International success is something many British businesses struggle to find in such a competitive marketplace - but one export is booming. The BBC World Service has a record weekly global audience of 163 million, up 10 million on the previous high in 2001 - with its 51-year-old director Nigel Chapman planning ambitious satellite TV services targeting Iran and the Middle East.

'I don't have shareholders - but I do need to demonstrate value via the size of audiences and what they think about our output,' Chapman says. 'We use public money (£239m in 2005/2006; £245m in 2006/2007), so there is a tremendous onus to spend it wisely and efficiently on behalf of the taxpayer.

Closing down 10 language services (including Bulgarian, Kazakh and Thai) to help finance an Arabic satellite TV service launching next autumn was part of a change package described by Chapman to staff in October 2005 as 'the biggest transformation of the World Service since the end of the Second World War - and one of the most far-reaching since the BBC began international broadcasting more than 70 years ago'. While Chapman acknowledges the 'contribution' of axed language service staff who continued making 'very good programmes right up until the end', he adds: 'The world had changed and the balance of our priorities had to change with it.'

In particular, he identified the news and information 'needs' of the Middle East and the wider Islamic world as the new priority - reasoning that the end of the Cold War had reduced the need for parts of Eastern Europe for 'impartial and accurate' news from the BBC in their own languages.

But have the closures hit the quality of World Service news coverage - for example, in reporting the coup in Thailand last September? 'I don't think so,' says Chapman. 'We provided detailed coverage as events unfolded, from well-informed correspondents on the spot.'

Managing change is a business skill which Chapman is seen as having applied with text-book efficiency. It was a big challenge: World Service was regarded as 'set in its ways' by many working in the domestic BBC and the wider broadcasting industry. Founded as the BBC Empire Service in 1932 and now based in the imperial-looking Bush House in London's Strand, it was known to most people in Britain only for transmitting programmes to faraway places via the crackle and hiss of short wave.

Enter Chapman as deputy director in 2000, with a reputation for shaking up the BBC 'English Regions'. He stresses that change was already under way at the World Service - but staff say moves toward becoming a tri-media broadcaster (using online, radio and satellite TV) accelerated with his arrival and are now moving 'at warp speed'. Apart from achieving record numbers of radio listeners worldwide from broadcasts in 33 languages including English, World Service online news sites are recording 34.8 million unique users each month - up from 21 million a year ago. In addition, broadcasts via crystal-clear FM radio are now available in 150 capitals to supplement short wave.

Does he feel hamstrung by tight public funding? No additional allocation was made for Arabic TV - its £19m annual budget is coming from internal savings and re-allocation of resources. Will the funding be enough to compete with al-Jazeera, with its generous funding from the emir of Qatar?

'It is enough to broadcast high quality news and information for 12 hours a day,' says Chapman. 'But I'll be asking the government for an extra £6m annually for 24-hour transmission.' Extra funding - £15m a year - was negotiated for the Farsi (Persian) language satellite TV service to Iran, due to launch in 2008.

'There's a very strong broadcasting case for Arabic and Farsi services,' according to Chapman. 'Television is the main medium for news and information for these audiences - and satellite the best means of delivery. '

How does he describe relations with the UK government - his source of funding? 'We discuss the how and the where of our broadcasts,' he says, 'but not the what. We have complete editorial independence as laid down in black and white in our broadcasting agreement."

Chapman is a BBC lifer - he has never worked anywhere else. As for the long-term future of the World Service: 'The need for what it does - supplying the most trusted, relevant and highest quality international news in the world - has never been greater,' he says.

'In a world awash with partisan "news" and rumour, if we didn't exist, something like us would have to be invented.'