Dish TV investor Presentation

Dish TV India Limited
Investor Presentation

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. The words
“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
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.
2

About us
• India’s pioneer DTH service provider; the only listed pure-play DTH company in
the country.
• Consistent market leader with 32% subscriber share currently.
• Part of the:
GROUP
Having diverse presence across media, packaging, entertainment, technology
enabled services, infrastructure development and education.
India’s first and the country’s largest fully integrated media and entertainment
conglomerate.
• Promoted and led by Subhash Chandra, Chairman, Essel group of companies, a
thought leader and a pioneer in most of his businesses.
3

Indian DTH industry
4

SUBSCRIBERS IN MN
Journey so far
25
VOLUNTARY DIGILIZATION
BY CABLE OPERATORS .
DTH SUBS CROSS
20 MN MARK
20
DTH SUBS BREACH THE 2MN
MARK IN A 2 PLAYER MKT.
15
10
5
LAUNCH OF DTH SERVICE
BY DISH TV IN SELECT
MARKETS
DISPUTE OVER CONTENT .
SETTLEMENT BTW DISH & STAR
DIGITIZATION
TRIGGRED,
CAS MADE
MANDATORY IN
SELECT
PART OF METROS
LAUNCH BY
SUN DIRECT
LAUNCH OF
DTH SERVICE
BY TATASKY
DISPUTE WITH SUN TV
OVER CONTENT. SETTLED.
DTH SUBSCRIBER
BASE AT ~10 MN
LAUNCH OF
RELIANCE BIG TV
LAUNCH OF DTH
SERVICE BY VIDEOCON
LAUNCH OF DTH
SERVICE BY AIRTEL
0
DISH Subscribers
DTH Subscribers
5

Million
Opportunities galore!
Key statistics:
Total HHs
232 mn.
TV HHs
136 mn.
TV Penetration 59%
C&S HHs
105 mn.
C&S Penetration (in TV HHs) 77%
DTH Subs *
27.5 mn.
300
250
200
150
100
50
0
73%
77%
81% 84% 86%
88%
238 241 243
236
229 233
129 136 142 147 152 155
130 136
115 123
94 105
2008 2009 2010E 2011E 2012E 2013E
Total HHs
TV HHs
C&S HHs
C&S Penetration
100%
80%
60%
40%
20%
0%
• Increasing TV HHs; likely to be 155 million, 64% penetration, by 2013.
Developed countries average penetration at more than 97%. China at 98%.
• C&S penetration: huge opportunity, likely to be 88% by 2013.
• DTH to be the key driver & direct beneficiary of increasing C&S households!
Source: MPA 2009 report * Up to 31/10/10. (Source: market est.) C&S implies cable TV & DTH HHs
6

DTH growth projections…
40
35
30
25
20
15
10
5
0
MPA 2009 FICCI Frames 2010
37.8
45
34.1
20.5% CAGR 2009-13 40 25% CAGR 2009-13
29.5
35
30
24.1
30
24
17.9
25
11.1
20 16
15
1.1
3.6
10
5
43
39
35
0
2006 2007 2008 2009 2010p 2011p 2012p 2013p
2009 2010p 2011p 2012p 2013p 2014p
DTH Sub. Base (mn.)
70%
60%
50%
40%
30%
20%
10%
0%
58.5% 61.2%
63.9% 64.3% 63.9% 63.7% 63.5% 63.3% 63.2%
12.0%
1.0% 2.0% 4.0% 8.6% 13.1%
0.4% 0.9%
2.9%
17.0% 21.0% 24.0%
16.9% 20.0%
26.0%
28.0%
22.4% 24.4%
% Cable HHs to TV HHs % DTH HHs to TV HHs % DTH HHs to Pay TV HHs
Source: MPA 2009
Cable HHs include analogue & digital cable
Pay TV includes Cable + DTH + IPTV
7

Outperformed !!
MPA 2009 Report - Indian DTH subscribers to reach 24.1 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.”
January – October 2010 – 9.0 million* DTH subscribers added
taking industry size to 27.5 million!
Festival quarter continues to surprise positively!
* Source: Dish TV actual & Market Est.
8

Outperformed !!
30
25
20
15
10
5
0
DTH industry scale-up
Subscribers in Mn.
1.5
4.3
10.3
18.4
27.5
2006 2007 2008 2009 2010 - Upto
October
Source: Dish
TV actual &
industry est.
• DTH driving digitization & growth in pay-TV HHs.
• DTH penetration already at ~ 26% of C&S HHs; ahead of estimates.
• An estimated 60% of all new C&S subscribers up to 2018 expected to opt for a DTH connection.*
• TRAI’s recent recommendations on digitization in the form of sunset clause to provide further impetus.
With more than 2.5 mn. subscribers being added every quarter, India is poised to overtake
the current leader (U.S), which currently adds ~ 1.5 mn. subscribers each year.
9
* Source: MPA report 2009

