Antitrust worries could be about to destroy the proposed $11 billion merger between EchoStar and Hughes, leaving Rupert Murdoch's News Corp as the next obvious bidder for Hughes Electronics.

EchoStar, the second largest US satellite television operator, made an all-share bid for General Motors-owned Hughes Electronics last year (Flight International, 14-20 August 2001). Since then EchoStar's stock has lost more than half its value, meaning that an offer worth $30 billion then is now worth only $11.3 billion. The slump in the satellite market since the offer was made puts this still well above Hughes' current market value of just $8.2 billion.

Both companies say that the merger is still under review. But regulators are believed to be concerned that the merger of EchoStar with Hughes Electronics, which owns the largest US satellite TV operator, DirecTV, would seriously reduce competition.

A News Corp takeover would not raise similar concerns, as the company lacks US satellite operations. The company's earlier bid was rejected in favour of EchoStar last year, leaving News Corp with a gap in its Sky Global Networks satellite system.

nÊSatellite telecom operator Teledesic has laid off most of its employees and ordered contractor Alenia Spazio to stop work on two satellites intended for its Ka-band satellite broadband network.

Set up in 1997 to build and operate a network of 840 satellites, Teledesic has suffered from frequent management and strategy changes, and the collapse in the broadband internet market. Between 10 and 15 of the company's 40 staff will remain to "examine alternative concepts" .

Source: Flight International