In 1895, the Italian inventor Guglielmo Marconi was tweaking with an assembly of valves and brought to life the first glimmering of radio communication. The radio was the mainstay of the wars, and even now the largest electronic medium in the third world countries. But Marconi’s effort since then has been outdone by satellite radio today. What was a scrunched up piece of voice signal then is more than music today.

Satellite radio with near CD quality is wiping out radio, tape recorders, and even compact discs for that matter, out of the consumer mind. Today’s digital radio is a breakthrough in technology like radio was to pre World War II nations. As the market forecast goes, “digital radio will take on into every household and both satellite and terrestrial, will grow to over 19 million unit shipments by 2007” says Michelle Abraham of Instat/MDR research firm.

Satellite Radio: Directly from heaven
Noah Samara, an Ethiopian-born visionary, saw the coming of high-tech radio long before his peers could. After a long stint with the telecommunication industry, and also a clear understanding of the International Telecommunication Union (ITU) laws, he chalked out plans for his long cherished dreams. The road, as they say, was definitely narrow—bordering on none at all—and long.

Establishing a radio satellite up in the space is quite a challenging task. One has to start with applying for license spectrum within the allocated band of frequencies for Digital Audio Broadcasting (DAB), which, in most parts of the world is in the 1452 – 1492 MHz L-Band frequencies. For this a satellite system has to be sponsored by a government. Where a geo-stationary orbit satellite is being proposed for DAB service, the applicant has to also coordinate with others using those frequencies or are covering the same areas as the applicant.

The next step is finding the money to pay for the development of the technology for transmitting from the satellite and chipsets for receivers, the actual construction of the satellite—which takes several years—and the final launch. After all this is accomplished, there is the task of rolling out services in a covered market, just like what a cellular service does; with all the costs, time and implementation issues associated with that.

Signals transmitted from these satellites might be of immaculate clarity but what count the most are the receivers. Every receiver is equipped with a chip set, which primarily does the reassembling of digital signals, stores them, and decodes them into the crystal timbers you finally hear. The crucial hitches in signal transmission is at mountainous and high-density urban areas with skyscrapers; to avoid this non-availability of strong signals there are terrestrial repeaters—a gadget that takes in the signals from the satellites and boosts the signals, and retransmits them terrestrially.

Ruling Radios
WorldSpace Satellite Radio was the actual initiator of the digital radio globally. XM radio of America that holds the credit of first in starting satellite radio was a part of WorldSpace Corporation till 1999. XM, funded and founded by WorldSpace, served the American market while WorldSpace grappled with other locations in the world, sharing the same waves of WorldSpace’s satellites.

A competitor to XM in America is the Sirius radio. Sirius is running the radio race aggressively providing 100 plus twenty channels at $12.95 monthly, that is $2.96 more than XM. It is the only player in the market offering big slews of channels, but its subscriber base lags far behind XM’s. Both these digital radios work on S-band frequencies and their near-CD quality as well as the coverage capacity has taken it from houses to cars, boats to government offices as well.

In Europe it was the digital radio service provider Global Radio, implementing the L-band frequency to serve the market even more diverse than the U.S. But the Luxembourg-based Global Radio has had serious financial hiccups and is reigning under loss.

WorldSpace’s main focus point since 1990 has been the African, Asian and the European market. It’s hoping to make it big in India, China and the Middle East, the entry into which has been smooth. But its strategy of subscription is been a wait-and-watch cliché. “We believe the potential for satellite radio is huge in these markets. We are implementing a subscriber-based business model and our vision is to have satellite radio in every household,” says Sridhar Ganesan, WorldSpace’s Senior Vice President. Currently WorldSpace is rolling out its services in a phased manner.

Can WorldSpace make Space?
“In this run on for satellite radio, WorldSpace enjoys several advantages,” says Ganesan. Firstly, it is the only player in its sphere that has implemented a worldwide business model, so the first mover advantage is always there. Then, it has already built its technology, launched its satellites and is using the spectrum that has been allocated to it for providing services. Thirdly, there is no scope for competitors in the near future, as the regulatory formalities involved in setting up of new satellite radio platform will take anybody another 5-6 years.

In terms of already established radio channels competing with WorldSpace, it is quite hard or not achievable in the near future. For one, to compete with it on a worldwide basis there needs to be a L-band frequency that the major players like XM and Sirius don’t have. Secondly, given that Global Radio is not able to implement even in Europe, we don’t expect a serious competition from that company on a global basis,” says Ganesan. Finally, whoever manages to seep into WorldSpace’s air-dom needs to coordinate with each other in every sense.

WorldSpace’s gizmo market is wide and big. The gadget makers of the industries are all here—some indigenous and some imported. For instance BPL in India, JVC and Hitachi of Japan and so on are all indigenous gadget makers for their respective countries. By bringing local manufacturers to the forefront, WorldSpace has actually reduced the receivers’ costs in these countries that would otherwise be unaffordable. Some receivers are stand-alone and some with inbuilt cassette, AM, FM and CD players.

Data transmission through the radio is another in a long list of cool features—connecting it to a computer enables downloads at 128kbps. WorldSpace has also extended its scope to fit in government services; and sees a huge potential for radio in the rural sectors in India and Africa.

World Inside this Space
Digital radio has come a long way—a very long way—from its ancestors, the AM and the FM. Its thirty-odd CD quality channels are serving different music for different minds. There is a clear adaptation theory perceived in the WorldSpace Business and content model. Anchor channels like the BBC, Reuters, Bloomberg, and the talk shows have all come under agreements with WorldSpace, but for WorldSpace the challenge is to bring in channels from the native languages.

In countries like India with a billion population, satisfying all segments is a hard deal. Today, WorldSpace broadcasts Tamil and Malayalam channels along with the existing Hindi and “Hing-lish”—Hindi and English—channels. African language service in Swahili and the Thailand radio service in Thai language are all on the list.

“Music is now a medium of continuum,” says an analyst. “You pick up from where you left off in the car.” The satellite radio industry is coming of age.

Time for the next wave?