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CEO Margolese Sees Green Lights, Blue Skies For Sirius Satellite Radio
It’s more green lights and blue skies for Sirius Satellite Radio [SIRI], and the satellite radio business in general, said Sirius Chairman and CEO David Margolese.
He envisions automobile and truck manufacturers promoting satellite radio much more aggressively than previously anticipated. He believes this will happen via intensified marketing and manufacturing efforts.
Margolese expects truckers to be early adopters of satellite radio. Agreements with heavy-truck manufacturers Freightliner and Sterling will lead to a minimum of two-thirds of all trucks having Sirius radios, Margolese said during an investor conference call held last week,.
Additionally, Sirius has OEM agreements with Ford Motor Co. [F], Daimler-Chrysler [DCX] and BMW, among others. Combined, Sirius’ contracts with nine OEMs account for nearly 50 percent of all cars and light trucks sold in the United States. Though Margolese said no assurances could be made, he commented that he wouldn’t be surprised to see satellite radio receivers installed as standard equipment in virtually all cars in a few years.
Margolese also was very positive about Sirius’ milestones and the timely rollout of the service later this year. He identified three key areas that will help bring success to the satellite radio company.
The first is programming, which Margolese described as “the company’s soul.” The programming, which will cater to listeners, not advertisers, was recently augmented by agreements with Playbill Magazine and Live Broadway to provide soundtracks from Broadway musicals.
Additionally, a new subscriber management system will be in place to allow for the monthly service charge to be billed as part of an overall lease agreement that the subscriber/vehicle owner will pay. As part of the billing system, Margolese said that discounts will be offered for multiple subscribers within the same family, although he did not elaborate on those plans.
Finally, the Lucent [LU] chipsets for the end user hardware are on schedule. While Sirius also is developing chipsets that will mirror Lucent’s chips, the company plans to use the Lucent manufactured product going forward. “It’s very possible to build the radios without the Lucent chipsets,” but the Lucent chipsets lower the price of radios, according to Margolese.
Sirius expects to launch its first satellite July 28, with subsequent launches in September and October.
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