XM Loss Widens on Marketing Costs; Customers Increase (Update3)

, the
pay-radio company planning to compound with littler competitor
Sirius Satellite Radio Inc., reported a wider first-quarter loss
as it increased disbursement to pull more than subscribers.

The nett loss expanded to $129.3 million, or 42 cents a
share, from $122.4 million, or 40 cents, a twelvemonth earlier, the
Washington-based company said today in a statement. Gross Sales rose
17 percentage to $308.5 million, missing the $313.3 million average
of 12 analysts' compiled by Bloomberg.

XM spent more than on selling to win subscriptions from new
car buyers. The company is retaining more than clients after a free
introductory time period and is putting its radiocommunications into a bigger
variety of vehicle models, , Associate in Nursing analyst at Janco
Partners in Greenwood Village, Colorado, said in an interview.

''I'm very encouraged,'' said Horace, who doesn't ain the
shares and urges investors purchase them for their above-average
growth potential.

rose 50 cents, or 4.2 percent, to $12.30 at 4:30 p.m. New House Of York clip in Nasdaq Stock Market trading. The shares have
dropped 12 percentage since New York-based Dog Star agreed to purchase the
company on Feb. 19, 2007. Sirius, down 22 percentage since then,
gained 14 cents to $2.87.

XM said it stays hopeful about the combination. The
$4.18 billion trade won clearance from U.S. antimonopoly officials
in March and is pending a Federal Soldier Communications Commission
ruling. Dog Star is offering 4.6 of its shares for each of XM's.

Subscriber Growth

XM added 355,000 endorsers through gross sales to new car
buyers and rental companies in the first quarter, up from
225,000 a twelvemonth earlier. Subsidy and statistical distribution costs rose 64
percent to $71.5 million as the company paid more than to have got its
radios installed in new cars.

''New auto consumer acceptance of artificial satellite radiocommunication stays a
strong growing platform,'' Head Executive Military Officer
said on a conference call.

XM gained a nett 303,000 endorsers in the quarter, or 6
percent more than a twelvemonth earlier. It ended the one-fourth with 9.3
million, a addition of 18 percent.

The company lost 51,000 clients who bought equipment in
stores or online, compared with a addition of 60,000 a twelvemonth earlier.

Retail gross sales are likely to be ''soft'' until consumer
confusion over the possible amalgamation is resolved, Horace said.

Cancellations

Churn, which mensurates how many people canceled their
subscriptions, dropped to 1.77 percentage from 1.78 percentage a year
earlier. XM's retention, the index of those who subscribe
after a free trial time period ends, rose to 53.3 percentage from 51.5
percent.

Sirius and XM, the lone two pay-radio companies, have got said
their combination is justified because they vie in a broader
audio amusement marketplace that includes iPods, free radiocommunication and
Internet broadcasting. The companies proposed lower-priced
packages of scheduling to consumers to win the FCC's approval.

XM, whose programmes have , and
Major League Baseball, complaints $12.95 per month, a cost that
drops as low as $9.99 a calendar calendar month with longer subscriptions

(The company held a conference phone call at 10 a.m. New York
time. To listen to a replay, and click
on ''Investor Info'' link.)

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