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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR) -- Ignore unavailable to you. Want to Upgrade?

To: pcstel who wrote (508)	3/28/2003 2:38:54 PM
From: i-node	Read Replies (2) \| Respond to of 3386

It really has little to do with competition. After all, If there was none, you would not need subsidies. Where do you get THAT idea? There is effectively no competition in the SDARS business; XM certainly hasn't been subsidizing to take customers away from SIRI!!! 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. Actual and projected SAC, including fixed marketing costs, were computed by Merrill Lynch as of yesterday as follows: 2002 - $430 2003 - $175 2004 - $120 Variable SAC as follows: 2002 - $116 2003 - $80 2004 - $63 This is clearly as I indicated you would see when we argued this six months ago; that you have a certain amount of substantial up-front costs that are better characterized as startup costs. You should also keep in mind that the average subscriber is paying 1 year in advance; thus, beginning '04, the total cost of subscriber acqusition will be covered in advance. This leaves the full charge to depreciation (non-cash expenses) to cover other operating costs until profitability is reached. In addition, during Q4'02 70% of GM purchasers activated their radios. It is estimated that 20% of GM's cars next year will be factory equipped. You're obviously confused on this issue; perhaps by some other kind of business you've been involved with.