Doubts cast on Sirius & XM merger; are they the only winners?

Mar 8, 2007
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Doubts cast on Sirius & XM merger; are they the only winners?

Mergers, eh?  Some might say they're bad news - big companies getting even bigger and squashing out the little guy - whilst others think they're a good thing.  XM and Sirius are the latest big boys to do the dance of the frotting assets and they've pushed the company line that consumer-experience won't be negatively impacted, most notably through price rises.

It might, however, be a case of what's not said being more important, as Gene Kimmelman of the Consumers Union suggests:

"The heads of XM and Sirius want consumers to believe that prices won't rise after a merger, but that's probably not the case. By highlighting a price freeze for the old package of services, they leave the impression that's what consumers will pay for the new, combined offerings. But they haven't really said what the new prices will be"

That points to a potential hike for anyone wanting to take advantage of whatever new features are rolled out post-merger.  Gene is also loathe to trust the satellite radio companies to fairly manage the situation of their own accord; having seen the evidence, I'd be reluctant too.

What I didn't know was that two of the primary clauses from the initial licencing back in the late nineties was that XM and Sirius wouldn't merge and that the standards they used would be interoperable.  Rather than the current situation where buyers of, say, an XM radio who want to swap to Sirius' service are faced with redundant hardware and a big bill for new equipment, you were supposed to be able to continue using your radio and just switch subscriptions.

It makes for a poor comparison to the DMB Digital Radio service available here in the UK, and - on a broader level again - the wealth of internet radio stations as accessed via computers or standalone media players (such as the TerraTec NOXON iRadio I reviewed last week). 

The Consumers Union have called for a delay in the merger until these questions about consumer choice and value for money have been answered.

Consumers Beware [eHomeUpgrade]


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