SIRIUS PLAYS DOWN PROBLEMS WITH RECEIVERS
Sirius Satellite Radio said “final bugs in its system” are nothing that can’t be worked out in time for service to start in June. Spokeswoman said problems with receivers were “probably not even perceptible to listener” but company wanted to make sure receivers were “operating flawlessly in real-world conditions” before service was offered to public. Company has been testing system with satellites in N.Y. since Jan. “As part of our ongoing testing,, we evaluate our system and we have very high standards,” spokeswoman said: “We are going through a comprehensive quality assurance program.” She refused to divulge nature of problems or how long it would be before they would be corrected. “We hope these minor problems resolved very shortly,” she said. Rival XM declined comment on Sirius problems, spokeswoman said.
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Company denied industry reports that problems with satellite receivers had caused Lehman Bros. to delay $150 million loan indefinitely. Loan is important because Sirius is down to $75 million in cash and had announced Dec. 1 that it hoped to obtain loan by end of Jan. Satellite analyst Robert Peck said it had enough cash to last until end of 2nd quarter. “We haven’t asked to draw down on the Lehman facility, but we will be drawing funds shortly,” Sirius spokeswoman said. Lehman also characterized problems with receivers as “minor bugs.”
Even with recent setbacks, Sirius still had lead on XM, which has yet to launch satellite. “We're much more further along and you don’t hear people talking about their problems.” Merrill Lynch satellite analyst Marc Nabi agreed Sirius system was of high quality following test drive in which he heard working prototype built with Lucent technology. Nabi said in report Mon. he was very impressed with sound quality and “ability of radio to hand off the signal between the various sources.” He predicted “the few remaining bugs will be corrected in a final prototype” radio and all 8 Lucent chips should be available in coming weeks. Morgan Stanley Dean Witter analyst Vijay Jayant, in similar report Mon., said Sirius technology “appears sound and is being debugged.” Jayant called listening quality “crisp and clear, not impaired” under all combinations of signal delivery.