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XM-Sirius Merger Not Possible Says FCC Chairman |
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WASHINGTON, Jan. 18, 2007/Satnews Daily/ ― The chairman of the Federal Communications Commission, Kevin Martin, said on Wednesday the two satellite radio companies, Sirius Satellite Radio and XM Satellite Radio Holdings, would not be allowed to merge under current regulatory rules.
According to a Bloomberg News report, there is an existing ban on single ownership for both satellite services dashing hopes of investors that the two companies merge to save on costs. This restriction was written into the regulations that authorized the two nationwide licenses, the report said.
Although both companies have been increasing their subscriber base by the thousands, they continue to lose money for incurring huge costs to acquire new subscribers.
XM (Nasdaq: XMSR) added more than 1.695 million new subscribers in 2006, ending the year with more than 7.625 million subscribers.
Sirius (Nasdaq: SIRI) ended 2006 with approximately 6,024,000 subscribers, an 82 percent increase over the company's 2005 ending subscriber base of 3,316,560. Sirius added a record 2.7 million net subscribers in 2006.
Based on preliminary financial data, both Sirius and XM achieved their first ever quarter of positive free cash flow in the fourth quarter of 2006.
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