WorldSpace Satellite Radio: Fading Signals?
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Case Code: BSTR239 Case Length: 22 Pages Period: 1990-2006 Pub Date: 2006 Teaching Note: Available |
Price: Rs.400 Organization: WorldSpace Corporation Industry: Media, Entertainment and Gaming Countries: The US, India, Africa Themes: Corporate Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
Noah Samara (Samara), the founder of WorldSpace, was born in Ethiopia, and later migrated to the US for higher education. He founded WorldSpace in 1990 in Washington DC, to provide satellite radio services to the African continent and other third world countries.
In Samara's view, there was a distinct need for information in these developing countries, but many of them lacked the infrastructure to receive and disseminate such information. The stated objective of WorldSpace was to provide news, education, and entertainment along with other useful information to the developing regions of the world (Refer to Exhibit II for a note on satellite radio).
In the early 1990s, Samara participated in the 'World Administrative Radio Frequency Conference' held in Torremolinos in Spain, which diplomats from 127 countries attended. To provide digital audio broadcasting, Samara required 25MHz of the L-band, which was a slice of the 1000MHz electromagnetic spectrum. This spectrum range was used by countries for communication purposes.
After several rounds of negotiations, the International Telecommunication Union agreed to grant Samara the required range in the L-band. Samara also received the US government's approval for the first US Federal Communications Commission (FCC) satellite radio license. The initial investment of $1.1 billion in WorldSpace was made by two Saudi Arabian businessmen, Khalid bin Mahfouz and Mohammad Hussein Al-Amoudi (Al-Amoudi). Together they held an 80% stake in the company. Another businessman, Saleh Idris bought a 6% stake. Alcatel Space, a subsidiary of Alcatel Corporation of France, built the geo-stationary satellites, which were to broadcast WorldSpace signals around the world....
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