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A veritable technological and financial gamble, satellite radio has
found the road to success in the United States. Several millions of
motorists are agreeing to pay a monthly subscription to enjoy perfect
FM radio reception and exclusive programmes wherever they may be.
Plans for Europe are in the pipeline.

It is clear that American operators and some auto parts
manufacturers, including Delphi, dream of replicating this success
story in Europe. Also amongst the candidates is the company
Worldspace, which already offers satellite radio programmes in
Europe, Africa, the Middle East and Asia.

The context is, however, a little different. Unlike America, several
languages are spoken in Europe and FM is well developed throughout
the territory. Moreover, satellite radio is in direct competition with DAB
(Digital Audio Broadcasting), which is notably supported by the
Germans, as well as DRM (Digital Radio Mondiale) which radio
broadcasters including RTL could very soon make widespread.

The future will no doubt see a combination of these technologies,
with a signal received by satellite that could be sent by radio relay to
certain zones (especially in built-up areas). The hardest part though
is getting people to agree to pay to listen to the radio, until now
considered a free and universal service!

Meantime, WorldSpace's AfriSpace subsidiary wants to complete a
partly built satellite to provide digital radio broadcasting in Europe but
is running into opposition from a European start-up claiming it wants
to do the same thing.

Washington-based AfriSpace proposes to launch an Afristar-2 satellite
into the same slot where the current Afristar-1 spacecraft is
operating, at 21 degrees east longitude. From there it would focus on
providing satellite radio coverage in Europe, freeing up Afristar-1 to
focus on coverage of Africa and the Middle East.

Impressed by the success of the two satellite-radio companies in the
United States - Sirius Satellite Radio and XM Satellite Radio, several
European companies in the past five years have sought to finance a
European version for fixed and mobile audiences. To date, none has
progressed beyond the regulatory-filing stage.

AfriSpace, whose WorldSpace parent company is trying to raise $100
million in an initial stock offering, wants to appeal to this market and
has asked the U.S. Federal Communications Commission (FCC) to
approve the launch of Afristar-2 into geostationary orbit.

AfriSpace is labeling the satellite as a replacement for AfriStar-1, but
with a wider coverage area. AfriStar-1 is already able to reach much
of Europe as far north as Britain from its location in geostationary
orbit, 36,000 kilometers above the equator. According to AfriSpace,
the Afristar-2 satellite would be built from a partly completed
spacecraft that has been in storage for several years.

An FCC approval of the AfriSpace request would pose serious
problems for a start-up company called Ondas Spain SL of Madrid,
which is designing a satellite-radio system that would use satellites
in elliptical orbit over Europe. AfriStar-2, according to Ondas officials,
would put the Spanish company out of business.

A satellite in elliptical orbit would permit fuller coverage of northern
latitudes than that provided by a satellite in geostationary orbit.
Under current international satellite-licensing regulations, a
geostationary orbiting satellite has priority over a non-geostationary
orbiting satellite such as what is proposed by Ondas.

The French government also has concerns about Afristar-2. In a
letter the FCC received May 5, the director-general of France's
National Frequencies Agency says Afristar-2 is "likely to be technically
incompatible" with a satellite proposal already registered with
international frequency regulators.

The system in question, called European Satellite Digital Radio, is
being designed by Alcatel Space of Paris -- the prime contractor for
the current WorldSpace satellite and ground system.

Jean-Francois Migeon, Alcatel Space vice president for regulatory
matters, said Alcatel's reservation of satellite-radio frequencies over
Europe with the International Telecommunication Union in Geneva
has been renewed regularly since 1998. He said June 3 that the
reservation gives Alcatel until 2010 to place into service a satellite.

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