XM Satellite Life Cut Short?

XM Satellite Life Cut Short?
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XM Satellite Radio may have to replace its two satellites earlier than expected. Boeing has told XM and other clients of a potential long-term issue in the solar array output power on the 702 class satellites. Reflectors that are supposed to focus light on the satellites’ solar panels are degrading faster than expected. The satellites were expected to last about 12 years before the problem was revealed.
XM says this issue will not impact receiver reception quality and insurance is likely to cover premature satellite failure. Right now, the satellites are performing above their specified power levels. Boeing expects the satellites would not fall below those specs before “the latter half of the decade.”
While nothing can be one for the satellites in orbit, Boeing said the problem would be addressed before XM’s ground spare is finished.
XM has enough money to take it through the rest of its nationwide launch in November and a little beyond, but it needs to raise about $200 million more by the end of ’02.
The satellite situation may shake confidence in the product by Wall Street analysts, some note the new technology is being introduced to consumers during an economic downturn.
XM has begun rolling out its service in Dallas/Ft. Worth and San Diego and expects to expand its service area to the rest of the southwest and southeast by Oct. 15.

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