Saturday, July 26, 2008




Greg Delemeester said...

If the merger creates a monopoly, what would you predict will happen to the price of satellite radio programming? Are there any significant entry barriers preventing other companies from entering the business and competing against the newly merged company?

katiedickson said...

If a monopoly is created, the price of the satellite radio programming will most likely increase. Without the competition, there is no need to maintain their current fairly low prices. As for another company trying to enter the business. At this point it would be hard since XM and Sirius are currently the dominant forces in the business. With the two combined, they will provide a high standard. However, the perfect time to enter a new product would be through the two companies transition phases. Remember when Alltel got big again in Southeastern Ohio, just as Cingular and AT&T merged. As XM and Sirius get their kinks worked out, there is opportunity for new entry.