dishtv investor presentation sept 092048073719

8/8/2019 DishTV Investor Presentation Sept 092048073719

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DISH TV INDIA LIMITEDCorporate Presentation


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DTH Industry Overview


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4

Pay-TV market on a growth trajectory

India TV industry and DTH overview

0% 0 % 1%3%

9%

13 %17%

20%2 2%

2 4%

55%59%

61%64 % 64% 6 4%

64% 64% 6 3% 63 %

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

2004 2005 2006 2007 2008 2009p 201 0p 201 1p 2012p 2013p

% D TH HH to TV H H % C a ble HH to TV H HSource: MPA report 2009

Source: MPA report 2009

Increasing TV Penetration

DTH gaining foothold in TV HHs Share in incremental Pay TV HH added


India is a large TV market - 129 mm HH in 2008 and expected to grow at a CAGR of 3.4% (2008-13p)

Pay-TV penetration at 73% of TV HH of which only 14% are Digital HH (2008)

Analog is highly fragmented and with limited ability to finance digitization

DTH expected to garner 60% market share of new Pay-TV HH over next 5 years as per MPA 2009 estimate

99% 96%89%

67%

28% 26%18%

9%-5%

-17%

9%

27%

60% 62%

63%

62%

63% 61%

4%1%56%

43%29%19%

11%12%7%2%

-20%

0%

20%

40%

60%

80%

100%

2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p

%s

hareofincrementalsubscribers

% Analog Cable TV % DTH % Digital + IPTV

5765

72

82

94

105

115

124131

137

56%

59%

62%

67%

73%

77%

81%84%

86%88%

-

25

50

75

100

125

150

175

2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p

20%

30%

40%

50%

60%

70%

80%

90%

100%

A nalog Cable TV DTH Digital + IP TV Pay-TV as a % o f To tal TV HH

129136 142

148 152 155

106105

104103

10096

209215

220225 229 233

236 239241 243

103 110116 122

888991

9464%

63%62%60%

59%

56%54%

53%51%

49%

50

75

100

125

150

175

200

225

250

2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p

NoofHouseholdsinMM

40%

45%

50%

55%

60%

65%

70%

TV HH Non-TV HH TV as of % of Total HH



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5

0 01

4

11

18

24

29

34

38

0

10

20

30

40

50

2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p

No.ofhouseholdsinmm

0%

5%

10 %

15 %

20 %

25 %

30 %

35 %

40 %

45 %

2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p

% DTH HH to Tota l HH % DTH HH to TV HH

DTH % of Cable HH DTH % of P ay TV HH

DTH exponential market growth

DTH leading the nation wide

digitization wave

DTH HH increased from 1 mm in 2006

to 11 mm in 2008(Source: MPA 2009)

Increased DTH penetration will drive

continuous growth of DTH HH



Rapidly growing - DTH Subscriber base

DTH % of HHs Increasing penetration

CAGR:

20.7%

(200

9p-13p

)

Increased competition fueling high

growth

High end audio-video quality leading

to increased penetration

DTH as a % of TV HH is expected toincrease to 24% by 2013 (Source: MPA

2009)


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Key industry milestones

-

2

4

6

8

10

12

Apr-05

Aug-05

Dec-05

Apr-06

Aug-06

Dec-06

Apr-07

Aug-07

Dec-07

Apr-08

Aug-08

Dec-08

Dish TV (mn) DTH HH (mn)

Launch of DTH

Services by Dish TV

in select markets

Launch of DTH

Services by Dish TV

in select markets

Launch of DTH

Services by Dish TV

in select markets

Launch of DTH

services by Tatasky

Launch of DTH

services by Tatasky

Dispute over

content settled

between Dish &

Star

Dispute over

content settled

between Dish &

Star

DTH subs breach

the 2 mn mark

between 2 players

DTH subs breach

the 2 mn mark

between 2 players

Dispute over

content with Sun TV

settled

Dispute over

content with Sun TV

settled

DTH subscribe

base at ~10 mnsubs

DTH subscribe

base at ~10 mnsubs

Launch of DTH

operations by

Sun Direct

Launch of DTH

operations by

Sun Direct

Voluntary Digitization

of Cable players

started to launch

digital cable services

Voluntary Digitization

of Cable players

started to launch

digital cable services

Trigger on

Digitization CAS made

mandatory in select

parts of metros

Trigger on

Digitization CAS made

mandatory in select

parts of metros

Launch of DTH

operations by

Reliance

Launch of DTH

operations by

Reliance

Launch of DTH

operations by

Airtel

Launch of DTH

operations by

Airtel

Subscribers in mm

Source: Dish TV


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Current DTH landscape

Source: MPA report 2009 ; 2: Dish TV estimates

Company

Group Zee Group Tatas Sun TV Reliance ADAG Bharti

Launch Date2 Oct 03 Aug 06 Jan 08 Aug 08 Oct 08

Subscribers Dec 081 4.5 3.2 2.3 1.1 NA

Ownership2 Public Private Private Division of R.com Division of Bharti

Technology2 MPEG2 S1 MPEG2 S1 MPEG4 S1 MPEG4 S1 MPEG4 S2

Geographical Spread2 ***** *** ** ** *

Distributors2 ***** *** ** **** *

Pricing Strategy2 ***** ***** *** ***** *****

Channels tie ups1 225 200 170 200 1502

Services2 40 19 29 54 32


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Industry -Key regulations

Licensingregulations

Total Foreign investment limit of 49% with a sub limit of maximum 20% for Foreign Direct Investment

