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Disclaimer
Some of the statements made in this presentation are forward-looking statements and are based on the current beliefs, assumptions, expectations, estimates, objectives and projections of the directors and management of Dish TV India Limited about its business and the industry and markets in which it operates. These forward-looking statements include, without limitation, statements relating to revenues and earnings. Th words d i The d believe, anticipate, expect, estimate,intend, project and similar expressions are also intended to identify forward looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the Company and are difficult to predict. Consequently, actual results could differ materially from those expressed or forecast in the forward-looking statements as a result of, among forward looking of other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks. Dish TV India Limited does not undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication.
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About us
Indias pioneer and Asia Pacifics largest* DTH company. Consistent market leader with 31% absolute share currently. Promoted and led by Subhash Chandra, Chairman, Essel Group. A th G thought l d ht leader and pioneer in most of his businesses.
Consistent Leader
Having diverse presence across media, packaging, entertainme nt, technology enabled services, infrastructure , development & education.
Indias first & largest, fully integrated, media & entertainment company. p y
Journey so far
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DTH SUBS BREACH THE 2MN MARK IN A 2 PLAYER MKT. DISPUTE OVER CONTENT . SETTLEMENT BTW DISH & STAR
SUBSCR RIBERS IN MN M
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DIGITIZATION TRIGGRED, CAS MADE MANDATORY IN SELECT PART OF METROS LAUNCH BY SUN DIRECT LAUNCH OF DTH SERVICE BY TATASKY
DISH Subscribers
DTH Subscribers
Opportunities galore!
Key statistics: 2010
300
264 269
242
249
256
89%
90%
91%
2010 2011E 2012E 2013E 2014E 2015E Total HHs C&S HHs TV HHs C&S Penetration
Increasing TV HHs; likely to be 170 million, 64% penetration, by 2015. Developed countries average penetration at more than 97%. China at 98%. C&S penetration: huge opportunity, likely to be 91% by 2015.
DTH to be the key driver & direct beneficiary of increasing C&S households!
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Source: MPA 2010 report
MPA 2010
25% CAGR 2009-13 31 24 17 36 41 45
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45 40 35 30 25 20 15 10 5 0
43
2009
2010
2009
2010p
2011p
2012p
2013p
2014p
% Cable HHs to TV HHs Source: MPA 2010 Cable HHs include analogue & digital cable
Outperformed !!
MPA 2010 Report - DTH subscribers in India to reach 24 mn. by the end of 2010 ! FICCI Frames 2010 -Total number of DTH subscribers to be added in 2010 is expected to be ~ 8 million.
12.1 million* DTH subscribers added taking industry size to 30 6 million! 30.6
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* Source: Dish TV actual & Market Est.
Outperformed !!
DTH industry scale-up 35 30 25 20 15 10 5 0
Subscribers in Mn.
18.4 10.3 10 3
30.6
1.5
4.3
2006
2007
2008
2009
DTH driving digitization & growth in pay-TV HHs. DTH penetration already at 27% of C&S HHs; ahead of estimates. An estimated 58% of all new C&S subscribers up to 2015 expected to opt for a DTH connection.*
With more than 2.5 mn. subscribers being added every quarter, India is poised to 2 5 mn quarter overtake the current leader (U.S), which currently adds ~ 1.5 mn. subscribers each year.
* Source: MPA - APAC Pay TV & Broadband Report 2010
` mn. Subscription Revenue Cable Subscription to Broadcasters 2006 2007 Subscription Income Paid (Digital + Analogue) Less: Carriage & Placement Received Net Subscription Paid DTH Subscription to Broadcasters Net Subscription Paid
19750 5000 14750 1360 23110 6000 17110 3415
2008
27545 12000 15545 7795
2009
30805 13000 17805 13905
2010P
34535 13000 21535 19375
2011P
39305 13300 26005 24925
DTH continues to strengthen its relationship with broadcasters creating a win-win situation for both.
Source: MPA 2009, FICCI 2010 & Mkt. estimates
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Key regulations
Total foreign investment limit of 49% (sub limit ceiling of 20% for FDI) * Uplink centre to be in India Set-top boxes to be BIS compliant License fee at 10% of DTH revenues (favourable TDSAT Order received on 28/05/10 likely to result in license fee outflow at ~ 4%) Initial license validity of 10 years; renewable thereafter
Licensing g
Service quality
Subscribers can be offered STBs on Rent/Hire-Purchase/Sale Mechanism to be in place for handling customer complaints & grievances
Interconnect
Broadcasters have to provide content to all distribution platforms; pricing flexible Prohibits broadcasters from seeking guarantee for minimum number of subscribers
Reference interconnect
Pricing information on content of the broadcaster Maximum 50% of non-CAS cable rates A-la-carte offering to be allowed
* As per TRAIs (Telecom Regulatory Authority of India) recommendation dated 30th June, 2010 to the Ministry of I&B, Foreign Investment
Limit for DTH is to be increased to 74%. The recommendation is yet to be approved.
