News Corp. terminates contract with Comsat After satellite's destruction, deal off

March 05, 1996|By Ted Shelsby | Ted Shelsby,SUN STAFF

Comsat Corp. said yesterday that News Corp. Ltd. has terminated a $100 million contract with the Bethesda-based communications company for satellite capacity to distribute television programming from the United States and Brazil directly to homes throughout Latin America.

Comsat spokeswoman Janet Dewar said the cancellation represents "a material" loss of business for the company. She said it was not Comsat's biggest contract, but it was one of its biggest in recent years.

The termination of News Corp.'s guaranteed reservation with Comsat came two weeks after the destruction of the satellite that was to be used. when The Chinese rocket carrying the Intelsat satellite exploded 20 seconds after launch.

The Chinese Long March 3B rocket plunged into homes near the Xichang launch site in China's Sichuan province, resulting in the deaths of six people and injuries to 57 others.

News Corp., an international media company based in Sydney, Australia, and controlled by Rupert Murdoch, was to have leased a major portion of the satellite's capacity over five years.

News Corp. had signed the agreement with Comsat in September to reserve its capacity on the satellite.

Marsha Horowitz, News Corp. spokeswoman in New York, confirmed the cancellation of the contract, but said the company was not prepared to discuss the reasons for its decision.

The lost $204 million Intelsat VIIA satellite was to be placed in a geosynchronous orbit over the Atlantic Ocean. In that orbit, it would match Earth's rotation and appear to remain in the same spot.

Comsat said it had expected to provide equivalent Ku-band capacity for News Corp.'s direct-to-home Latin American service an identical Intelsat satellite scheduled for launch by Arianespace tomorrow.

But later yesterday, Ariane- space announced that the launch would be delayed for at least four days because of defective bolts in the rocket.

Ms. Horowitz declined to say why News Corp.'s agreement would not be applied to the new satellite.

Comsat said it was evaluating its options. , but Ms. Dewar declined to say what they might be.

Pub Date: 3/05/96

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