Dish TV Investor Presentation Aug 09

DISH TV INDIA LIMITED
Corporate Presentation

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securities in the United States.
2

DTH Industry Overview

India TV industry and DTH overview
Increasing TV Penetration
Pay-TV market on a growth trajectory
No of Households in MM
250
225
200
175
150
125
100
75
220
215
209
103
104
105
106
51%
54%
53%
49%
225 229 233 236 239 241 243
88
91 89
94
64%
100
96
62%
63%
60%
59%
56%
129 136 142 148 152 155
103 110 116 122
70%
65%
60%
55%
50%
45%
175
150
125
100
75
50
25
56%
57
59%
65
62%
72
67%
82
73%
94
77%
105
81%
115
84%
124
86%
131
88%
137
100%
90%
80%
70%
60%
50%
40%
30%
50
2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p
40%
-
2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p
A nalog Cable TV DTH Digital + IPTV Pay-TV as a % of Total TV HH
20%
Source: MPA report 2009
TV HH Non-TV HH TV as of % of Total HH
DTH gaining foothold in TV HHs
Source: MPA report 2009
Share in incremental Pay TV HH added
70.0%
2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p
64% 64% 64% 64% 64% 63% 63%
61%
100%
2%
59%
1% 4% 9%
7%
12% 11%
60.0% 55%
19%
56%
29% 43%
80%
27%
50.0%
40.0%
60%
60% 62%
99% 96%
63%
89%
30.0%
24%
40%
62%
22%
20%
67%
63% 61%
20.0%
17 %
13 %
20%
9%
28% 26%
10.0%
18%
3%
9%
0% 0% 1%
0%
-5%
0.0%
-17%
2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p
-20%
% Analog Cable TV % DTH % Digital + IPTV
% DTH HH to TV HH % Cable HH to TV HH
Source: MPA report 2009
Source: MPA report 2009
• 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
4
% share of incremental subscribers

DTH – exponential market growth
45%
40%
35%
DTH % of HH’s – Increasing penetration
• Increased competition fueling high
growth
30%
25%
20%
15%
10%
5%
0%
2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p
% DTH HH to Total HH % DTH HH to TV HH
DTH % of Cable HH
DTH % of Pay TV HH
• High end audio-video quality leading
to increased penetration
• DTH as a % of TV HH is expected to
increase to 24% by 2013 (Source: MPA
2009)
Source: MPA report 2009
No. of households in mm
50
40
Rapidly growing - DTH Subscriber base
34
29
30
24
20
18
11
10
CAGR: 20.7% (2009p -13p)
38
• 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
4
0 0
1
0
2004 2005 2006 2007 2008 2009p 2010p 2011p 2012p 2013p
Source: MPA report 2009
5

Key industry milestones
Subscribers in mm
12
10
8
6
4
2
-
Launch of DTH
Services by Dish TV
in select markets
DTH subs breach
the 2 mn mark
between 2 players
Launch of DTH
services by Tatasky
Dispute over
Trigger on
content settled
Digitization CAS made
between Dish &
mandatory in select
Star
parts of metros
DTH subscribe
Voluntary Digitization
base at ~10 mn
of Cable players
subs
started to launch
digital cable services
Launch of DTH
operations by
Reliance
Launch of DTH
operations by
Sun Direct
Launch of DTH
operations by
Airtel
Dispute over
content with Sun TV
settled
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)
Source: Dish TV
6

Current DTH landscape
Company
Group Zee Group Tatas Sun TV Reliance ADAG Bharti
Launch Date 2 Oct 03 Aug 06 Jan 08 Aug 08 Oct 08
Subscribers – Dec 08 1 4.5 3.2 2.3 1.1 NA
Ownership 2 Public Private Private Division of R.com Division of Bharti
Technology 2 MPEG2 S1 MPEG2 S1 MPEG4 S1 MPEG4 S1 MPEG4 S2
Geographical Spread 2 ***** *** ** ** *
Distributors 2 ***** *** ** **** *
Pricing Strategy 2 ***** ***** *** ***** *****
Channels tie ups 1 225 200 170 200 150 2
Services 2 40 19 29 54 32
Source: MPA report 2009 ; 2: Dish TV estimates
7

Industry -Key regulations
Licensing
regulations
• 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 Connect
Regulation
• Content providers have to provide content to all broadcasters; Pricing flexible
• Prohibits broadcasters from guaranteeing minimum number of subscribers
Quality of Service
Regulation
• Subscriber to be offered STBs on Rental / Hire purchase / Sale
• Mechanism to handle customer complaints & grievances
Reference Interconnect
offers
• Pricing information on content of the broadcaster
• Max 50% of Non CAS Cable Rates
• A-la-carte offering to be allowed
8

