Sirius, XM would offer lower price plan

Sirius, XM would offer lower price plan

	Published : Wed, 21 Mar 2007 13:25 By : Agencies Print this Story

NEW YORK (AP) - Satellite radio customers will get the option to pay a lower monthly subscription price for just the channels they want if the industry's two giants are allowed to combine, Sirius Satellite Radio Inc. said in a securities filing Wednesday.

The statement comes as Sirius with XM Satellite Radio Holdings Inc. seek to assuage regulatory concerns that their combination would result in a monopoly in the satellite radio sector. Sirius offered to pay $4.7 billion in stock for XM when the transaction was announced Feb. 19.

The company said the combination would generate efficiencies that will allow it to offer 'a la carte' programming at a price below the current $12.95 per month subscription fees.

An a la carte option would allow customers to pay only for the channels they want to receive. The companies currently offer more than 300 channels of programming, but many of those are duplicated on the separate services.

'Customers may elect to receive fewer channels at a monthly price lower than $12.95; substantially similar programming at the existing $12.95 price; or more channels, including some of the 'best of both' networks, at a modest premium to the cost of one service,' Sirius said in the Securities and Exchange Commission document.

Sirius also said the combination would increase the diversity of programming by eliminating redundancy that would free channel space for additional channels.

The filing comes a day after Sirius CEO Mel Karmazin appeared at a Senate subcommittee hearing and faced questions about the proposed deal's effect on the competitive landscape.

During the hearing, Sen. Herb Kohl, D-Wis., questioned Karmazin's stance that the combined company would face competition from terrestrial radio, MP3 players and Internet radio.

'Satellite radio is a small part of a highly competitive and ever-expanding market for audio entertainment,' Sirius said Wednesday.

Kohl also voiced concern that the combined company would raise prices in the future, particularly if it signed exclusive contracts with sports leagues or popular entertainment providers. Karmazin said he was open to regulatory oversight of price increases as a condition of the merger.

Karmazin also told the panel that subscribers would be able to block programming they find offensive if the government approves the deal.