[Infowarrior] - Service Outages for XM Customers Continue Into Second Day

[Richard Forno]

Ahead of the Bell: XM Satellite Silent
Tuesday May 22, 8:43 am ET
Service Outages for XM Customers Continue Into Second Day
http://biz.yahoo.com/ap/070522/xm_satellite_ahead_of_the_bell.html?.v=1

NEW YORK (AP) -- With XM Satellite Radio service outages entering a second
day Tuesday, subscribers from around the country posted increasingly
frustrated messages on user Web sites and analysts started raising the
prospect of potential cancellations.

XM on Monday said some customers had their service disrupted due to software
problems, beginning around noon Eastern Time. The company did not say how
many of its 8 million subscribers were affected, but said it expected the
problem to be fixed by Monday evening.

Overnight, some subscribers received an e-mail message that anticipated
"full signal strength will be restored by early Tuesday morning."

But, a string of postings early Tuesday on XMFan.com, an independent Web
site, indicated the outages were still widespread. While many comments
suggested users were surprised by the reception problems, a few showed
increasing frustration that they could not get a signal.

Representatives for the company could not be immediately reached early
Tuesday, and there was nothing posted on the company's Web site addressing
the issue.

RBC Capital Markets analyst David Bank said the problem will become an issue
for investors if subscribers begin to turn away from the service.

"We'll have to find out exactly what happened, whether it's a systemic
problem or just a fluke," Bank said.

Outside of the "headline risk," or bad publicity associated with the
problem, Bank said the service problem is not likely to be a long-term
concern. "If the issue is cleared up soon, it's probably not that big a
deal, unless it's a systemic issue within the network."

The real concern would be if the problems result in lost subscribers, called
"churn" in the industry, Bank said, but it is too early to tell if that will
result.

XM and competitor Sirius Satellite Radio Holdings Inc. are in the midst of
trying to combine.

In premarket electronic trading, XM shares were flat with Monday's close at
$11.14. Sirius shares were up 2 cents at $2.81, from their Monday close at
$2.79.