Thales Alenia Space, a French-Italian aerospace company that manufactured KT Corp.’s satellite Koreasat-5 ― a communication satellite also known as the Mugungwha 5 ― will most likely have to reimburse KT for a malfunction found in the solar panels, a source said on Wednesday.

“KT will call for Thales Alenia to take responsibility, since (the satellite) is still within the design lifespan,” said the source, indicating that the insurance coverage has yet to expire. 

Thales Alenia's insurance is expected to cover the costs. 

Mugungwha 5 has an expected lifespan of 15 years.
It was launched in August of 2006 after it was manufactured by Alcatel, which sold its satellite business to Thales Alenia Space. 

The source also said while the glitch was not a major problem, it should be fixed since the panels will not be able to collect as much sunlight as possible, and therefore would not be able to generate a full capacity of electric power.

Currently, the satellite is said to be generating only half of its full energy capacity.
KT is now considering launching an alternative satellite as early as 2016.
The company also said that the glitch would cause no real damage to the satellite.

“Most satellites encounter these types of problems, so it’s all routine,” said one KT official. “There’s also a backup system in place, meaning there would be no need to be concerned about communication disturbances.”

The Mugungwha 5 is being used for satellite broadcasting for the nation’s terrestrial broadcasters, and also for military communication.

Satellites have become a problematic issue for KT, as the country’s second-largest telecom company is currently being pounded for being short-changed in a sales transaction for a retired satellite to Hong Kong-based Asia Broadcast Satellite.

KT Sat, the affiliate under KT that had been in charge of the disputed sale that took place in 2010, now has to buy back the satellite on orders from the Future Ministry, which earlier launched an investigation into the sale, saying it was illegal.

ABS, however, is refusing to resell the satellite at a higher price, and is demanding KT pay at least 500 million won ($473,800).

“The matter has been handed over to an international mediation body, so we are in a position where we can’t further comment,” said Annette Chan, a spokeswoman for ABS. “We know this is an issue of much significance in Korea, but because KT is also a client of ours, we have no choice but to be cautious.”

The International Court of Arbitration in New York is currently arbitrating the resale.

By Shin Ji-hye (shinjh@heraldcorp.com)