One of the region's most ambitious satellite TV projects is on indefinite hold after its US backers stopped work on its pair of satellites and half the staff were laid off. Taipei-based Asia Satellite and Broadcasting Corp (ABCN) has laid off 100 staff and cut the salaries of the remainder by 10-50 per cent. ABCN had planned to start a direct-to-home (DTH) satellite TV service in September using the L-Star 1 satellite that was due for launch in May by the Ariane rocket programme. The US$500 million project was planned to reach viewers in India, Thailand, Taiwan and the mainland. Thailand's United Communications Industry (Ucom), ABCN's main backer with about a third of the equity, is negotiating with Taiwanese business interests as part of a possible management buyout. Despite this, staff with ABCN have been told the project is 'on hold indefinitely'. The management group is led by one of the other ABCN investors, Loral Corp. Further evidence of ABCN's problems came with the announcement by a Loral subsidiary, satellite manufacturers Space Systems/Loral (SS/L), that it was laying off 300 workers at its Palo Alto headquarters in California. The redundancies that will occur over the coming few months represent 9 per cent of SS/L's workforce. They were involved in building L-Star 1 and its sister satellite, L-Star 2 that was to have been delivered in late 1998. Loral chairman and chief executive Bernard Schwartz said work on the two satellites had been suspended. A third Asian satellite under construction for Indonesia's Pasifik Satelit Nusantara also was now on hold, Mr Schwartz added. He offered no date work might resume, saying: 'The three satellites on which we have stopped work continue to be valuable, marketable assets which, if the current programmes are not re-started, may be deployed to other customers who will benefit from early delivery.' Mr Schwartz said he still felt Asia's long-term prospects were bright. 'We continue to believe that the Asian market, where investments in satellites are critical to the establishment of a telecommunications infrastructure, remains a robust, sustainable long-term opportunity for Loral.' Known as M2A, the Indonesian satellite was due to be delivered in the fourth quarter of 1999 to provide telephony, multimedia and TV services throughout Asia. Ucom bought into ABCN almost by default last summer when it acquired the stake owned by Thai businessman Sondhi Limthongkul when his Manager Media Group collapsed. Ucom was interested particularly in Manager's engineering division, and in acquiring this asset it discovered it had taken control of the DTH project as well. A staff member said Ucom was never comfortable with ABCN's regional ambitions, preferring to remain focused on its Thailand operations. 'They went to buy a Yugo and they came home with a Ferrari,' the source commented.