Alcatel Space Delivers First Payload for XM Satellite Radio - Company Business and Marketing

Cambridge Telcom Report, April 24, 2000

Alcatel Space, Europe's leading satellite exporter, Monday announced the completion and delivery to Hughes Space & Communications Company of the first of two state-of-the-art communications payloads for XM Satellite Radio (Nasdaq: XMSR). The second payload is scheduled for delivery in May 2000.

The XM payload was manufactured and integrated onto its module at Alcatel Space's Toulouse, France, facility. On Friday, April 14, 2000, it was shipped to Hughes' spacecraft factory in El Segundo, CA, where the 3,500-pound payload module will be integrated into Hughes' 702 spacecraft bus. Hughes Space & Communications (HSC), the world's leading manufacturer of commercial communications satellites, will conduct functional, antenna range and environmental testing on the spacecraft in preparation for launch later this year.

In making the announcement, Alcatel Space President and CEO Jean-Claude Husson stated, "We designed the largest payload ever made, and we successfully demonstrated our capabilities to meet the challenge of its very high-power requirement. Our collaboration with Hughes went extremely well, and I am proud of the confidence placed in us by both Hughes and XM Radio."

Hugh Panero, XM's President and CEO commented, "Completion of this payload module represents a tremendous milestone in XM's development. XM is on schedule and well on its way to launching its satellites later this year. It has taken an enormous engineering and manufacturing effort to produce the most powerful payload in the world, and everyone, from XM's space segment team to crews at Hughes and Alcatel Space, can be proud of this achievement."

"We call the Hughes 702 satellite our 'powerhouse,' and thus it is particularly well-suited for the XM Satellite mission," said HSC President and CEO Tig H. Krekel. "With 18 kilowatts total spacecraft power at beginning of life, these will be the most capable satellites Hughes has built."

The XM payload provides two very powerful S-band downlink channels over the contiguous United States with an equivalent radio-frequency (RF) transmit power more than 7 megawatts per channel, a first in the satellite industry.

The payload benefits from several innovative developments from Alcatel Space in paralleling power amplifiers. XM's high channel transmission power is obtained by combining sixteen 228-watt S-band traveling wave tube amplifiers through a multi-stage configuration. This power level is needed to allow digital radio satellite signals to be received with ample margin in cars or at home throughout the contiguous United States, thereby offering excellent sound quality and a large reception footprint.

XM's Hughes 702 satellites, dubbed "XM-Rock" and "XM-Roll," will operate in geostationary orbit, positioned on either side of the United States at 115. West Longitude and 85. West Longitude, respectively. XM's uplink facility, provided by Calian's SED Systems, will be collocated with the company's Washington, DC, studios and broadcast center, and Telesat Canada will provide in-orbit operations.

Alcatel Space's involvement in the field of Satellite Digital Audio Broadcasting started back in 1994 with the company's cooperation with WorldSpace, today the world's first operational digital audio broadcasting system. With WorldSpace's AfriStar satellite launched in 1998 and in service since October 1999, and the second satellite, AsiaStar, launched this past March 21, the WorldSpace program continues to progress under the prime contractorship of Alcatel Space. For WorldSpace, Alcatel designed sophisticated payload solutions using on-board baseband digital processing techniques, allowing easy uplinking of radio programs and the possibility of bandwidth-on-demand to broadcasters. XM Radio's satellite system technology and design capitalize on Alcatel's experience.

XM Satellite Radio Inc. (Nasdaq: XMSR) is developing a new band of radio. Starting the first half of 2001, XM Radio will beam up to 100 channels of digital-quality music, news, sports, talk and children's programming directly from its two powerful satellites to vehicle, home and portable XM-Ready radios coast-to-coast for a monthly subscription fee of $9.95.

The company has agreements with nine leading consumer electronics companies to manufacture and distribute radios capable of receiving the XM Radio signal, including Sony, Alpine, Pioneer Electronics Corporation, Delphi Delco Electronic Systems, Audiovox, Clarion, Mitsubishi Electronic Automotive America, Motorola and Sharp Corporation. In addition, XM Radio has entered into a long-term distribution agreement with General Motors to integrate XM- Ready radios into its vehicles commencing in 2001.

American Mobile Satellite Corporation (Nasdaq: SKYC) holds a controlling interest in the company.

XM Satellite Radio is backed by a group of industry-leading strategic investors, including General Motors, Clear Channel Communications and DIRECTV, respectively the leading car, radio and satellite