WorldSpace Believes India Will Allow Repeaters by Year-End
India is expected to release its satellite radio terrestrial repeater policy this year, allowing WorldSpace to move forward with its plans to offer a mobile satellite radio service, WorldSpace CEO Noah Samara told analysts late Thursday during a Q3 earnings call. WorldSpace lost more than 8,000 subscribers in India Q3 as it significantly reduced its marketing efforts while it awaited clearance to build a repeater network. Recent conversations with Indian regulators led Samara to believe that a policy would be issued by year-end, he said. “A mobile service is contingent on the issuance of a satellite radio policy that will allow terrestrial repeater network,” he said.
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WorldSpace’s mobile strategy is contingent on regulatory authorization for a terrestrial repeater network and on signing one or more partners in each country, Samara said. With India’s decision coming, WorldSpace has started talking with possible partners there, he said. WorldSpace has a deal with Fiat and Telecom Italia to build out a terrestrial repeater network and offer a mobile satellite radio service in Italy. The regulatory landscape in the rest of Europe also has become clearer, Samara said. WorldSpace expects to receive terrestrial repeater authorization for France, the U.K. and Spain within a year, he said.
The same amount of spectrum is used to deliver satellite radio in Europe as in the U.S. The challenge in Europe is to provide service in several languages, Samara said. WorldSpace has developed innovative technology to accomplish this and has filed for intellectual property protection, he said. Allowing users to cross borders and keep receiving radio broadcasts in their native languages is a plus for consumers on the continent since other broadcasts stop at the borders, he said.
WorldSpace is also pursuing partners to offer mobile service in Turkey, Samara said. WorldSpace believes Turkey is a fertile market because video services have subscribers in 4 million homes, he said. He also believes that a partner for South Africa may be announced within six months, he said.
WorldSpace is burning through cash quickly and could run out early next year. But Samara was upbeat, saying new financing will be nailed down this year. He told analysts he couldn’t elaborate because the arrangements are in the “due diligence phase,” he said.
WorldSpace finished Q3 with almost 178,000 subscribers worldwide, a drop of about 12,700 from Q2. Third quarter revenue of $3.3 million was flat year to year. Samara said of results that many have seen as poor that “financial reporting tells one side of our story, which is historical in nature.” WorldSpace is bullish on its prospects, executives stressed throughout the call.