UPDATE 3-U.S. satellite radio merger gets antitrust OK

(Adds broadcast group reaction, analyst comment, background, edits throughout)

By Peter Kaplan and Randall Mikkelsen

WASHINGTON, March 24 (Reuters) - Sirius Satellite Radio's (SIRI.O: Quote, Profile, Research, Stock Buzz) $4.59 billion purchase of rival XM Satellite Radio XMSR.O was given antitrust clearance on Monday as the Justice Department concluded consumers have many alternatives, including mobile phones and personal audio players.

Investors sent shares of both companies sharply higher even though the Federal Communications Commission must still approve the combination of the only two U.S. providers of satellite radio, a deal first announced in February 2007.

In a victory for Sirius Chief Executive Mel Karmazin, who lobbied hard for the deal, the Justice Department agreed the satellite radio companies face stiff competition from traditional AM/FM radio, high-definition radio, MP3 players and programming delivered by mobile phones.

"Competition in the marketplace generally protects consumers and I have no reason to believe that this won't happen here," Justice Department antitrust chief, Thomas Barnett, told a conference call with reporters.

The traditional radio industry, consumer groups and some U.S. lawmakers had criticized the deal, which would bring entertainers such as talk show host Oprah Winfrey and shock-jock Howard Stern under one roof.

The National Association of Broadcasters, which fought against the deal, said the Justice Department had granted XM and Sirius a "monopoly" and called the decision "breathtaking."

Sirius and XM, which are losing money, each currently charge subscribers about $13 a month for more than 100 channels of news, music, talk and sports.