The Paris-based Eutelsat company says its latest spacecraft has failed less than 24 hours after being launched on an Ariane rocket from French Guiana.
The satellite operator said the W3B platform had developed a leak in its propellant system and could not raise itself to its operational orbit.
The 5.3-tonne spacecraft was to have been stationed high above the equator at 16 degrees East, to provide TV, radio, internet and other data services to Europe, Africa, the Middle East and Indian Ocean islands.
The company already has another satellite in production called W3C, and this will be moved into the 16-East slot when it launches in the second half of 2011.
"It's a massive disappointment," said Eutelsat's Vanessa O'Connor, "but our job now as an operator is to continue our services and make sure W3C gets there as soon as possible, and that we expedite the new programme to replace W3B," she told BBC News.
