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MUMBAI: Radio satellite service provider Worldspace has reported
its financial and operating results for the fourth quarter and year
ended 31 December, 2005.
It finished the year with 115,306 subscribers. The company added
40,235 subscribers in the fourth quarter of 2005, an increase of
approximately 160 per cent over the 15,545 subscribers added in
fourth quarter of 2004.
In India, the company had 74,574 subscribers at the end of the
fourth quarter of 2005, up over 100 per cent from 35,670 at the
end of the third quarter of 2005 and up nearly 800 per cent from
8,335 at the start of the year.
At the end of the fourth quarter of 2005, WorldSpace had rolled
out its satellite radio services in nine cities in India -- Mumbai,
Delhi, Bangalore, Chennai, Hyderabad, Kochi, Pune, Ahmedabad and
Chandigarh.
Service in Kolkata, India's second largest city, was launched in
February 2006. Worldspace's market distribution is now available
to a population of nearly 63 million, including nearly 35 million
people in the top three economic segments targeted by the company.
Worldspace chairman and CEO Noah Samara says, "Worldspace
made important progress against all of our key operational metrics
during the fourth quarter of 2005, especially in delivering strong
subscriber growth. We believe we have gained significant traction
in our efforts to acquire new subscribers, and will continue to
do so as our visibility and brand awareness grow with the roll-out
of our service to additional metropolitan areas, supported by targeted
marketing campaigns. We also have made great strides in building
our senior management teams, internationally and at the corporate
level, by adding quality people with key areas of expertise that
will be critical to our forward momentum."
The firm introduced 19 new programming channels, including the
first India sports talk radio channel and many regional language
channels in India, as well as the world's first global hip hop channel,
bringing the total number of channels broadcast on WorldSpace's
global system to 220 by the end of the year.
It also completed an initial public offering (IPO) in August 2005,
raising net proceeds of approximately $221 million; It raised strategic
capital from and formed a technology sharing partnership with XM
Satellite Radio in July 2005, including an investment of $25 million
by XM Satellite Radio.
Also, three-year warrants valued at $37.5 million were issued to
XM Satellite Radio exercisable at the IPO price provided XM has
made substantial technological contributions to WorldSpace, including
in the areas of products, chipsets and terrestrial repeater development
and deployment;
The firm continued the expansion of the distribution and geographic
presence in India, with over 650 retail points of presence in nine
cities at the end of the year covering approximately 30 million
people in Worldspace's target market segment of the India population;
It managed to obtain terrestrial repeater licenses in United Arab
Emirates and Bahrain, the first L-band terrestrial repeater licenses
for satellite radio.
Samara adds, "2006 is a pivotal year for WorldSpace.
We are working hard to gain key regulatory approvals for the delivery
of mobile services in certain of our markets, and to increase the
variety of our receivers.
We are moving into more cities in India and we are gaining strength
in other countries where subscribers can be added at little incremental
cost. We started the year well with the FCC's approval of our license
application for our Afristar-2 satellite, which when launched, will
enable us to broaden our offerings in Europe and the Middle East."
For the fourth quarter of 2005, WorldSpace reported quarterly revenues
of approximately $4.4 million, representing a 95 per cent increase
compared with revenues of approximately $2.3 million for the fourth
quarter of 2004. Subscription revenue increased approximately 160
per cent to approximately $1.1 million for the fourth quarter of
2005 compared with subscription revenue of approximately $0.4 million
for the fourth quarter of 2004. On an annual basis, total revenues
for 2005 were $11.7 million in 2005, a 36 per cent increase over
2004 total revenues of $8.6 million. Subscription revenue in 2005
was $3.7 million, a 255 per cent increase over $1.0 million in 2004.
Worldspace recorded a net loss for the fourth quarter 2005 of $33.2
million compared with a net loss of $418.2 million for the fourth
quarter of 2004, a period that included stock compensation expenses
and other costs associated with an inter-company consolidation and
subsequent debt restructuring.
For the year, the company's net loss was $79.9 million compared
to a net loss of $577.4 million in 2004. In the fourth quarter of
2005, WorldSpace spent approximately $9.6 million on sales, marketing
and subscriber acquisition expenses globally, including $8 million
in India compared with $4.9 million and $4.1 million respectively
in the third quarter of 2005.
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