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Tuesday, May 22 2007 @ 10:45 AM CDT
XM Satellite Radio experienced a second day of outages Tuesday after software problems resulted in the loss of one of the network's four satellites, the company said.
Company officials initially expected to correct the problem Monday evening, but are now advising customers that they expect a fix by midday Tuesday.
"We quickly identified the problem and are working hard to return to our normal levels of service," the company said on its Web site Tuesday. "The problem occurred during the loading of software to a critical component of our satellite broadcast system, which resulted in a loss of one of our satellites."
The company did not estimate how many subscribers have been affected, but Internet message boards indicate the problem is widespread. An XM spokesman did not immediately return calls Tuesday seeking comment.
The service is still running on the company's Web site, and XM advised subscribers to tune in online if possible.
XM has four satellites built by Boeing Co. and launched between 2001 and 2006. The first two experienced significant problems and are now regarded as "in-orbit spares," according to the company's annual report.
RBC Capital Markets analyst David Bank said the problem will become an issue for investors if subscribers begin to turn away from the service.
"We'll have to find out exactly what happened, whether it's a systemic problem or just a fluke," Bank said.
Outside of the "headline risk," or bad publicity associated with the problem, Bank said the service problem is not likely to be a long-term concern. "If the issue is cleared up soon, it's probably not that big a deal, unless it's a systemic issue within the network."
The real concern would be if the problems result in lost subscribers, called "churn" in the industry, Bank said, but it is too early to tell if that will result.
Washington-based XM and competitor Sirius Satellite Radio Holdings Inc. are in the midst of trying to combine.
XM shares fell 1.6 percent, or 18 cents, to $10.96 in early trading Tuesday.
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