Jacinto Palacios, the new CEO of Ondas Media, believes his experiences at Hispasat and other technology companies provides him with the tools to lead Ondas through the challenge of launching a European satellite radio provider.

"I started Matra in Spain with 60,000 euros ($80,500), and five years later the company was billing 60 million euros ($80.6 million)," Palacios said. "That was a high technology company which sold the two first Hispasat satellites to the Spanish government. We started the company from scratch. The company was successful after six to seven years without any problems. When I came to Hispasat, it was a little local company, which I helped develop internationally, mainly in Latin America."

Ondas plans to launch a satellite radio service that will provide about 150 channels of music and entertainment in Europe in 2009.

In January, Ondas was registered as an operator by the Spanish National Regulatory Authority, Comision del Mercado de las Telecomunicaciones, authorizing the company to provide satellite radio broadcast services from Spain to the whole of the European Union.

"The Spanish regulatory authorities will follow the procedures of the [International Telecommunications Union] step by step and will support Ondas as they do for any Spanish and European company," Palacios said. "As you know the procedure is long but I do not feel concerned by this point. We need only perseverance and credibility, and I believe we have both."

But the effort will be worth it based on the perceived growth opportunity for satellite radio in Europe, Palacios said. "The research done by Ondas shows that 80 percent of people traveling in car would like to have high quality digital radio in their own language throughout Europe," he said. "There are a lot of people today traveling across Europe from country to country. Around 3 percent of the European population does not live in the country they were born. With the new members of the European community there is a big part of the population that would like to have these kinds of services. The radio is not so bad in Europe, however when you leave one country or the principal centers, you lose the tuning. This product will be well received people. There are more than 7 million trucks going across Europe every day. So, there is extra mobility among people."

While Palacios brings a strong knowledge of how to work with Spanish authorities, but will have to work with many more European governments and content providers to make Ondas a success.

"This is a big European project," he said. "Today, we are in Spain, but this company will be present in Western Europe. You need all the contents, and the capabilities of producing different content in different languages, so Ondas will have to develop as an international European company, even though the initial steps are in Spain. This will only be done with the complicity of the Spanish authorities and the support of all the telecoms organizations in each European country. I guess I can bring a lot of credibility in Spain, as well as in Europe."

Palacios also believes that his familiarity with the European satellite industry will help assuage any fears that potential investors may have about Ondas.

"I think that the need of Ondas, which is starting to be well-known all over Europe, is to achieve the trust of a certain number of potential investors, which are waiting for the new kickoff," he said. "I feel quite comfortable that investors will be comfortable with me, as well as customers, the people within the company, etc. I am sure we will be able to put together strong agreements to make the company successful."

While Ondas is focusing on Europe, there are lessons to be learned by its satellite radio predecessors in the United States — Sirius Satellite Radio and XM Satellite Radio.

"What we have learned from the U.S. is that any project that involves satellite in the first phase involves investment," Palacios said. "You have to be sure to allow the investors to be set up. You need a certain number of regulations and licenses. I know how to do this. We have learned from the U.S. experience that you have to be very fast here. We can’t lose time in terms of going to market. If not, maybe people or the users can look at other technologies to fulfill their needs. So we have to move quickly and take these experiences of XM and Sirius as a mirror, which we need to look in every day, in order to avoid any errors they have done and take from them the best things they have done."

However, Palacios believes Europe could prove a bigger market for satellite radio and multimedia services than the United States. "In the U.S., this market is more uniform, more standard," he said. "In Europe, there are many languages. There will be hybrid cultures, which means there will be a mix of European and local content. I expect the growth of the European market will be bigger than in the U.S. once the system has started and once the first services start to be given to the users."

But Ondas also faces competition, as WorldSpace Inc. has received approval from the Italian Ministry of Communications to launch service in Italy. WorldSpace expects to begin broadcasting in the country in 2007 using a terrestrial repeater network to augment service from its Afristar satellite.

WorldSpace has said it expects to add 4 million to 5 million new subscribers in Italy and has partnered with New Satellite Radio, an Italian company primarily owned by Class Editori SpA, to launch the service. The companies hope to further expand on their expected subscriber base in Italy by tapping into the country’s automobile manufacturing industry.

WorldSpace also is seeking authorizations to launch its service in other countries across Europe.

Mark Holmes