XM Satellite Radio Holdings Inc. (XMSR) Message Board

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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR)

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To: RedCrystal who wrote (505)	3/28/2003 2:25:19 PM
From: pcstel	Read Replies (2) of 3386

Currently it is more like a 1.1opoly. Big difference,no? It really has little to do with competition. After all, If there was none, you would not need subsidies. Don't get me wrong. There is nothing wrong with subsidies as long as you have ARPU and a contract to at least guarantee that you can recoup your CPGA. This is what the CMRS providers get via contracts. The contracts guarantee that they can recoup their CPGA costs over the life of the contract by a guarantee of ratios of ARPU to CPGA. (i.e. they don't give you a @$200 subsidy for a 19.99 monthly ARPU and a one year contract, but they will with a $39.99 per month ARPU, 2 year contract. By the way it the same reason, that the Duopoly of DISH and Directv require subscriber contracts when you buy one of their systems from BBY or CC. The SDAR's model would look a lot better if they could reduce CPGA down to $60 and a one year contract, which is a long way from the current CPGA figures. Best Regards, PCSTEL

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