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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR) -- Ignore unavailable to you. Want to Upgrade?

To: Michael Hart who wrote (510)	3/28/2003 3:23:13 PM
From: i-node	Respond to of 3386

When is the expected timeframe for replacing their satellites? The situation is this. Originally, the two satellites were to have an expected useful life of 15 years. However, the particular model (Boeing 702) is having a problem causing them to lose power prematurely. As it turns out, there is a virtually identical 702 that was launched 18 months prior to XM's; as a result, they're able to use that satellite as a gauge as to what to expect on XM's. In the CC they indicated they may co-locate the existing two satellites in 2005, broadcasting one channel from each to conserve power, accompanied by launching the spare. An insurance claim has been filed for the two failing units and I believe they expect to get substantial reimbursement in connection with it. The total cost of the three existing satellites, including launch costs for the first two, was in the neighborhood of $550M. I think a likely outcome is that XM is going to end up getting reimbursed for the vast majority of the (replacement cost - value received). But it continue to be unclear that degradation is as rapid as some have suggested and I would assume they'll attempt to get all the use out of them they can...