Digitizing with addressability
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
92%
Cable subscription to broadcasers
DTH subscription to broadcasters
83%
67%
56% 53%
51%
44% 47% 49%
33%
17%
8%
2006 2007 2008 2009 2010 P 2011 P
` mn.
Subscription Revenue
Cable Subscription to Broadcasters 2006 2007 2008 2009 2010P 2011P
Subscription Income Paid (Digital + Analogue) 19750 23110 27545 30805 34535 39305
Less: Carriage & Placement Received 5000 6000 12000 13000 13000 13300
Net Subscription Paid 14750 17110 15545 17805 21535 26005
DTH Subscription to Broadcasters
Net Subscription Paid 1360 3415 7795 13905 19375 24925
DTH continues to strengthen its relationship with broadcasters creating a win-win
situation for both.
Source: MPA 2009, FICCI 2010 &
Mkt. estimates
10

Key regulations
Licensing
• 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 will result in
license fee outflow at ~ 4%)
• Initial license validity of 10 years; renewable thereafter
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 TRAI‟s (Telecom Regulatory Authority of India) recommendation dated 30 th 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.
11

Recent regulatory initiatives
Tariff Order
for
addressable
systems
• Broadcasters to mandatorily provide pay channels to digital service providers at a maximum of 35%
of corresponding rates for non-addressable cable TV services *
• Retail tariff under forbearance.
Digitization
TRAI recommendation on sunset date for analogue TV systems in India:
• Phase I # - Four metros – by 31/03/2011. Phase II – Cities with 1 mn.+ population - by 31/12/2011
• Phase III – Other urban areas – by 31/12/2012. Phase IV – Rest of India – by 31/12/2013.
* Since challenged by Pay Broadcasters in TDSAT.
# Phase I likely to miss deadline due to Common Wealth Games and state elections.
12

Dish TV – market leader in DTH
13

Business – basics
• Direct-to-home distribution of TV channels up-linked from India by
Broadcasters.
• CPE installed on rent at consumer’s premises.
• Inertia to pay for hardware equipment results in up-front subsidy on STBs.
• Negative Working Capital cycle – subscription revenue collected in advance.
• DTH revenue includes subscription and lease rentals.
• Emerging 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.
14

Key strengths
Brand
Strong Brand presence and Brand recall.
Market Leadership
Largest subscriber base amongst all six players; currently at 32%.
Carried and distributed by most third party dealers and distributors.
Content
Highest number; more than 250 channels & services and growing.
Fixed content cost deal with most big broadcasters.
Selling & Distribution Network
Pan-India presence through 1400 distributors & ~55,000 dealers across 6600 towns
Network managed by over 200 sales personnel. 8 Zonal and 19 Regional Offices.
Advanced Infrastructure & Technology
Sufficient capacity to broadcast increasing number of channels – currently 11 KU
band transponders equivalent.
‘DISH TRUHD’ with content tie-up with highest no. of HD channel broadcasters.
15

Select key management personnel
Subhash Chandra
Non Executive Chairman
Jawahar Lal Goel
Managing Director
R.C. Venkateish
CEO
Salil Kapoor
COO
Rajeev Dalmia
CFO
Promoter – Essel Group of Companies. He is the
pioneer of the Indian television industry and recipient
of numerous honorary degrees, industry awards and
civic honours. Profile - Chairman.pdf
Mr. Goel is the MD of Dish TV since January ‘07 & has
been instrumental in establishing it as India’s leading
DTH company. He has also been actively involved in
the expansion of the Essel Group and is an active
member on the Board of various committees set up by
MIB, Govt. of India for addressing critical matters
relating to the industry. Profile - MD.pdf
On-board since July ‘10, he was the MD-India & South
Asia, ESPN Star Sports before that. An IIT, IIM
Graduate, Venkateish has more than 27 years of
experience & a successful track record in turning
around businesses & re- defining business processes
for winning brands like Oral-B, Nestle and Kelloggs.
Profile - CEO.pdf
Salil has a work experience of more than 18 years and
has worked with various global corporations including
Microsoft and Samsung. He is an MBA from Delhi
University.
A qualified Chartered Accountant, Rajeev has been
leading the finance department since January, ‘07.
16

Dish TV – now
17

18
Dish TV crossed the 9 million subscriber mark in November, ‘10 becoming the first DTH player in
the country to achieve the landmark number so far.

