Satellite Operators Face Launch Plan Delays After Kazakhstan Failure

By Ed Ballard

LONDON--Satellite operators are facing delays to their launch plans after a satellite was destroyed shortly after take-off in Kazakhstan, in the latest in a string of failures involving Russia-build Proton rockets.

A satellite built for the Mexican government by Boeing Co. (BA) failed eight minutes after liftoff from the Baikonur Cosmodrome in Kazakhstan on Saturday, according to International Launch Services, which carried out the launch.

The launch failure--the fourth involving a Proton rocket since December 2012--will cause knock-on delays for other operators scheduled to send their satellites into space from the same facility.

Giles Thorne, an analyst at Jefferies International Ltd., called the string of accidents "a catastrophic record of failure that will surely precipitate a seismic shift in the launch landscape."

London-based Inmarsat PLC (ISAT.LN) was supposed to be launching the third of its Global Xpress satellites, which underpin its plan to roll out a new high-speed broadband network, in early June.

"This incident involving a failed Proton launch from the Baikonur Cosmodrome is extremely unfortunate and will inevitably delay our launch plans," said Chief Executive Rupert Pearce on Monday.

After the incident, the company withdrew its revenue guidance for the three years to 2016, but said its medium-term expectations are unchanged.

New launches will be held up until the Russian government, which owns the Baikonur Cosmodrome, has completed a probe into the cause of the incident. In March, Mr. Pearce told Dow Jones Newswires that a failure would result in a delay of three to six months.

Jefferies' Giles Thorne said the launch failure, which came a year and a day after the previous loss of a Proton rocket, was "incredible."

France's Eutelsat S.A. and U.S.-listed Intelsat S.A. also have launches in the pipeline at Baikonur. Those too will also be held up, Mr. Thorne said, but he added that the financial impact of the delays is likely to be minimal.

The share prices of Inmarsat and Eutelsat both saw only modest losses: Inmarsat traded 2.7% lower at 969 pence in early afternoon trade in London, while Eutelsat was 1.3% lower at 3,049 euro cents.

A Eutelsat spokeswoman said on Monday that it was too early to assess the financial impact of the delay. Intelsat didn't immediately respond to a request for comment.

--Ambroise Ecorcheville contributed to this article

Write to Ed Ballard at [e-mail]

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