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Sirius Reports Good Q3, Outlines 2.0 Service

11/08/2010 12:01:00 AM Eastern

NEW YORK — Sirius XM’s planned 2.0 service
will increase bandwidth 25 percent, enabling
the satellite-radio broadcaster to offer more
programming to next-generation satellite radios
without making existing radios obsolete revealed.

Although the company already offers more
than 130 channels, the 2.0 service will enable
more music and audio channels as well as more
data services to new radios, potentially including
expanded programming for Hispanics as part of
a separate subscription tier, CEO Mel Karmazin
said reporting upbeat third-quarter results.

Adjusted total revenues grew 15 percent in the
third quarter to $722.5 million and for the ninemonth
period by 13.4 percent to $2.1 billion. Net
income grew for the fourth consecutive quarter
to $67.6 million compared with a year-ago loss
of $151.5 million. Nine-month net income hit
$124.5 million compared with a year-ago loss of
$363.8 million.

The 2.0 service is due to launch in the fourth
quarter of 2011.

Because the new service will be available only
on new radios, Sirius XM will make it possible to
sell aftermarket satellite radios to vehicles with
OEM-installed satellite radios, spur replacement
purchases of transportable radios, MP3-
style headphone portables offering live service,
and satellite home tuners.

The first 2.0 radios will be available next fall
at retail stores, said operations and sales president
Jim Meyer said.

The radios and service, said Karmazin, present
“huge upside opportunities for us,” noting that
the company offers only three Hispanic channels.
With 2.0 service, he said, it “would not be
difficult” to create a group of 10 to 12 channels
devoted to the Hispanic market. The company
“has not done a good job at all reaching out to
the Hispanic-speaking market,” he noted.

Separately for the three months ending September,
Sirius XM lost 188,884 retail (non-OEMradio)
subscribers compared with the year-ago
period and lost 637,188 retail subscribers in the
first nine months of its fiscal year. The losses
brought its retail subscriber base as of Sept. 30
to 7.09 million out of a total subscription base of
19.86 million.

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