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The Globe and Mail

XM, Sirius move closer to merger in Canada

John Bitove

Deborah Baic/The Globe and Mail

As XM Canada moves one step closer to merging with its only satellite radio competitor, chairman John Bitove is looking forward to tripling his subscriber base - and the end of an administrative nightmare.

On Thursday, shareholders of XM Canada parent company Canadian Satellite Radio Holdings Inc. approved the all-stock deal struck in November to merge XM Canada with Sirius Canada Inc.

The combined company will have 1.8 million subscribers, and roughly $203-million in revenue compared with the $56.6-million that XM brought in on its own in 2010, with 611,000 subscribers.

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The deal follows a 2008 merger of the U.S. parent companies - creating Sirius XM Radio Inc. - that created headaches for the Canadian subsidiaries. Since both XM Canada and Sirius Canada Inc. rely on them for content, the U.S. deal frustrated subscribers, who were told to tune in to stations they couldn't access, and caused such annoyances as misdirected corporate mail.

Among the biggest problems was that the U.S. company couldn't share information freely about its strategy or future plans, Mr. Bitove, executive chairman of XM Canada's parent company, Canadian Satellite Radio Holdings Inc., said in an interview.

"There's a bunch of stuff that they've got in the pipeline that, once we get this ownership sorted out in Canada, they could talk to us without any worries about, 'Oh, this is something that only applies to the Sirius side or the XM side,'" he said.

Plans include more data services for the satellite radio device, Mr. Bitove said, such as weather information, and recording and playback capabilities.

In an interview in December, Sirius Canada chief executive officer Mark Redmond, who will be CEO of the new company as well, said they could also branch out into movie listings, sports scores and stock tickers.

The deal also gives the merged company formal relationships with all major car manufacturers in Canada. Having their devices preinstalled in vehicles has been a key marketing strategy for satellite radio. Mr. Bitove said the company will continue to focus on the auto sector, in addition to newer technologies such as streaming audio over mobile phones.

"One out of every two new cars in Canada has a satellite radio installed when it comes off the assembly line. That's a remarkable feat," he said. "… There was a point in time where every car in Canada had a CD player in it, and before that it was a cassette player. We could get to the point where we have 100 per cent."

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XM Canada and Sirius Canada will ask the Canadian Radio-television and Telecommunications Commission next month for regulatory approval to close the deal.

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Media and Marketing Reporter

Susan covers marketing and media for Report on Business. Before joining The Globe and Mail in 2009, Susan worked as a freelance reporter contributing to the Ottawa Citizen, the Montreal Gazette and other publications, as well as CBC Radio's Dispatches and Search Engine. She has a Masters degree in journalism from Carleton University. More

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