Canada's two satellite radio broadcasters say they are reviewing their options after the merger of XM and Sirius in the U.S. became official, but both companies said there would be no immediate impact on service north of the border.

The Federal Communications Commission approved the merger of XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. after the two companies agreed to pay $19.7 million US to settle rules violations. The merger, which will see Sirius buy out XM in a $3.3-billion US deal, brings the two struggling operators of satellite radio services under one roof.

It's unclear how the merger will affect the two companies' Canadian partners, which operate under a separate regulatory structure, though it is sure to intensify speculation that the two groups are headed for a merger of their own. But a merger may be more difficult because the two companies have a more complicated ownership structure.

XM Canada is run by Canadian Satellite Radio Holdings of Toronto in partnership with XM Satellite, while Sirius Canada Inc. is owned by Sirius Satellite, Toronto-based Standard Radio and the CBC.

Both companies issued statements on Monday with XM Canada saying it is "diligently reviewing its options" after the FCC decision.

"XM Canada is in a strong strategic position to maximize any opportunities that arise for the enhanced benefit of our shareholders and customers," said Michael Moskowitz, chief executive of XM Canada.

Sirius Canada Inc. president and CEO Mark Redmond said in a statement Monday the U.S. merger will have "no immediate impact on our business."

"Sirius Canada's more than 750,000 subscribers will continue to receive an unparalleled slate of programming," said Redmond.

Didn't slow new subscribers

Sirius Canada Inc. said it has more than 750,000 paying subscribers, while XM Canada claims more than 400,000 subscribers. Their U.S. parents have 8.3 million and about nine million subscribers, respectively.

The two U.S. companies' merger plans had been in a holding pattern during an FCC approval process that has gone on for more than a year.

That uncertainty hasn't slowed consumers north of the border from signing up for one of the two services. XM Canada reported that for the three months ending May 31, 2008, subscribers increased 58 per cent from the previous year. Sirius said it has added 450,000 subscribers since the merger was first announced in February 2007.

Consumer analyst NPD Group Canada said about 24,000 satellite radio players sold last month. Sales of the players through the first six months of the year have risen by about 17 per cent over the same time period last year. But the increase could also be due to a corresponding drop in price in the radios themselves, from an average of $123 to $94 in the last year.

Critics of the U.S. deal, including the ground-based radio industry and consumer groups, argue the merger would essentially create a monopoly in the satellite radio industry.

But FCC chairman Kevin Martin said the merger would lead to better choice for consumers.

"I think it's going to be, in the end, a good thing for consumers and be in the public interest," said Martin. "Consumers will enjoy a variety of programming at reduced prices and more diversified programming choices."

Sirius and XM voluntarily agreed to a set of conditions, including a three-year price cap and a promise to include a limited "a la carte" offering that would allow listeners to pay only for the channels they want to receive.