XM Terminates WCS Purchase

By Amy Gilroy -- TWICE, 5/23/2006

Washington — XM Satellite Radio announced the termination of its plans to acquire WCS Wireless due to failure to secure government approval.

“With the inability to obtain the necessary government approval for this transaction in a timely manner, WCS Wireless needed to purse alternatives for its spectrum with greater certainty of regulatory approval,” XM chairman Gary Parsons said.

XM had announced in July 2005 that it planned to buy WCS Wireless, whose principal assets are wireless spectrum licenses that include the top 15 to 20 metropolitan areas. As a further incentive, WCS’s frequency bands are adjacent to XM’s service. XM had indicated that the acquisition might help it expand into “multimedia subscription services including innovative video and data offerings.”

XM claimed the terminated WCS deal would not impact future video services, currently under exploration by the company, said a spokesman.He also noted that XM is currently “pursuing other means of acquiring spectrum,” but has “no present plans to purchase other spectrum.”

XM had hoped to purchase WCS for 5.5 million shares of stock in a deal valued at just under $200 million, according to a published report last summer.