclude the two companies from working together in future.

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