WorldSpace Bets On Government Market Growth

By | June 16, 2003 | Feature

Washington, D.C.-based WorldSpace Corp. is looking to the U.S. government in an effort to kick start its sagging satellite radio service to developing nations.

WorldSpace launched its government sales unit late last month to meet growing satellite demands by the U.S. government spurred by home land security and international conflict, Noah Samara, WorldSpace’s chairman and CEO, told SATELLITE NEWS during an interview last week.

“WorldSpace’s service is unique because it offers the lowest cost access to the user for an orbital spectrum resource,” Samara said.

That cost advantage may have helped WorldSpace win its first government services contract. The multi-million dollar award from the U.S. Agency for International Development (USAID) is aimed at providing educational help in Pakistan.

WorldSpace also is eyeing contracts from foreign governments. With a multiple satellite system serving Africa, the Middle East, Asia and parts of Europe, WorldSpace can leverage its satellite assets and spectrum licenses to serve government agencies needing communications coverage in areas not served by terrestrial networks, Samara said.

Using a subscription-based business model, WorldSpace’s government sales unit will focus on delivering products and services based on the specific communication requirements and procedures of government agencies and contractors.

With the capability of providing satellite services to emerging markets in the Middle East and Asia, the next logical step for WorldSpace is to make these services available to the government market, Samara said.

“WorldSpace is able to provide … audio and datacasting services to agencies looking to increase their communication abilities in areas that have little or no telecommunications infrastructure,” said Wilson Baker Jr., vice president of the government sales unit.

Interest among government agencies in such services could lead to additional contracts, said Roger Rusch, president of the TelAstra satellite consultancy.

Some segments of the U.S. government have been interested in using radio-broadcasting satellites for transmitting digital data, he noted.

New Business Model

The company’s inability to amass users quickly enough to turn a profit from advertising revenues has spurred the shift to a subscription-based business model.

Now, WorldSpace is attempting to convince people who bought radio receivers when the company provided free signals to begin paying for the service. The monthly subscription fees range from $2 to $20, depending on what the subscriber wants, Samara said.

WorldSpace is also looking to expand geographically by offering a satellite radio service in the more lucrative European market beginning in 2006. That service, being offered in conjuction with Alcatel Space, would be provided by WorldSpace’s existing AfriStar satellite deployed to serve Africa and the Middle East. The company also has a second satellite, AsiaStar, that serves India, China and other parts of the Pacific Rim.

–Paul Dykewicz

(Noah Samara, WorldSpace, 202/969-6269; Roger Rusch, TelAstra, 310/373-1925)

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