DISH – Market leader in DTH

Dish TV – From India’s largest media conglomerate
Essel Group
Company
Business
Market cap
(US$m)
Revenues
(US$m)
Dish TV (73%) • India’s largest Direct to home satellite distribution company 888 153
Zee Entertainment
Enterprise Ltd (42%)
• 22 entertainment channels covering genres GEC, Movies, Sports, Music,
Religious, Comedy, Lifestyle
1,575 453
Zee News Ltd (54%) • 11 channels covering genres news, business, and regional GECs 204 106
Wire & Wireless India
Ltd (49%)
• India’s largest Cable distribution company 87 57
ETC Networks (71%) • Music and regional channels, education business 23 14
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
10

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”)
11

Dish TV – Key strengths
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
Largest channel
offering with
diversified
content
Sales & Distribution
network
• Largest number of channels offered on DTH platform – 240 channels & services (Jun09)
• ZEE brand name and content backing ==> One of India’s leading media group
• Continuous focus on strong regional content in linguistic zones
• Leverage in content tie-ups due to a dominant market leadership position
• Pan-India presence through 800 distributors & ~48,000 dealers across 6600 towns as of
Jun 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
Advanced
infrastructure
• 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
12

Dish TV – Strategy
Customer
acquisition
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
Customer
retention
strategy
• 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
13

Select key management personnel
Mr. Subhash Chandra
Non-Executive Chairman
Mr.Jawahar Lal Goel
Managing Director
Mr.Salil Kapoor
Chief Operating Officer
Mr. Rajiv Khattar
President Projects
Mr. Amitabh Kumar
President Technology
• Mr.Chandra is the promoter of Essel Group of Companies
• His business interests include television networks and film entertainment, cable systems, satellite communications,
theme parks, flexible packaging, family entertainment centers and online gaming
• Mr. Chandra has been the recipient of numerous honorary degrees, industry awards and civic honors, including being
named ‘Global Indian Entertainment Personality of the Year’ by FICCI for 2004, ‘Business Standard’s Businessman of
the Year’ in 1999, ‘Entrepreneur of the Year’ by Ernst & Young in 1999 and ‘Enterprise CEO of the Year’ by
International Brand Summit.
• Jawahar Lal Goel has been the Managing Director of Dish TV since January 6, 2007
• Mr. Goel is been actively involved in the creation and expansion of Essel Group of Industries and has been
instrumental in establishing Dish TV as a prominent DTH brand in India.
• He is the president of the Indian Broadcasting Foundation and is an active member on the Board of various
committees and task forces, set up by Ministry of Information & Broadcasting.
• Salil Kapoor has been the Chief Operating Officer since July 2008. He is responsible for sales, marketing, service and
overall supervision of the zonal offices of Company.
• He has work experience of over 18 years in the industry with various global corporations including Samsung India Elec.
Ltd., Microsoft Corp.India (Pvt) Ltd., LG Electronics India, Blue Star Limited and Fedders Llyod Ltd.
• Mr. Kapoor holds a bachelor of engineering from Bangalore University and MBA from University of Delhi.
• Rajiv Khattar has been the President-Projects of our Company since September 1, 2005. He is responsible for
strategic tie-ups and technology upgrades of the DTH platform.
• Mr. Khattar has an aggregate work experience of 20 years and experience of 12 years in the telecom industry. Prior to
joining Dish, he worked with Reliance Infocom Limited as the President for Netway.
• Since September 2005 Mr. Amitab Kumar is responsible for broadcasting operations of the Company
• Prior to joining Dish, he has held various senior positions in the Industry including the position of the acting Chairman
and Managing Director of Tata Communications Limited (formerly known as Videsh Sanchar Nigam Limited)
• Mr. Kumar has an aggregate work experience of 31 years in the telecom industry and holds a professional certificate
in electronic data interchange from All India Management Association and Deakin University, Australia
Mr. Rajeev Dalmia
CFO
• Mr. Dalmia has an overall work experience of 20 years in the finance industry and is responsible for maintaining
finance and accounts of the company
• He is a qualified fellow chartered accountant from the Institute of Chartered Accountants of India
14

