WorldSpace to invest $150 million in India

WorldSpace to invest $150 million in India
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First Published: Tue, Apr 17 2007. 12 12 AM IST
Updated: Tue, Apr 17 2007. 12 12 AM IST
WorldSpace India Pvt Ltd, the Indian subsidiary of satellite-radio firm WorldSpace Inc., plans to invest $150 million (Rs630 crore) of the $250 million its parent raised in a 2005 initial public offering on Nasdaq to build its business in the country. The company serves 1,70,000 customers in India (out of a total of 2,00,000 across Asia and South Africa).
The money, which will be spent over the next two years, will go into investments in infrastructure, marketing, distribution and technology upgradation, according to Harshad Jain, chief marketing officer, WorldSpace India.
Part of the money will go into an advertising campaign featuring the company’s brand ambassador A.R. Rahman, a popular music composer.
“India is the most important market for us, and the new thrust on marketing and advertising is to strike a better connect with our existing and prospective consumers,” said Jain.
WorldSpace, the only satellite-radio operator in India, hasn’t had it easy. It has been unsuccessfully lobbying the government to allow it to enter the mobile-satellite radio space that would allow it to tap the segment of consumers who largely listen to radio in their cars. WorldSpace’s subscription-based service still has its takers because it was different, said Jain. “Unlike FM channels, we provide a plethora of choice to consumers, including Indian classical to English classical, hip-hop, rock, old film classics to contemporary music. We don’t carry any ads, so as to give our consumers an absolute clutter-free music experience,” he added.
Jain is convinced that if the company is permitted to offer mobile-satellite radio services, most people who listen to the radio while commuting would shift to WorldSpace. “We are still awaiting approvals,” he said. WorldSpace shares were trading at $3.57 on Nasdaq on 15 April. The company reported revenues of $15.6 million in 2006, a 34% increase over 2005. But its net losses also increased to $129 million from $80 million in 2005.
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First Published: Tue, Apr 17 2007. 12 12 AM IST
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