NEW YORK, N.Y. – American satellite radio company Sirius XM Radio Inc. (Nasdaq:SIRI) is raising the price of its U.S. basic package for the first time on Jan. 1.
The price of its U.S. basic service will go to $14.49 per month from $12.95, Sirius said Wednesday.
A spokesman for the Toronto-based company that owns XM Canada and Sirius Canada said they don’t plan an increase at this time. Their basic service currently costs C$14.99 per month
Sirius XM Radio Inc., which is a minority partner in Canadian Satellite Radio Holdings Inc. (TSX:SXR), had been unable to raise the price of its basic U.S. services under an agreement with American regulators.
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Sirius had agreed to keep prices unchanged for three years in order to get regulatory approval for its 2008 merger with XM Satellite Radio.
The U.S. company has raised prices on premium packages in the intervening years and said that 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.
The U.S. company had 21 million subscribers among all its services at the end of June. They pay an average of about $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 per cent from this year to US$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 per cent to $1.80 on the Nasdaq market.
– With a contribution from The Canadian Press in Toronto
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