SIRIUS MULLS U.S. PRICE INCREASE, BUT CANADA TO HOLD STEADY Grant Robertson – Globe and Mail Sirius Satellite Radio Inc. suggested it may increase the price of its service in the United States amid deepening financial losses, but the Canadian operation doesn't plan to follow suit.
Mark Redmond, chief executive officer of Sirius Canada, said the newly launched Canadian service plans to maintain its monthly subscription rates despite talk yesterday that the U.S. company is considering raising its prices.
"The Canadian company will decide if and when we're going to make any program changes or pricing changes," Mr. Redmond said. "We have no plans to do anything on a pricing standpoint."
Sirius Canada, which is part-owned by the New York-based Sirius Satellite Radio, charges $14.99 a month for 100 channels. That is 15 per cent more than rival XM Canada, which offers 80 channels for $12.99.
Using the Canadian market as an example, Mel Karmazin, CEO of Sirius in the United States, said he believes there is room to raise prices because consumers are willing to pay a premium for the company's programming.
"We certainly believe there is an opportunity for Sirius to raise the price . . . and we continue to evaluate it," Mr. Karmazin said on a conference call to discuss the company's fourth-quarter results. Sirius and XM both charge slightly less than $13 for a monthly subscription in the United States.
Sirius reported deepening losses in the fourth quarter. It lost $311.4-million (U.S) between October and December, compared with a loss of $261.9-million a year earlier, on rising marketing and programming costs.
Analysts say the costs are a growing concern for the two U.S. satellite radio companies. On Thursday, a director of XM resigned from its board, saying the company faces a potential "crisis." XM, which has more than six million subscribers in the United States lost $268.3-million in the fourth quarter.
SIRI (Nasdaq) fell 39 cents (U.S.) to $5.26.
Sirius Satellite Radio Inc.
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