XM gets static over outage

Subscribers gripe, but Street shrugs

XM Satellite Radio said Tuesday that it has corrected a problem that disrupted service to an unspecified number of customers nationwide.

XM blamed the 24-hour outage that began Monday on a software glitch that "resulted in a temporary loss of signal from one of the company's satellites."

The company would not say how many of its more than 8 million subscribers were affected.

While angry consumers had their say in Internet chat rooms — some complaining of lengthy phone calls to XM customer-service representatives — Wall Street mostly shrugged off the incident. XM's stock, which has been on a long slide since the company agreed to merge with Sirius Satellite Radio, rose Monday and Tuesday.

"We imagine that the company's call centers are being overloaded," said Wedbush Morgan Securities analyst William Kidd, adding that "this type of service disruption is a natural concern."

While some observers warned that XM might see an increase in churn because of the service interruption, others said the company fixed it quickly enough to dissuade defections.

Kidd maintained his $14 price target on XM shares, which closed Tuesday at $11.16.

Separately this week, XM launched a new channel it calls POTUS 08 that will broadcast to all XM receivers regardless of whether owners have purchased a subscription to XM's service.

The channel, named for the acronym for President of the United States, was created with C-SPAN and other media outlets and aims to deliver nonpartisan news about the 2008 presidential candidates.
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