Uplink centre in India

Set-top boxes have to be BIS compliant

License Fee at 10% of subscription revenues (Proposed for 6% under approval)

Initial license validity of 10 years; renewable there after

Inter ConnectRegulation

Content providers have to provide content to all broadcasters; Pricing flexible

Prohibits broadcasters from guaranteeing minimum number of subscribers

Quality of ServiceRegulation

Subscriber to be offered STBs on Rental / Hire purchase / Sale

Mechanism to handle customer complaints & grievances

Reference Interconnectoffers

Pricing information on content of the broadcaster

Max 50% of Non CAS Cable Rates

A-la-carte offering to be allowed


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DISH Market leader in DTH


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10

Company Business

Market cap

(US$m)

Revenues

(US$m)

Dish TV (73%) Indias largest Direct to home satellite distribution company 888 153

Zee EntertainmentEnterprise Ltd (42%)

22 entertainment channels covering genres GEC, Movies, Sports, Music,

Religious, Comedy, Lifestyle1,575 453

Zee News Ltd (54%) 11 channels covering genres news, business, and regional GECs 204 106

Wire & Wireless IndiaLtd (49%)

Indias largest Cable distribution company 87 57

ETC Networks (71%) Music and regional channels, education business 23 14

Dish TV From Indias largest media conglomerate

Note: The % figures in bracket indicate shareholding by Mr Subhash Chandra & family; M.Cap as of July 30, 09 ; Revenues as per audited statements of FY 2009;

Source: Dish TV

Essel Group


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11

Dish TV - Business model

Up-front subsidy on set top boxes to acquire subscribers

Subscription revenues received in advance as per the chosen plan by subscribers

Other developing revenue streams

Teleport

Movies on demand

A-la carte

Carriage fees

Advertisement

Benefits of economies of scale to accrue moved from variable payment of content cost to a fixed

payment structure

Focus on improving ARPU, reducing churn and subscriber acquisition cost (SAC)


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12

Dish TV Key strengths

Largest channeloffering withdiversified

content

Largest number of channels offered on DTH platform 240 channels & services (Jun09)

ZEE brand name and content backing ==> One of Indias leading media group

Continuous focus on strong regional content in linguistic zones

Leverage in content tie-ups due to a dominant market leadership position

Sales & Distributionnetwork

Pan-India presence through 800 distributors & ~48,000 dealers across 6600 towns as ofJun 09

Network managed by over 200 sales personnel 8 zonal and 9 regional offices (Jun 09)

~600 Dish Shoppees to provide demo product experience to prospective users as of

Jun-09

Incentive of dealers is per STB sold

Advancedinfrastructure

Sufficient capacity to broadcast increasing channels current 9 ku band transponders

Model geared to grow in future adding to transponder capacity and technology

upgrade on cards

Heavy capex investment enables to deliver a high end audio-video quality

Market Leadership

Perceived as the industry pioneer with largest subscriber base

Carried and distributed by majority third party distributors and dealers

Strong Branding with consumers


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13

Dish TV Strategy

Customeracquisition

strategy

Focused marketing leading to creation of a BRAND SRK campaign

Largest content offering and digital viewing experience

Aligned dealer incentive structure-Higher incentives for subscriber at

higher packs

Competitive pricing, A-la carte offerings and ease of making payments

Distribution and after sales service

Customerretentionstrategy

Promotions and dealer incentives offered on an ongoing basis to retain

customers through innovative packages

Over 350 Dish Care Centers (DCCs) & service franchisees providing

installation and after sale-service as of Mar-09

In-house call centre, operating 24*7 with capacity of up to 800 operators


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15

DISH TV - Competitive position

3.6

11.1

2.7

4.7

75.7%

42.4%

0

2

4

6

8

10

12

Dec-07 Dec-08

0%

10%

20%

30%

40%

50%

60%

70%

80%

%S

hare

Total DTH HH Dish TV HH Dish TV Market Share

Players with large and stable subscriber base to emerge as winners in the longrun..Dish TV well placed being the largest player in the DTH industry

Source: Dish TV Source :Total DTH HH as per MPA report 2009; Dish TV HH Gross Subscribers as per Dish TV

Dish market share on total subscriber baseDish TV Increasing number of subscribers

