WorldSpace(R) Satellite Radio Reports First Quarter 2008 Results
SILVER SPRING, Md.--(BUSINESS WIRE)--May 15, 2008--WorldSpace(R) Satellite Radio (NASDAQ:WRSP), one of the world leaders in satellite-based digital radio services, today announced results for the first quarter ended March 31, 2008. The Company ended the quarter with 171,470 subscribers worldwide, a loss of 2,696 from the close of the prior quarter, reflecting the planned cessation of marketing efforts in India and other parts of the world ahead of the company's efforts to commence mobile service in Europe in 2009. In India, the Company lost 1,049 net subscribers during the first quarter of 2008, reflecting continued reduction in marketing in that region. WorldSpace ended the period with 162,026 subscribers in India, compared to 163,075 at the end of the fourth quarter of 2007. Highlights of the first quarter include:
An agreement with Delphi to design the WorldSpace mobile receiver for the European aftermarket based upon a WorldSpace-developed reference design. Delphi was also selected as a lead designer for the Company's European OEM receiver and reception system applications that will also be based on WorldSpace's reference designs.
The receipt of approval from Switzerland's Office Federal de la Communication to operate terrestrial repeaters that will work in conjunction with its existing satellite network to provide Swiss consumers with a subscription-based satellite radio service in three languages, starting sometime in 2009.
Following the end of the quarter, WorldSpace Europe, a wholly-owned subsidiary, received approval from Germany's Federal Network Agency, the Bundesnetzagentur, for the operation of a terrestrial repeater network in Germany. The repeaters will work in conjunction with WorldSpace's existing satellite network to provide German consumers with a subscription-based satellite radio service in automobiles, again starting sometime in 2009. Germany, with the largest automobile market in Europe, is the third European country to approve WorldSpace service; additional countries are expected to do the same before the end of the year.
In December, WorldSpace secured a financing facility for up to $40 million of subordinated financing from Yenura Pte. Ltd., a company controlled by Noah Samara, chairman and CEO of WorldSpace. While the facility was intended to support the Company's focused activities as it continued urgently to seek additional financing (including financing to address near term debt obligations), the realization of these business objectives has been limited by the continued slow availability of funds from the facility.
WorldSpace Chairman and CEO Noah Samara stated, "I am pleased with the accelerated progress we are making in Europe and believe these achievements are adding substantial value for our shareholders. But, I am concerned about the Company's cash position and its pending and near term payment obligations, including those to our debt holders. We are working very hard to solve this liquidity issue and will announce something as soon as we have a commitment.
"Our goals for 2008 are unchanged: in addition to resolving our financial situation, we continue to focus on plans to launch an Italian business and secure licenses and approvals in additional countries in Europe and India," Samara added. "Our operational focus is on Europe in general and Italy in particular. We continue to reduce our spending in India, pending the attainment of the license for repeaters and a local equity partner relationship."
Subscriber Growth
Gross subscriber adds of 15,637 in India were down from 18,226 in the fourth quarter of 2007. Net subscriber losses in India were slightly lower than net losses of 1,827 in the fourth quarter of 2007, as the Company continues to work towards stabilizing its subscriber base, while awaiting approval of its terrestrial offering in the country along with finalization of potential partnership agreements.
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