Market leading share
Dish TV continues to lead with the highest market share amongst all 6
players
18% 10%
20%
15%
5%
32%
Dish TV Tata Sky Sun Direct
Big TV Airtel Digital Videocon D2h
Source: Dish TV actual & industry est.
(31/10/10)
19

Consistent leadership
Dish TV – Increasing number of subscribers
Dish TV - Market share on total subscriber base
10
8
6
4
2
3.9
3.4
4.7
5.9
5.5
5.1
5
4.6
4.3
4
6.9
6.4
5.7
5.3
8.7
8.3
7.5
7.1
6.8
6.2
30
25
20
15
10
5
75%
23
20.7
18.4
42%
11.1
35% 33%
6.4
6.9
3.6
4.7
2.7
27.5
26
33% 32% 32%
7.5 8.3 8.7
80%
70%
60%
50%
40%
30%
20%
10%
0
0
0%
Dec. '07 Dec. '08 Dec. '09 Mar. '10 June '10
Sept.
'10
Oct. '10
Total DTH Subscribers
Dish TV Subscribers
Gross Subscriber Base (mn.)
Net Subscriber Base (mn.)
Dish TV Market Share
Source: Dish TV
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.
20

`
`
Q1 FY 09
Q1 FY 09
Q2 FY 09
Q2 FY 09
Q3 FY 09
Q3 FY 09
Q4 FY 09
Q4 FY 09
Q1 FY 10
Q1 FY 10
Q2 FY 10
Q2 FY 10
Q3 FY 10
2487 2635 2477 2383 2147 2083
Q3 FY 10
Q4 FY 10
Q4 FY 10
Q1 FY 11
Q1 FY 11
Q2 FY 11
Q2 FY 11
Key business metrics
240
Average Revenue Per User (ARPU)
160
164
150 137 132
142
139 135 138 139 139
80
0
• Increasing trend – rationalisation back!
• Continuous efforts to evolve ARPU levels.
Subscriber Acquisition Cost (SAC)
3000
2634 2601 2832 2505
2000
1000
0
• Focus on reducing subsidies.
• Support coming in from growing
incremental market share.
Source: Company ARPU = (Subscription revenue + activation charges) / Avg. subscribers during the period; SAC = Subsidy on STB+80% of
marketing expenses + Commission to dealers
21

Driving up ARPUs – marketing initiatives
Silver pack made dormant.
Constant marketing initiatives to create better value proposition in higher ARPU packs.
22

Driving up ARPUs – HD & VAS
High Definition & Value Added Services seen as ARPU drivers in the long run.
23

Financials
24

` Mn
` Mn.
` Mn
Q2 FY 09
-874
Q3 FY 09
-389
Q4 FY 09
42
Q1 FY 10
157
Q2 FY 10
255
134
Q3 FY 10
Q4 FY 10
400
Q1 FY 11
322
Q2 FY 11
498
Encouraging performance
Operating Revenues - Annual
EBITDA Margins - Annual
12000
10000
8000
6000
4000
2000
FY 08-10 CAGR 62.0%
4127
1909
7377
10848
20%
0%
-20%
-40%
-60%
8.7%
FY 07 FY 08 FY 09 FY 10
-18.3%
0
FY 07 FY 08 FY 09 FY 10
-80%
-100%
-97%
-53%
Operating Revenues - Quarterly
EBITDA & EBITDA Margins - Quarterly
3500
3000
2500
2000
1500
1000
500
0
3261
3032 3043
2775
2467 2575
Q1 FY 10 Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY 11 Q2 FY 11
25
600
400
200
0
-200
-400
-600
-800
-1000
-50%
-20%
2%
6.4%
9.9%
4.8%
13.2% 10.6%
15.3%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
-60%

Subs mn
171
202
234
319
529
540
588
971
1023
1086
1150
1298
1437
1638
Fixed content cost driving margins
3000
2500
2000
1500
1000
500
0
80%
71% 71%
73%
70%
70%
61% 61% 59%
60%
58% 61% 60%
54%
57%
54% 54%
46%
50%
41%
46% 46%
40% 39% 39%
43% 42% 39% 40%
29%
30%
29% 27%
30%
20%
10%
420 502 646 755 804 867 929 670 881 925 986 1,001 1,060 1,062
0%
Jun-07 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
Content Cost Contribution Content Cost (% Subs Revenue)
26

Summary financials
Quarter ended Sept '09 Dec '09 March '10 June '10 Sept '10
Gross operating revenue 2575 2775 3032 3043 3261
Expenditure 2344 2659 2683 2721 2763
EBITDA 231 116 349 322 498
Add: Other income 4 11 5 69 25
Less: Depreciation 730 779 846 889 843
EBIT -495 -652 -492 -498 -320
Less: Financial expenses 66 110 106 133 131
PBT -561 -762 -598 -631 -451
Provision for tax 0 0 0 0 0
PAT -561 -762 -598 -631 -451
Operating Metrics Sept '09 Dec '09 March '10 June '10 Sept '10
Subscribers added (mn.) 0.41 0.55 0.44 0.64 0.76
SAC (Rs/subscriber) 2635 2477 2383 2147 2083
ARPU (INR) 139 135 138 139 139
** Flat QoQ revenue growth in June „10 due to discontinuation of HITS operations.
Source: Company Financials. All figures in ` mn. except mentioned otherwise.
27

Way forward
28

Growth beyond just subscriber numbers
Continuous
focus on:
Sustained
product
Customer care
Expand
customer
base with
Augmenting
revenue
contribution
through
innovative value
added services
innovation to
retain
subscribers and
expand
category
Brand building
Technology
and
Distribution
focus on
leadership
29

Thank you
30

Questions
31