Some interesting information has come in about a the possibility of SIRIUS launching a 4th Satellite into orbit. This from Bear Stearns:
"There has been some concern recently about the implications of Sirius potentially launching its 4th satellite, which is already completely manufactured and flight ready and is in storage as a ground spare.
As the company has mentioned in the past, it could launch the satellite into a geostationary orbit. However, since it was originally constructed for elliptical orbit, it would have to be refurbished, which could take as much as 8-10 months to complete and could cost Sirius an additional $25-50 mn.
While not incorporated in our current projections, we think that this decision would be positive for the company in many ways, such as: 1) It would augment the reception of their signals to mobile and fixed devices, and 2) it would help insulate any service interruption should one of their current satellites fail.
The major impact on capex likely would include: (i) accelerated launch and insurance costs of $80-100 mn, (ii) cost of refurbishing of $25-50 mn, & (iii) accelerated buildout of a new ground spare that could cost about $100-125 mn. In aggregate, we think capex over the next year could be higher by $200-275 mn, that is not included in our current capex forecast. We assume negligible cost for TT&C.
We note that this would merely be capex acceleration, except for refurbishing costs. However, due to potential timing of the capex coupled with any outperformance of gross adds, Sirius could potentially need to raise additional funds. Lastly we underscore the point that we don't believe Sirius has made a definitive decision yet (although we expect one shortly). Hence, we maintain our Peer Perform."
Translation:
While a decision hasn't been made (or released), there's a possibility of Sirius launching a 4th satellite into geostationary orbit as opposed to their current elliptical geosynchronous orbit. Bear Sterns likes this idea because it compliments the signal, but it'll cost Sirius to convert the satellite to perform this way.
Very interesting indeed.
UPDATE:
Had a great back and forth with a reader, and here's some thoughts about the mechanics of all this.
Keep in mind that Sirius has 3 satellites in constant motion over the sky - 2 within range of the US at the same time. If Sirius were to launch a geostationary satellite, they would probably need to time it so that they drop the signal from a second orbiting satellite while it's over the US. Each satellite must transmit on a unique frequency so it's not overlapping with other satellites. So with a 4th geostationary satellite, Sirus could either kill power on a second satellite while it's over the US, or use half of each geosynchronous bird's resources and run the geostationary one at full tilt.
UPDATE 2:
More on this from TheStreet.
Leave a comment