Sirius XM to raise price for basic package

[September 15, 2011]  NEW YORK (AP) -- Satellite radio company Sirius XM Radio Inc. is raising the price of its basic package for the first time on Jan. 1.

The price of basic service will go from $12.95 to $14.49 per month, Sirius said Wednesday. It hasn't raised that price since the service launched in 2002.

Sirius said earlier this year that it would raise prices for basic service, but it didn't say by how much. To get approval from federal regulators for its 2008 merger with XM Satellite Radio, it agreed not to raise prices for three years.

The company has raised prices on add-on features, like a second radio on the same account, in the intervening years and said it will "adjust" prices on many packages on Jan. 1.

"This is the first price increase on our basic service packages since the addition of the NFL, NASCAR, Howard Stern, Martha Stewart and many college sports to our programming line-up," CEO Mel Karmazin said in a statement.

Sirius had 21 million subscribers among all its services at the end of June. They pay an average of just over $11 per month, since many of them get free service for a limited time when they buy a car equipped with a satellite radio.

Helped by the price increase, Sirius XM now expects next year's revenue to grow 10 percent from this year to $3.3 billion. Analysts polled by FactSet are expecting $3.39 billion.

Shares of the New York-based company were up 12 cents, or 6.8 percent, at $1.80 in afternoon trading.

[Associated Press]

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