2.7

3.0

3.4

3.9

4.7

5.1

5.5

5.9

2.2

2.5

2.9

3.4

4.0

4.3

4.6

5.0

2

3

4

5

6

Q3

FY08

Q4

FY08

Q1

FY09

Q2

FY09

Q3

FY09

Q4

FY09

Q1

FY10

Q2

FY10

Gross Subscriber base MM Net Subscriber Base


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Dish TV Financials


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17

Dish TV - Financials

4127

1909

7377

1,000

3,000

5,000

7,000

9,000

FY 07 FY 08 FY 09

INRMM

-1889

-2196

-1885

-53%

-26%

-99%-2500

-2000

-1500

-1000

-500

0

FY 07 FY 08 FY 09

-100%

-80%

-60%

-40%

-20%

0%

Source: Audited financials

Source: Published quarterly results

EBITDA - AnnualRevenues - Annual

Aggressive subscriber acquisition coupled with higher marginsSource: Published quarterly results

Source: Audited financials

CAGR: 56.9%

Revenues - Quarterly EBITDA - Quarterly

1363

1121

1644

1733

1927

2071

2467 2575

1,000

1,600

2,200

2,800

Q3 FY08 Q4 FY08 Q1FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1FY10 Q2 FY10

INR

MM

-642

-538

-667

-874

-390

145

231

449%

-20%

-50%

-41%-39%

-57%

6%

2%

-1000

-750

-500

-250

0

250

Q3 FY08 Q4 FY08 Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10

-100%

-80%

-60%

-40%

-20%

0%

20%


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18

Lower content cost driving higher margins

Source: Company

Contribution margin are steadily improving.. business heading towards EBIDTA break even

363 420 502 646 755 804 867 929 670 881 925

10871024

319

91171

202

234

529 540588

971

80%

61%

54% 54%

46%46%

71% 71%73%

60% 61%

70%

41%39%40%

30%27%

29%29%

20%

59%

39%

0

500

1000

1500

2000

2500

M ar-07 Jun-07 Sep-07 Dec-07 M ar-08 Jun-08 Sep-08 Dec-08 M ar-09 Jun-09 Sep-09

Subsmn

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Content Cost Contribution

Content Cost (% Subs Revenue) Contribution (% Subs Revenue)

454

591704

880

1074 13321407

2012

1517

Dish TV moves

from variable to

fixed price content

cost contracts

16411905


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19

Key business metricsARPU

ARPU under pressure with increased

competition

Rational pricing to prevail as low pricing

not sustainable over long term

Source: Dish TV; ARPU = (Subscription revenue + activation charges) / Avg. subscribers during the period; SAC = Subsidy on STB+80% of marketing exp.+Comm. to dealers

Subscriber acquisition cost

Focus on reducing subsidies Moved to a

model of charging for a bare box andun-bundling of the content fees and the

Set top boxes

142

132

137150

164

142

158

139

100

110

120

130

140

150

160

170

180

Q3 FY08 Q4 FY08 Q1FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1FY10 Q2 FY10

INR

2034

1880

26342601

2832

2505 2487

2635

1,000

1,500

2,000

2,500

3,000

Q3 F Y08 Q4 F Y08 Q1FY09 Q2 F Y09 Q3 F Y09 Q4 F Y09 Q1F Y10 Q2 F Y10

INR


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20

Summary Financials Quarterly

Quarter ended Sep-08 Mar-09 Sep-09

Gross Operating Revenue 1,733 2,071 2,575

Expenditure 2,607 2,027 2,344

EBITDA (874) 44 231

Add: Other Income 10 4

Less: Depreciation 495 644 730

EBIT (1,368) (590) (495)

Less: Financial Exps 171 217 66

PBT (1,539) (807) (562)

Provision for Tax 2 2 0

PAT (1,541) (809) (561)

Operating metrics Jun-08 Mar-09 Sep-09

Subscribers Added (mm) 0.53 0.35 0.41

SAC ( Rs/sub) 2,601 2,505 2635

ARPU ( INR ) 150 131 139

Source: Dish TV Earnings release and published quarterly results; Amounts in INR MM unless other wise mentioned


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21

Investment summary

Large and growing

DTH market

Subscribers expected to grow from c.17m in 2009 to c. 37mm in 2013 (MPA 2009 report)

Competition to fuel growth to the DTH industry currently only 6 players

Pioneer and leader ofDTH services in India

Dish TV is the only player in the listed space in India and has been recognised as a BRAND

First mover advantage ~1 year lead over nearest competitor and ~ 3 year lead over

others

Leader in the DTH industry - largest subscriber base ~ 5.9 mm (Sep-09)

Backed by Zee Group One of Indias leading Media group

Full-servicebusiness model

Basic subscription packs

Value added services

Bandwidth

Teleport services

Large distribution

network

Wide reach to 6,600 towns through 800 distributors and 48,000 dealers (Sep 09)

8 Zonal and 9 regional offices (Sep 09)

Largest channeloffering withdiversified

content

240 channels & Services

Content tie-ups at fixed rates largest subscriber base to provide economies of scale

Advancedinfrastructure

Only player with sufficient capacity to broadcast increasing channels current 9

ku band transponders Model geared to grow in future adding to transponder capacity and technology

upgrade on cards


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Questions?


23/23

Thank you

dishtv investor presentation sept 092048073719

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