XM Projects Sub Growth

1/24/2002 3:29 AM Eastern

XM Satellite Radio Holdings Inc. plans to reach 350,000 subscribers with its
nationwide radio service by the end of 2002, CEO Hugh Panero said in an earnings
call Thursday.

During the first several weeks of service in the fourth quarter of 2001, XM
signed more than 27,000 customers.

'We've answered a very basic question: Will consumers pay for radio?' Panero
told analysts. 'The answer is a resounding yes.'

Only 5 percent of XM subscribers pay the $9.95 fee for their radio service on
a monthly basis, Panero said. Other customers have prepaid for their service on
a quarterly, semiannual or annual basis.

Subscriber-acquisition costs for 2002 are expected to be $130 per new
customer, company executives said, and churn so far has been negligible.

XM reported a consolidated operating loss of $135.3 million for the fourth

When asked how competitor Sirius Satellite Radio, which has yet to launch its
consumer service, could benefit by learning from XM's early mistakes, Panero
replied, 'Sirius should look at their own mistakes before looking at ours. There
is a first-to-market advantage that we are taking advantage of

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