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XM-Sirius tie-up clears first step

US authorities gave approval to a planned merger of US satellite radio groups Sirius and XM, saying the tie-up is unlikely to harm consumers or lessen competition.

The deal announced over a year ago between Sirius Satellite Radio and XM Satellite Radio would create a company serving around 14 million subscribers.

The US Justice Department said a merger would not harm competition, saying a combined firm would not harm and may help consumers and competition.

The deal still needs approval from the Federal Communications Commission, which manages broadcast licenses.

Although the two companies operate the only satellite radio firms in the US market, the Justice Department said there is "a lack of competition between the parties in important segments even without the merger" and that consumers may still choose "alternative services."

Additionally, the agency cited "technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers" as reasons for approving the merger.

Sirius had more than 8.3 million subscribers at the end of last year compared with 9 million for XM.

Some critics of the deal argued that a combined satellite group would benefit from sharing the same broadcast stars and could bring an end to rival bidding wars for top talent.

New York-headquartered Sirius broadcasts over 125 digital-quality channels, including 69 channels of commercial-free music and counts the controversial star Howard Stern among its broadcasters, as well as home lifestyle guru Martha Stewart.

XM boasts over 170 digital channels and offers a range of sports, music, news and talk radio, as well a device that allows subscribers to listen to its programs in their cars.

Since 2001, satellite radio has grown from a niche medium into a larger phenomenon across the US.

Its total audience reach is around 10 percent of all Americans and some 7 percent of car-drivers, Sirius and XM said.

The subscription fees starting at about US$12 per month allow consumers to get high-quality broadcasts of specific themed programs, ranging from country music to hard rock to talk radio.
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