Arc rivals Sirius and XM May Merge

The $4.84 billion merger announcement of arc rivals Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc, the two radio companies was welcomed but with a lot of caution. Though, News agencies had confirmed on February 19, 2007 that XM Satellite Radio and Sirius Satellite Radio have agreed to merge.

Shares of both companies rallied on sanguinity that the proposed merger will result in lower costs and put the merged entity on a faster road to profitability.

XM Chairman Gary Parsons and XM Chief Executive Hugh Panero claimed that the new company "will be better positioned to compete effectively with the continually expanding array of entertainment alternatives."

However, as of now, both companies have to clear regulatory hurdles and get their $4.84 billion merger approved. Until then, both the companies will operate as separate entities, thus delaying passage of any direct benefits to consumers.

Jeannine Kenney, senior policy analyst for telecommunications and media at Consumers Union said, "We would approach this with a good bit of skepticism. This is not necessarily a clear win for consumers."

Another cause of concern is that these companies are the only U.S. competitors in the industry. Common sense says that they will push up the prices once they become one and will thus leave a bad taste in the customers’ mouth.

Sirius Satellite Radio is one of two satellite radio services operating in the United States and Canada, along with XM Satellite Radio.

Headquartered in New York City, Sirius provides 69 streams (channels) of music and 65 streams of sports, news and entertainment to listeners.
Sirius was previously known as CD Radio. The company changed its name to Sirius Satellite Radio Inc. on November 18, 1999.

XM Satellite Radio Holdings Inc. (XM), on the other hand has more than 160 channels, featuring over 67 commercial-free music channels; 34 news, talk and variety channels; 39 sports channels; 21 instant traffic and weather channels, and one emergency alert channel. XM Radios are available under the brand names Delphi, Pioneer, Alpine, Audiovox, Sony and Polk.