Wireless

Sirius XM Radio on Thursday announced that its Sirius side posted a 25 percent jump in second-quarter revenue and pared back its net loss as it closed its final quarter as a standalone company.

Revenues for Sirius Satellite Radio, which closed its long-awaited merger with XM Satellite Radio after the quarter ended, rose to $283 million for the three-month period ending June 30, up from $226.4 million a year earlier.

"Despite a tough economy and weak auto sales, gross additions set a new second-quarter record. In the second quarter, both revenue and subscribers grew 25 percent, compared with last year," CEO Mel Karmazin said in a statement, adding that the company's costs, meanwhile, remained essentially flat and aided in reducing its net loss.

Sirius posted a net loss of nearly $84 million, compared with a loss of $134.1 million a year ago.

With the merger now complete, the combined company is expected to generate $400 million in cost savings next year and annualized revenues in excess of $2.4 billion.

"The combined company now has an annualized revenue run rate of over $2.4 billion, making Sirius XM Radio one of the fastest-growing and best positioned subscription media businesses," Karmazin said. "With rapid integration efforts under way, we started realizing synergies on day 1."

Sirius Satellite Radio and XM Satellite Radio announced on Tuesday that they closed their long-awaited merger, ending a 17-month saga since the deal was first announced to bring the nation's only two satellite radio companies together.

The combined company, with more than 18.5 million subscribers, is now called Sirius XM Radio. It is set to rank as the second-largest U.S. radio company, based on annual revenues.

Sirius XM Radio will offer more than 300 programming channels spanning exclusive shows, such as those of Howard Stern and Oprah Winfrey, and a la carte programming. Subscribers will be able to select certain programs from each of the two former companies under one package.

"By offering more compelling packages and the best content in audio entertainment, we are well-positioned for increased subscriber growth," Mel Karmazin, CEO of the newly minted Sirius XM Radio, said in a statement.

The new programs, expected to begin rolling out in early fall, will not require a new device. And as the companies previously stated, subscribers can continue to maintain their current service plan.

While the merger is designed to bring cost savings and synergies to the newly formed company, it was the consolidation of the nation's only two satellite radio companies that raised concerns with the Federal Communications Commission, which approved the deal in a 3-2 vote on Friday.

XM investors will receive 4.6 shares of Sirius for every XM share they currently own, and the ticker symbol will now trade under "SIRI." Sirius XM Radio will be headquartered in New York, and its wholly owned subsidiary XM Satellite Radio will remain in Washington, D.C.

Updated at 4:45 p.m. PDT to clarify that portable receivers are capable of receiving live program signals.

The marriage of satellite radio providers Sirius and XM has finally received the blessing of the Federal Communications Commission on Friday. Now we can all finally get the game we want.

For many prospective customers, a key sticking point was the different selections of sports programming offered exclusively by each provider. A few years back, I wanted to make a present of a Sirius subscription to a friend who spends a lot of time driving around Northern California, especially in places that don't get AM/FM signals. After sampling XM and Sirius' music selections, I knew that she would enjoy the Sirius offerings over the XM offerings. But XM broadcasts more games of the sports she enjoyed--just not all of them. There really wasn't a clear winner. So, to keep from saddling her with the wrong or incomplete service, I opted against the gift. Basically, the lack of a comprehensive offering cost the industry a customer.

I suspect that this was a dilemma faced by many listeners who were in search of more than their local radio stations could offer. But the merger means that listeners will be able to choose from a menu to add programming a la carte. For subscribers, this is a big win in programming. You can also bet that the prospect of replacing existing receivers will irritate early adopters.

Critics, however, will tell you that the merger will result in a monopoly. While the elimination of immediate industry competition will create a de facto monopoly, satellite radio is not the only source of music, talk, or sports broadcasting available to consumers. People are getting their music from many sources today. Besides satellite radio, people are finding their favorite tunes on Internet radio, MP3 players, music-playing cell phones and even traditional terrestrial radio.

To tell the truth, I don't listen to terrestrial radio, or traditional free radio, much anymore, unless there is a game I can't get on television. Indeed, "free radio" offers one of the more exciting and attractive music options in the form of HD radio. Unfortunately, some four years after HD radio hit airwaves, consumers have not embraced the new format, which ultimately suffers in comparison with satellite radio because of its limited range. If I weren't so pleased with Sirius' music programming and the fact that it's offered as part of my Dish subscription, I would probably spring for an HD receiver to plug into my A/V home receiver. But I keep waiting for an affordable A/V receiver to come on the market that has HD radio built in as part of the tuner. When that happens, expect home satellite subscriptions to wane a little.

