WorldSpace Loss Grows

WorldSpace Satellite Radio reported a net loss for the second quarter of 2006 of $36.7 million, compared with a net loss of $22 million, for the second quarter of 2005. Its revenues for the quarter were approximately $3.8 million, representing a 61% increase compared with revenues of approximately $2.3 million for the second quarter of 2005.
The company added 6,528 net subscribers during the second quarter of 2006, ending the quarter with 159,965 subscribers. In India, the company added 7,774 net subscribers during the second quarter of 2006, ending the quarter with 119,497 subscribers there.
Subscriber Acquisition Costs held steady at $41 in Q2, essentially unchanged from the previous quarter.
WorldSpace Chairman/CEO Noah Samara stated, “Gross subscriber adds in our primary target market of India of 35,130 were negatively affected by delays in the launching of a new marketing campaign centered around our new brand ambassador until July, delays in opening more experiential locations, changes in sale channel incentives and ineffective communication of pricing plan changes. These issues negatively affecting the second quarter subscriber counts have been identified and are being addressed.”
The company also reported a high churn rate in India, with renewals running between 60 to 67% overall. It wants to get that figure down to 20 to 25%. It cited short-term pre-paid package promotions for the high churn.