Intelsat Satellite Lost in Space

    January 17, 2005

Intelsat’s IS-804 satellite experienced a sudden and unexpected electrical power system anomaly that caused the total loss of the spacecraft.

In accordance with existing satellite anomaly contingency plans, Intelsat is in the process of making alternative capacity available to its IS-804 customers. The satellite, launched in 1997, furnished telecommunications and media delivery services to customers in the South Pacific. Intelsat and Lockheed Martin, the manufacturer of the satellite, are working together to identify the cause of the problem. Intelsat currently believes that there is no connection between this event and the recent IA-7 satellite anomaly as the two satellites were manufactured by two different companies and their designs are different.

A number of Intelsat-operated satellites in the region are being utilized to restore service to affected customers, and many end users of IS-804 capacity are already operating normally using replacement capacity. Intelsat has also begun working with other fleet operators where necessary to ensure the quickest possible restoration of service for customers.

According to a Reuters article,

“The world’s No. 2 communications satellite operator, which is in the midst of being acquired by private equity investors for $3.1 billion, said late on Sunday it expects to record a non-cash impairment charge of about $73 million to write off the value of the IS-804 satellite.

The satellite was not insured since the company insures only those with a book value of more than $150 million.”

“The loss of a satellite is an extremely rare event for us, and our first priority must be restoration of service to our customers,” said Conny Kullman, CEO of Intelsat. “Intelsat remains firmly committed to the region that was covered by IS-804, and all necessary effort and assets will be allocated to ensure Intelsat satellite coverage throughout the Asia-Pacific region.”

Intelsat expects to record a non-cash impairment charge of approximately $73 million to write off the value of the IS-804 satellite. The IS-804 was not insured, in accordance with Intelsat’s practice of insuring only those satellites with a net book value greater than $150 million.

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