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Technology Stocks : Sirius Satellite Radio (SIRI)
SIRI 21.69-6.5%Oct 31 9:30 AM EST

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To: MJ who wrote (5619)11/16/2006 4:42:23 PM
From: i-node  Read Replies (3) of 8420
 
Why is it irrelevant----------seems a perfectly good question.

I truly would like to know.


I explained all this to PCSTEL in this thread a month or two ago, and probably have discussed it here 20 times before that. But, for you convenience, here goes:

XM requires only two satellites to provide service. Sirius thought they would require three but is having to launch a fourth one to provide adequate signal coverage. Until the fourth one is launched, Sirius will continue to have significant reception problems.

While XM does have four satellites in orbit, they only require two to provide complete service. They have four only because two failed prematurely (for which their in-orbit insurance policy paid them). So, while it is true that XM has four satellites at the moment, they don't NEED four to do the job and they haven't paid for four. They currently have one operating at full power and two operating at half power (which will extend their lives); one more hasn't been placed in service yet.

Sirius is having to foot the ENTIRE BILL for four satellites for one reason only: The made poor engineering choices early on.

From a financial perspective, it matters. XM has, in effect, two brand new satellites with 15 years of remaining life, plus two that are expected to continue operating for several more years at half power.

Sirius, OTOH, has three that are about half used up and is having to launch a fourth at a cost of hundreds of millions of dollars to make up for their weaknesses. Presumably, Sirius will attempt to transition to using the GEO arrangement XM selected as their old satellites expire. Had they done so in the first place it would have saved them hundreds of millions.
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