Russian news agencies said the satellites veered off course and crashed near Hawaii after blasting off from Russia's Baikonur space center in Kazakhstan.
The Khrunichev Space Center said the satellites had failed to enter the right orbit after the launch went wrong 10 minutes after take-off.
In a separate statement, space agency Roscosmos said that, "according to the results of our telemetric analysis, it has been determined that the group of satellites went off orbit."
Both agencies said specialists were trying to work out what went wrong. The satellites were the last of a batch of 24 at the heart of Russia's GLONASS, or Global Navigation System, its answer to the U.S. Global Positioning System (GPS).
SETBACK TO SATELLITE SOVEREIGNTY
The launch failure could delay what Russian Prime Minister Vladimir Putin has called "satellite navigation sovereignty," and Russia's attempt to stimulate its economy by having domestic firms mass produce GLONASS consumer devices.
The state has spent $2 billion in the last 10 years on the project, being developed by oil-to-telecoms holding company Sistema.
The Russian government has also proposed a series of protectionist, anti-GPS measures to encourage GLONASS' adoption.
Roscosmos said on Sunday before the launch failure that GLONASS would become operational in six weeks.
In October, Deputy Prime Minister Sergei Ivanov said Russia was looking to introduce duties of around 25 percent by 2012 on the import of mobile phones without the GLONASS navigation system.
In August, the head of the GLONASS operator, Alexander Gurko, said that Nokia, Motorola and Qualcomm were in talks with Russian chip manufacturers about the mass production of GLONASS handheld devices..
Gurko also said that the Russian satellite navigation market, estimated at only $1 billion in 2010, would grow to about $10 billion in 2014 and that GLONASS would also market its technology in India, the Middle East and ex-Soviet countries.
But the general director of M2M Electronics, a subcontractor specializing in microelectronics for the Glonass programme, said the failure to launch the satellites was "no great tragedy."
Evgeny Belyanko told Russian state-owned news channel Rossiya 24 that existing satellites already covered all of Russia, had good coverage up to polar latitudes, and "perhaps not quite as good" coverage of the equatorial region. "Therefore the absence of these three satellites ... will not have any serious consequences.
There are currently 26 Glonass satellites in orbit, many of them launched by the Proton-M carrier. Twenty of the 26 are in working condition; two satellites are on standby; and four satellites are under maintenance, Belyanko said.
