Radio Goes Sky-High At Xm Satellite Radio

2001 Words9 Pages
In 1988, American Mobile Satellite Corporation (AMSC) was formed with the intention of providing a satellite telephone, fax and data network. It was ruled by the Federal Communications Commission (FCC) that sufficient bandwidth existed for only one license to be issued for such broadcasting, which forced the competing firms to form the joint venture. It was the above named American Mobile Satellite Corporation (AMSC) who was granted the license. In 1992, CD Radio, who later changed their name to Sirius Satellite Radio, successfully petitioned the FCC and Congress to examine the creation of a new digital audio radio service in the United States (Uhle, 1998). Seeing the potential of digital broadcasting the American Mobile Satellite Corporation created a new division of the company called American Mobile Radio Corporation (AMRC). This new company AMRC was one of four other potential digital broadcasters to apply for a license which would give them the potential to broadcast digital radio to the United States. AMRC (also known as XM radio) were granted a license to broadcast digital radio, it was It was one of just two licenses the FCC granted, the other going to a firm called CD Radio, Inc. (now known as Sirius Radio), which had been working since 1990 on developing the digital radio concept (Uhle, 1998). In 1998, AMRC announced that it will it will exercise a $52.9 million option to upgrade its two satellites supplied by Hughes Space and Communications International, Inc. (HSCI), to the "Max Power" HS 702 geostationary satellites, potentially doubling the capacity of its system. AMRC state "It is the new standard for robust communications networks. This move dramatically strengthens AMRC's ability to better serve the marketplace" (Andrews, 1998). Sirius Radio also launched its satellites to serve the market place and the battle for consumers began. Since their conception there have been many internet and blog discussions over who is the best digital radio station and many comparisons have been made. Both companies provide both goods (radio receiver) and service (the music and entertainment stations provided). Both of these products have to be able to satisfy the customers’ needs, bearing in mind that all customers have different needs (Pride & Ferrell, 2008). “The quick pace of developing technologies and increasing competition can make it difficult to gain strategic competitive advantage through physical product alone. Customers are becoming more demanding. They not only expect excellent high quality goods; they also expect high levels of service along with them” (Lee & Carter, 2005:253).

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