Satellite radio, cellphones 'set to meet'

Expect to see satellite radio and cellphone services converging within five years, says XM Satellite Radio Holdings chief executive officer Hugh Panero.

"Obviously, our core base is people who listen to radio in the home and car and now in the mobile market, and I think that as other distribution points present themselves, whether it be cellphones or other mobile devices, we obviously can have a place in that," Panero said this week.

He said XM had had discussions with other service providers and hardware manufacturers.

"They clearly have a need to efficiently provide content that will help motivate people to buy their hardware and we're a natural place to go as we have become a more important player in content."

Panero cited greater interest now that XM, the satellite market leader against No. 2 rival Sirius Satellite Radio, draws almost 3 million subscribers in the United States.

In October, XM unveiled its wearable Delphi XM MyFi to further differentiate itself from Sirius and to lure users to a medium previously confined to the home and the car.

The MyFi costs US$350 ($485) in addition to XM's $9.99 monthly fee for more than 130 channels of commercial-free programming. It can run for five hours on a rechargeable battery and uses an antenna in its case to draw down the satellite signals.

MyFi became available this week at US retailers like Best Buy and Circuit City Stores, while XM also gave consumers a chance to reserve units to purchase on its Web site during November.

Panero said 15,000 people had shown interest by leaving emails or credit card information.

The MyFi has a "memory mode" to store and replay up to five hours of XM content. Users can record programmes on the spot or set up a timed recording of a show in advance.

Panero said he believed a portable satellite radio player would eventually be combined with a digital music player.

"Clearly, convergence will occur at some point. It will happen even without our effort because people are beginning to build MP3 capability into a lot of consumer electronic devices," he said.

Interest in satellite has heated up recently with Sirius' US$500 million broadcast deal for shock jock Howard Stern and its hiring of radio industry veteran Mel Karmazin.

Panero said the high-profile hirings underscored the potential of the still-emerging industry, which Karmazin himself had earlier downplayed.

"Karmazin just a few months ago told anyone who'd listen that satellite radio was never going to amount to anything. It's amusing and ironic he'd come out months later to say this is the best thing since sliced bread," he said.

Regarding Stern, Panero said he viewed the deal as expensive.

"Time will tell whether it was worth it. You get good marketing with Stern, but he can be very polarising as well."

- REUTERS