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Business basics
Direct-to-home distribution of TV channels up-linked from India by Broadcasters. CPE installed on rent at consumers premises. Inertia to pay for hardware equipment results in up-front subsidy on STBs. Negative Working Capital cycle prepaid model. DTH revenue includes subscription and lease rentals. p Alternate revenue streams - Value-added-services, Movie on-demand and Bandwidth charges. Fixed content cost deals with most broadcasters; significant competitive advantage. Growing subscriber base would bring operating leverage into play.
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Key strengths
Brand
Strong Brand presence and Brand recall.
Market Leadership
Largest subscriber base amongst all six players; currently at 31%. Carried and distributed by most third party dealers and distributors.
Content
Highest number; more than 250 channels & services and growing.
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Largest Bouquet
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Maximum HD
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Maximum Regional
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Dish TV now
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17% 19%
9% 17% 7%
31%
Dish TV Big TV
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Consistent leadership
Dish TV Increasing number of subscribers
10 8.3 8 6.9 6.4 6 4.7 4 4 5.1 5.5 4.3 5.9 4.6 5 5.3 53 5.7 6.2 20 15 11.1 10 2 5 0 0 Q3 FY Q4 FY Q1 FY Q2 FY Q3 FY Q4 FY Q FY Q2 FY Q3 FY Q1 Q Q Q 09 09 10 10 10 10 11 11 11 Dec. '07 Dec. '08 Dec. '09 Mar. '10 June '10 Sept. Dec. '10 '10 Total DTH Subscribers Dish TV Subscribers 3.6 4.7 2.7 6.4 64 6.9 7.5 8.3 18.4 42% 35% 33% 33% 32% 31% 9.4 7.5 6.8 7.7 25 20.7 23 50% 40% 30% 20% 10% 0% 35 75% 30 26 30.6
9.4
Players with large and stable subscriber base to emerge as winners in the long run. Dish TV is well placed being the largest player in the DTH industry.
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2477 2383
Focus on reducing subsidies. Aggressive competition at th acquisition A i titi t the i iti front resulted in marginally higher box subsidies.
`
1000 0 Q2 FY 09 F Q3 FY 09 F Q4 FY 09 F Q1 FY 10 F Q2 FY 10 F Q3 FY 10 F Q4 FY 10 F Q1 FY 11 F Q2 FY 11 F Q3 FY 11 F
Source: Company ARPU = (Subscription revenue + activation charges) / Avg. subscribers during the period; SAC = Subsidy on STB+80% of marketing expenses + Commission to dealers
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Silver pack made dormant Price increase in three out of five packs. dormant. packs Constant marketing initiatives to create better value proposition in higher ARPU packs. 24
Financials
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Encouraging performance
O i Revenues - A l Operating R Annual
12000 10000 10848 20% 0% -20% 4127 1909 -40% -60% 80% -80% FY 07 FY 08 FY 09 FY 10 -100% -97% -53%
` Mn
FY 07
FY 08
FY 09
-18.3%
FY 10
13.2%
15.3% 10.6%
17.9%
400
157
255
0 200 -200
Q1 FY 10 Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY 11 Q2 FY 11 Q3 FY 11
-400 -600
-20%
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-3 389
134
42
200
322
498
400
` Mn
667
Content Cost
Contribution
71%
73%
80%
61% 61%
54% 46%
54% 46%
1150 1298
57% 43%
1437
58%
1638
529
540
97 71
1023
588
1086
30%
1862
39%
39%
41%
42%
39%
39%
500 0
502
646
755
319
804
867
929
670
881
925
986
1,001
1,060
1,062
1,229
0%
Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
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Summary financials
Quarter ended Gross operating revenue Expenditure EBITDA Add: Other income Less: Depreciation EBIT Less: Financial expenses PBT Provision for tax PAT Operating Metrics Subscribers added (mn.) SAC (Rs/subscriber) ARPU (INR) Dec '09 March '10 June '10 Sept '10 Dec '10
2775 2659 116 11 779 -652 110 -762 0 -762 762 0.55 2477 135 3032 2683 349 5 846 -492 106 -598 0 -598 598 0.44 2383 138 3043 2721 322 69 889 -498 133 -631 0 -631 631 0.64 2147 139 3261 2763 498 25 843 -320 131 -451 0 -451 451 0.76 2083 139 3732 3065 667 17 902 -218 225 -443 0 -443 443 1.1 2142 142
Dec '09 March '10 June '10 Sept '10 Dec '10
** HITS operations discontinued w e f 1Q FY11 w.e.f. FY11. Source: Company Financials. All figures in ` mn. except mentioned otherwise.
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Way forward
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Continuous focus on: Sustained product Augmenting revenue contribution Expand customer base with focus on leadership 30 through innovative value added services innovation to retain subscribers and expand category Customer care Brand building Technology and Distribution Content enrichment
Thank you
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Questions
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