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PanAmSat suffers satellite setback

The satellite company finds problems with batteries on a satellite that may lead to service outages for its broadcast news and paging customers.

PanAmSat said it has found problems with the batteries on a satellite that could lead to service outages for its broadcast news and paging customers.

The satellite company has discovered a problem with the power source in another of its "birds" that has caused brief transponder outages, the company revealed in a recent Securities and Exchange Commission filing.

The battery problems with the satellite are similar to the failures the company found on a different satellite in March, the company said in SEC documents.

The company has faced other service snafus this year. In May, PanAmSat's Galaxy IV, one of 18 satellites in the company's fleet, failed leaving nearly 40 million people without paging service. PanAmSat handles the transmission for the majority of the pagers in the United States.

The company, which is owned by General Motors' subsidiary Hughes Electronics, also said it could lose customers or face claims over the failures if they continue.

The batteries are designed to operate only during 40-day solar eclipse periods that occur twice a year.

"There can be no assurance that additional battery cell failures will not occur in the future," the company said in the regulatory filing.

PanAmSat's customers include CBS News and several cable television channels in addition to PageNet.

PanAmSat is working on backup plans to move customers to other existing satellites or yet-to-be-launched satellites in the event of another failure. The company plans to have 25 satellites in orbit by the year 2000.

Stock in the company closed down nearly 11 percent today at 37.125. Shares have traded as high as 66.125 and as low as 26.5 in the past 52 weeks.

Meanwhile, stock in Hughes, which built many of PanAmSat's birds, closed more than 4 percent lower today at 38.6875. Hughes shares have traded as high as 57.875 and as low as 30.375 in the last year.

This year has been a difficult one for PanAmSat. The company also lost a satellite when a Boeing Delta III rocket that was set to carry the bird into space exploded during its maiden voyage in August.

Reuters contributed to this report.