(Disclosure: I listen to music-only Sirius at home via Dish Network and a complete subscription in my wife's car. The only financial interest I have in either company comes in the form of monthly subscription bills.)

You might think that the satellite industry has the upper hand in broadcasting. But while we're on the topic of things we're waiting for, let's look at some of the things the satellite industry can improve. While Sirius now touts portable units as being capable of receiving live signals, many users complain of spotty or poor reception while on the go. Also, while traffic and weather reports for a few metropolitan areas is great, satellite radio can't provide the same content as local news radio stations, so it would be nice have a portable unit that also gets AM/FM radio stations.

As a prerequisite for FCC approval, the companies agreed to freeze subscription rates for three years. If they try to jack the prices on consumers, expect consumers to change the dial, especially with the wide variety of options that are available to consumers today.

How will this merger affect your listening habits? Write in to TalkBack and let us know.

The Federal Communications Commission on Friday formally approved Sirius Satellite Radio's $3.3 billion buyout of former competitor XM Satellite Radio with conditions.

FCC commissioners voted 3-2 to approve the merger, which will unite the nation's only two satellite radio providers and allow more than 18 million subscribers to receive programming from both services. Executives say that the merger will lead to huge cost savings and the first profits in the industry.

Republican Commissioner Deborah Taylor Tate cast the tie-breaking vote after the companies agreed to a three-year cap on prices, set aside 8 percent of their channel capacity for minority and noncommercial programming, and agreed to pay $19.7 million for past FCC rule violations. The companies also agreed to bring interoperable radios to the market within a year.

FCC Chairman Kevin Martin confirmed the final vote Friday night.

"The merger is in the public interest and will provide consumers with greater flexibility and choices," Martin said in a statement.

The FCC was the final regulatory hurdle the companies needed to clear to move the merger forward. The deal, which was valued at $13 billion in February 2007 when it was announced, was approved by XM and Sirius shareholders last December.

Originally, the agency barred satellite radio companies from combining. Critics said a merger would create a monopoly, but executives argued that satellite radio faces more competition from Internet music services, music playing phones, and online music stores like Apple's iTunes that allow people to play music on iPods.

While the proposed merger sailed through a U.S. Department of Justice review without conditions, key congressional Democrats had urged the FCC to impose limits designed to protect consumers.

XM Satellite Radio and Sirius Satellite Radio confirmed on Thursday that they are discussing a possible consent decree with the Federal Communications Commission in an effort to bring their 17-month merger effort to a conclusion.

The FCC, while inching closer to a resolution since this summer, has had concerns over compliance with commission rules. One concern regards radios with FM transmitters, and the other concern regards transmitters with terrestrial repeaters.

XM and Sirius noted that a possible consent decree with the FCC could include their agreement to:

• Adopt comprehensive compliance plans and take steps to address any potentially noncompliant radios remaining in the hands of consumers.
• In the case of XM, within 60 days of the order adopting the consent decree, shut down 50 variant terrestrial repeaters, and shut down or bring into compliance an additional 50 variant terrestrial repeaters.
• In the case of Sirius, bring into compliance or shut down up to 11 variant terrestrial repeaters within 60 days of the order adopting the consent decree. These terrestrial repeaters were shut off by Sirius in October 2006.
• Make voluntary contributions to the United States Treasury of approximately $17 million in the case of XM, and approximately $2 million in the case of Sirius.

After more than a year of kicking the tires on a proposed merger between XM Satellite Radio Holdings and Sirius Satellite Radio, the Federal Communications Commission has reached a tentative deal with the companies, according to a report in The Wall Street Journal.

The report, however, notes that FCC commissioner Deborah Taylor Tate, seen as the swing vote, has yet to vote on the proposed merger, but is expected to take the plunge shortly.

According to the Journal, Tate is expected to vote to approve the deal, provided that a consent decree is drafted that would call for a fine of roughly $20 million and address several enforcement issues, such as complaints revolving around satellite radio receivers surpassing the FCC power limit.

If she signs off on the deal, Tate will join two other commissioners, also Republicans, who have already given their blessing to the deal. The two remaining commissioners, both Democrats, from the five-member board oppose the deal.