Eutelsats Hot Bird 5 Comes Unglued


European satellite operator Eutelsat has confirmed that its
Matra Marconi Space-built Hot Bird 5 craft is suffering delamination problems to its solar
panels in orbit. And other satellite companies with Matra-built birds have been hit by the
same problem.

It seems that the normally highly effective adhesive used
to hold individual cells together is failing on Hot Bird 5. Eutelsat director general
Giuliano Berretta said the satellite -- launched from Cape Canaveral, Fla., last October
-- is still satisfying its mission, but he did not deny earlier reports that suggested a
loss of 10 percent to 11 percent in maximum output power.

"All of our total services are active, and we are
examining the [delamination] phenomenon to see the rate of decrease because we expect it
to be exponential," Berretta said, adding that the craft is insured, but the
insurance cannot kick in until service is actually affected.

Hot Bird 5 transmits more than 100 digital-TV channels over
Europe. None of those channels has been affected by the problem so far, but they could in
the future.

Berretta said predicting the end result would require a
crystal ball. "But in any case, we have taken steps to have a substitute satellite
for the future, and at our last board meeting, we decided to order another
satellite," he added.

Eutelsat is not the only outfit to suffer. Three other
Matra-built in-orbit satellites are said to be affected, and four other Matra satellites
are stuck on the ground waiting for a solution to emerge. They are: New Skies Satellite's
(formerly Intelsat's) K-TV craft going to 95 degrees east longitude; digital-radio
broadcaster Worldspace Management Corp.'s AsiaStar and AmeriStar satellites; and Société
Européenne des Satellites/Astra's Astra 2B.

New Skies CEO Bob Ross said the delays were difficult to
predict until the cause is known. "At one stage, it was thought that a particular
batch of adhesive was at fault. But that has now been ruled out, so we are back to square
one," he said.

Worldspace senior staff confirmed that they have held
high-level discussions with Matra and prime contractors. Worldspace vice president for
corporate affairs Judith Pryor said signal-test levels on AfriStar, which launched last
October, are "performing above expectations."

A Matra spokesman confirmed that every effort was being
made to determine the cause of the problem.

Berretta said he is increasingly concerned with satellite
reliability. "Worldwide, I think there has been a reduction in the quality of
satellite building over the past couple of years. It is not just Eutelsat that has been
affected. It seems to me that the industry has been placed under too much pressure, and I
would welcome a study from a reputable independent body to look at the reasons behind the
problems. Launchers have problems and satellites have problems, and action must be taken
to improve quality and to look at other construction methods."

Eutelsat also suffered from the total loss of a Russian
Proton rocket and payload July 5, which has put all other launches on hold pending an
investigation. This affects Eutelsat's Sesat, due for launch July 30, and Lockheed Martin
Intersputnik's LMI-1, planned for the end of August.

As far as the enforced launch delays to its Sesat craft -
which was originally scheduled for launch by a Proton rocket from the Baikonur Cosmodrome
in Kazakhstan July 30 -- Berretta described the delay as "catastrophic ... I am not

He added, "The Sesat delay is really bad news for us
because we had many clients in place. It has proved to be a popular satellite. Sesat has
clients waiting for India and many other needs. Indeed, any major delay would count as a
catastrophe for us."