SATELLITE TODAY’s Company Profile
This week, we take a closer look at a company with a plan to dominate the satellite radio market: XM Satellite Radio. For more in-depth competitive intelligence reports detailing “who’s who” and “what’s what” in the satellite and telecom arena, visit SATELLITE TODAY’S “Company Profiles” section, the industry’s most reliable source for updated financial, executive, historical and news-related information. Check it out at http://www.telecomweb.com/profiles/.
Company: XM Satellite Radio Holdings [Nasdaq: XMSR]
Headquarters address: 1500 Eckington Place, NE, Washington, DC 20002
Sales: $20.2 million for 2002 compared to $500,000 for 2001
CT Breakdown: XM Satellite Radio Holdings is aiming to be the kingpin of satellite radio. Founded in 1992, the company directly broadcasts 100 channels of digital- quality radio to motorists and home/office arrangements throughout the continental United States for a monthly subscription fee of $10. The company delivers 71 channels of commercial-free music and 29 channels of sports, talk and children’s entertainment. The company launched its commercial service in Dallas/Ft. Worth and San Diego in September 2001, and rolled out nationwide service in November that year. XM holds one of only two licenses issued by the Federal Communications Commission to operate a national satellite radio system. Sirius Satellite Radio [Nasdaq: SIRI], XM’s rival, rolled out its national service this past year.
Outlook: The challenges facing XM include raising more money in extremely tight capital markets, educating the public on the advantage of subscription satellite radio service, increasing its subscribership and completing more agreements with retailers and car distributors. The company also needs to continue to set realistic numbers and hit on them. One advantage XM has is solid financial backers, such as General Motors [NYSE: GM], Honda [NYSE: HMC] and Boeing [NYSE: BA]. This gives management another option to raise capital in the event that the capital markets dry up. Overall, the outlook for XM is positive because of a growing demand for satellite radio, a market-savvy and efficient management team, strong partnerships with major retailers and car dealerships and its ability to deliver solid results based on its business plan.