CANADIAN SATELLITE RADIO INVESTING FIRST PHASE IN CANADIAN PROGRAMMING AND INFRASTRUCTURE

Broadcaster Magazine

Canadian Satellite Radio (CSR) has started its $100 million investment and infrastructure development of satellite radio service in Canada. Today, CSR announced Montréal-based engineering firm Yves R. Hamel et Associés Inc. will conduct the drive testing required to implement its terrestrial repeater network in Canadian cities.

"While we are still evaluating with XM the eight Canadian channels requested by the CRTC, the pressure from retailers and automotive manufacturers to commence service this fall has resulted in us beginning our major investments now," said John I. Bitove, chairman and CEO of CSR Inc., XM's service provider in Canada. "That is why we have issued the contract to YRH to begin the testing required to rollout the repeater network now because the repeaters require a long lead time."

YRH will be conducting drive testing of the urban markets across Canada, testing coverage patterns and performance levels to determine where terrestrial repeaters should be deployed. YRH will bring more than 40 years of broadcast engineering experience in Québec and around the world to CSR's infrastructure rollout in Canada.

In total, CSR estimates that it will invest $100 million in satellite radio in Canada within the first seven year licensing period, providing ample opportunity for Canadian talent to reach new audiences and a lot more choices for Canadian consumers. This extensive investment will include:

• phased-in development, installation and implementation of an extensive repeater and base station network to enhance the
• availability of seamless, uninterrupted satellite signal service to Canadian listeners
• original studio and production facilities
• the production of unique Canadian programming in both official languages
• employment for all staffing including: artists, radio personalities, commentators, general management and technical staff

"With the promise that Canadian satellite radio is just around the corner we have to prevent expansion of the grey market in Canada and the subsequent loss of Canadian revenue, jobs and opportunity," said Stephen Tapp, president and COO of CSR. "It's estimated that the grey market has already grown to 100,000 subscribers and in turn created massive consumer demand for the product. We're trying to capture that demand as soon as possible, rather than see

Financial analysts have estimated that satellite radio will have as high as 52 million U.S. subscribers by 2012. If the industry develops as quickly as it has in the U.S., the rollout of satellite radio services will provide an estimated economic benefit of more than $2 billion to the Canadian economy over the next decade in licensing fees, retail sales and taxes, Canadian artist development funds, jobs, marketing spend and artist royalties.

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