Sirius is Looking to the Internet to Go International
Sirius XM Radio (NASDAQ:SIRI) has been criticized for its lack of international expansion as the company and its service are, for the most part, focused in the U.S. and Canada. Chief Executive Officer Jim Meyer said at the Goldman Sachs Communacopia conference on Thursday that the company’s international expansion efforts will focus more on Internet-based products than satellite, and the company will likely look to Mexico first for that growth, according to a report from Reuters.
Both the company’s board of directors and John Malone, chairman of Liberty Global (NASDAQ:LBTYA), which owns a controlling stake in Sirius, have complained about the company’s lack of international expansion. Meyer, who has lead the company for less than a year, is pushing Sirius outside just satellite radio towards investing more in connected car systems.
“One of the reasons why it’s key that we participate in that rollout and building of that architecture is that it’s going to give us opportunities to look at services on an international basis that are different than we’ve done here in the U.S.,” Meyer said.
Meyer also said that international efforts will likely focus on streaming and Internet-based services rather than satellite radio, and that it’s unlikely the company would launch satellites in other countries. Although Meyer said Mexico would probably be the first target of that expansion, he said there wasn’t anything to announce quite yet.
Meyer was the brains behind Sirius’s first big acquisition earlier this year. The company announced that it is buying Agero Inc. for $530 million back in August. Agero is a connected vehicle system and provider of telematics for cars. Through the acquisition, Sirius will provide telematics services to more vehicles than any other company. Agero counts automakers Acura, BMW (BMW.PK), Honda (NYSE:HMC), Hyundai (HYU.PK), Infiniti, Lexus, Nissan (NSANY.PK), and Toyota (NYSE:TM) as customers. That deal is expected to close in the fourth quarter, according to Reuters.
Connected car systems that allow drivers to connect a computer in their car to the Internet and allow it to interact with their smartphone devices is seen as the future of automobile technology. Since Sirius is already used in many vehicles, scooping up a telematics company was a smart move that will diversify the company outside just satellite radio and move its business outside just the U.S.
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