XM Satellite Radio Holdings Inc. on Friday reported a big boost in the number of new subscribers to its digital-radio network in the first quarter.

The Washington, D.C., company said it added 540,000 net subscribers in the quarter ended March 31, compared with 321,675 during the same period a year. The company's total number of subscribers is now 3.77 million.

"This was the best first quarter in the history of XM," Hugh Panero, president and chief executive of XM, said in a statement.

In March, XM, which offers more than 150 channels of special programming, music, news, weather and sports, announced that it had signed a deal to have its satellite-radio service factory-installed in all Hyundai models by 2007.

XM and rival Sirius Satellite Radio Inc. have been spending heavily on programming and sales and marketing in order to attract subscribers to a relatively new market. Both companies reported losses in the fourth quarter ended Dec. 31, but increases in their number of subscribers.

Sirius ended 2004 with 1.14 million subscribers, and XM Satellite with 3.2 million.

As examples of the big money the companies have spent on programming, XM signed an 11-year, $650 million deal to broadcast Major League Baseball games beginning with the 2005 season. Sirius signed a five-year, $500 million contract with shock jock Howard Stern, who is scheduled to move his popular morning talk show to the radio network in early 2006.