Yesterday we reported the financial crisis at Washington-based satellite radio operator Worldspace. Unfortunately, there are more challenges ahead for company head Noah Samara (left).
Once our report appeared, Rapid TV News had a flurry of confidential
e-mails from interested parties. One suggested, fairly obviously, that
there was a great deal happening behind the scenes at Worldspace’s
Silver Spring HQ, most focused on how the company’s limited assets can
be exploited in the event of a liquidation or refinancing into new
ownership - or at least new control that wipes away the huge legacy
issues inherited from the Samara days. The largest problem is for “new
Worldspace” to regain trust from Wall Street and the investment
community generally.
“Every angle of WorldSpace’s current strategy appears to be focused on
rolling out an entirely new business in Europe,” said one source, who
questioned whether Samara had also abandoned Worldspace’s other
businesses in Asia and India? What are the residual liabilities there
and how can any new customer trust that he will deliver if he walks
away from those markets?” Unsaid, but hinted at, is that as well as not
paying some salaries, Worldspace is employing a similarly
ultra-cautious approach to paying day-to-day suppliers and their bills.
We are also reminded that almost exactly three years ago Samara and his
team managed to take almost $200m from investors on a business plan –
now seemingly abandoned – to mainly secure subscribers in India and
China. Worldspace did manage to sell subscriptions in India despite not
having a repeater licence, although more recently India’s authorities
have said that a Worldspace-type operation would need major Indian
partners in order to be issued a formal licence. China was the subject
of a considerable interest and effort from Worldspace, without much
governmental success. The $200m raised is now the subject of assorted
Class Action lawsuits alleging lack of transparency by the company’s
officers at the time of the IPO.
To start a new European business, which Worldspace has been focused on
this past year or two, now requires a complete rewrite to include:
content focused on Europeans, car deals that are real and will attract
investment, and a mobile service rather than his current fixed service
(ie satellite power and coverage). In fact, “a complete terrestrial
network which even Craig McCaw for ICO thinks will cost $800M in the
US, how much more for Europe?” asks a reader.
Yesterday we spoke of Worldspace’s “assets”, namely a couple of tired
satellites and a partly-built ground spare. A reader reminds us that
the mothballed AfriStar 2 (the ground spare) is now “quite old
technically” given that it was designed almost 10 years ago, and is now
outmoded in thinking and functionality. Like everything else in this
business, the past 10 years have seen design innovation, on-board
technology improvements and flexibility in terms of transmission
options. One would have to ask the obvious question as to whether there
was any real value for a 2009-2010 operator in AfriStar 2? Are there
elements of its bus which could be speedily adapted and upgraded to
reflect this new thinking, or is it best to be – sadly - junked?
Worldspace might well still pull a survival rabbit out of its hat. It
has done so before. But more than flourishes of press releases it
needs magically to drum up cash – lots of it, if the business is to
survive and achieve a few of its European goals.
One final point. Rapid TV News wants European sat-radio to succeed. We
have talked recently with people like Solaris Mobile, who see radio
playing a part on its upcoming DVB-SH system. There’s Ondas Media and
other would-be players looking to enter the market. We just hope
someone can succeed, and that the water isn’t too muddied by what has
happened this past 10 years since AfriStar 1 was launched in October
1998.
Misrepresentation of facts.How you know or from where of Govt.of India final verdict.Please read TRAI site.You also read media coverage after TRAI final Recommendation on Satellite Radio.
there's not future for satellite radio in Europe. Both companies will fail in the continent. Europe is not America. I feel sorry for the naive investors...
Yesterday we reported the financial crisis at Washington-based satellite radio operator Worldspace. Unfortunately, there are more challenges ahead for company head Noah Samara (left).
