U.S. News

XM-Sirius Defends Proposed Cost of Merged Service


The price of satellite radio offered by a merged Sirius Satellite Radio and XM Satellite Radio would be less than subscribing separately to both services, Sirius' chief executive Mel Karmazin said on Wednesday.

"If our merger is approved, we will offer consumers a much more attractive choice -- the best of each service on one radio at a price well below the cost of the two services today," Karmazin said in prepared remarks for a House telecommunications subcommittee hearing.

Karmazin's prepared remarks about Sirius' acquisition of XM did not elaborate about what the new price would be. XM and Sirius each charge subscribers $12.95 monthly.

Sirius/XM Debate

One week ago, Karmazin told a House Judiciary Committee antitrust task force that that he was ready to make concessions in order to get the deal approved, such as capping prices.

"Those who want to take advantage of new services, like the best of both program line-ups, will be able to do so for less than this would cost today, -- all with their current radio," he said in remarks prepared for Wednesday.

Earlier on Wednesday, the New York Times reported that Federal Communications Commission Chairman Kevin Martin wanted more clarity about what the combined service would cost, if government regulators agreed to let Sirius buy XM.

Consumer groups have criticized the proposed deal, saying it could mean higher prices and obsolete equipment for some subscribers.

The proposed deal needs to be approved by the Justice Department's antitrust office as well as the FCC. The FCC issued the satellite radio licenses in 1997 on the condition that the two companies would never merge.