XM, Sirius promise low cost packages, more choice

By Franklin Paul and Rachelle Younglai

NEW YORK/WASHINGTON (Reuters) - U.S. satellite radio companies Sirius (SIRI.O: Quote, Profile, Research, Stock Buzz) and XM (XMSR.O: Quote, Profile, Research, Stock Buzz) promised on Monday a variety of subscription packages that cost up to 46 percent less than current plans if their merger is approved.

In a bid to allay critics' concerns that their merger would raise prices and limit programming choices, the two companies announced several new packages they said would offer consumers more choices than they could provide individually.

Under one package, customers could pick 50 channels on either XM Satellite Radio Holdings Inc.'s or Sirius Satellite Radio Inc.'s systems for $6.99 a month. Additional channels could be added, starting at 25 cents for some music and news channels, ranging up to $6 for shock jock Howard Stern's show.

Currently, subscribers pay about $13 a month for more than 100 stations on either XM's or Sirius' systems.

"We said we would provide more choice than ever before and that's what we will do," Sirius Chief Executive Mel Karmazin told a National Press Club luncheon.

The XM-Sirius deal would combine the only two providers of satellite radio service in the United States and needs approval from the Federal Communications Commission and antitrust authorities at the Justice Department.

The promise of "a la carte" programming could gain favor with FCC Chairman Kevin Martin, who is an ardent supporter of allowing consumers to pay for only the channels they wish to receive.

"If the Department of Justice approves the merger, it will be difficult for the FCC to say no. This makes it even more difficult for the FCC to say no," said Blair Levin, analyst with Stifel Nicolaus.