WORLDSPACE Satellite Radio, one of the world leaders in satellite-based digital radio services, today announced results for the third quarter of 2007 ended September 30, 2007. The Company ended the quarter with 177,644 subscribers worldwide, a loss of 12,689 from the close of the prior quarter, reflecting loss of subscribers in India and the planned cessation of marketing efforts in Europe ahead of the company’s efforts to test and subsequently commence mobile service in Europe. In India, the Company lost 8,713 net subscribers during the third quarter of 2007, reflecting reduced marketing in that region, ending the period with 164,902 subscribers in India, 19% higher than at the end of the third quarter of 2006.
As previously announced, WorldSpace and Fiat Group Automobiles signed a first ever distribution and marketing agreement for satellite radio in Europe. WorldSpace expects that, beginning in late 2008, it will offer customers in Italy, through aftermarket equipment installations available through Fiat’s vast dealership network and other outlets, a mobile satellite radio service with 40-50 channels of music, sports, news and entertainment programming. OEM or factory-installed equipment for Lancia, Fiat and Alfa Romeo models is expected to be available in late 2009. During the quarter, in order to shore up its liquidity, WorldSpace has been engaged in discussions with a variety of potential investors and partners, strategic and financial, about equity and debt financings. The Company hopes to conclude a transaction in the next few months.
WorldSpace Chairman and CEO Noah Samara stated, “We are very pleased with our continuing progress in Italy, as we have now lined up the right partners to make this launch successful, between Fiat, Telecom Italia and Fraunhofer for receiver development. We see great opportunities in this market for a robust mobile service offering, and are confident that, with our partners, we can devise a strategic course to implement our strategy and acquire the financial resources to support it.
“In India, we are operating on a restrained basis,” Samara said. “We are postponing marketing spending until we secure a repeater license that will enable us to provide seamless service to automobiles. We will then be in a position to leverage our streamlined presence in India to launch a successful mobile service there. Over all, we remain confident in the long-term viability and opportunities that our business represents and are encouraged by our initial discussions with a series of potential investors about additional financing.”
For the third quarter of 2007, WorldSpace reported revenues of approximately $3.3 million, roughly flat with revenues of approximately $3.3 million for the third quarter of 2006. Subscription revenue was approximately $1.9 million for the third quarter of 2007, up slightly from approximately $1.8 million in the third quarter of 2006. On a sequential basis, subscription revenues in the third quarter of 2007 were flat with the approximately $1.9 million recorded in the second quarter of 2007.