DISH TV - Competitive position
Dish TV – Increasing number of subscribers
Dish market share on total subscriber base
No of Subs. MM
6
5
4
3
2.7
2.2
3.0
2.5
3.4
2.9
3.9
3.4
4.7
4.0
5.1
4.3
5.5
4.6
12
10
8
6
4
2
3.6
75.7%
2.7
11.1
42.4%
4.7
80%
70%
60%
50%
40%
30%
20%
10%
% Share
2
Q3
FY08
Q4
FY08
Q1
FY09
Q2
FY09
Q3
FY09
Q4
FY09
Q1
FY10
0
Dec-07
Dec-08
0%
Gross Subscriber base MM
Net Subscriber Base
Total DTH HH Dish TV HH Dish TV Market Share
Source: Dish TV
Source :Total DTH HH as per MPA report 2009; Dish TV HH – Gross Subscribers as per Dish TV
Players with large and stable subscriber base to emerge as winners in the long
run…..Dish TV well placed being the largest player in the DTH industry
15

Dish TV – Financials

Dish TV - Financials
Revenues - Annual
EBITDA - Annual
9,000
7377
0
FY 07 FY 08 FY 09
0%
7,000
CAGR: 56.9%
-500
-20%
INR MM
5,000
3,000
1909
4127
-1000
-1500
-2000
-1889
-53%
-26%
-1885
-40%
-60%
-80%
1,000
Source: Audited financials
FY 07 FY 08 FY 09
Revenues - Quarterly
-2500
-99%
Source: Audited financials
-2196
EBITDA - Quarterly
-100%
2,500
2,000
1927
2071
2467
250
0
Q3 FY08 Q4 FY08 Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10
145
44
6%
2%
20%
0%
INR MM
1733
1644
1,500
1363
1121
1,000
Q3 FY08 Q4 FY08 Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10
-1000
Source: Published quarterly results
Source: Published quarterly results
-250
-20%
-39% -41%
-390
-500
-50%
-538
-57%
-642
-667
-750
-874
Aggressive subscriber acquisition coupled with higher margins
-20%
-40%
-60%
-80%
-100%
17

Lower content cost driving higher margins
1800
1600
1400
1200
80%
71% 71%
73%
1074
70%
1332
1407
60% 61%
1517
61%
1641
59%
90%
80%
70%
60%
Subs mn
1000
800
600
400
200
0
588
880
540
529
319
41%
704
971
591
234
39%
29%
29%
40% 39%
454
202
30%
171
27%
91
20%
363 420 502 646 755 804 867 929 670
M ar-07 Jun-07 Sep-07 Dec-07 M ar-08 Jun-08 Sep-08 Dec-08 M ar-09
50%
40%
30%
20%
10%
0%
Dish TV moves
from variable to
fixed price content
cost contracts
Content Cost
Content Cost (% Subs Revenue)
Contribution
Contribution (% Subs Revenue)
Source: Company
Contribution margin are steadily improving…..… business heading towards EBIDTA break even
18

Key business metrics
ARPU
INR
180
170
160
150
140
130
120
110
100
164
158
150
142
142
137
132
Q3 FY08 Q4 FY08 Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10
Subscriber acquisition cost
• ARPU under pressure with increased
competition
• Rational pricing to prevail as low pricing
not sustainable over long term
3,000
2832
2,500
2634
2601
2505
2487
INR
2,000
1,500
1880
2034
• Focus on reducing subsidies – Moved to a
model of charging for a bare box and
un-bundling of the content fees and the
Set top boxes
1,000
Q3 FY08 Q4 FY08 Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10
Source:
Dish TV; ARPU = (Subscription revenue + activation charges) / Avg. subscribers during the period; SAC = Subsidy on STB+80% of marketing exp.+Comm. to dealers
19

Summary Financials – Quarterly
Quarter ended Jun-08 Mar-09 Jun-09
Gross Operating Revenue 1,644 2,071 2,467
Expenditure 2,311 2,027 2,322
EBITDA (667) 44 145
Add: Other Income 2 10 54
Less: Depreciation 446 644 689
EBIT (1,111) (590) (490)
Less: Financial Exps 143 217 202
PBT (1,254) (807) (692)
Provision for Tax 2 2 0
PAT (1,256) (809) (692)
Operating metrics Jun-08 Mar-09 Jun-09
Subscribers Added (mm) 0.40 0.35 0.44
SAC ( Rs/sub) 2,634 2,505 2487
ARPU ( INR ) 164 131 142
Source: Dish TV Earnings release and published quarterly results; Amounts in INR MM unless other wise mentioned
20

Investment summary
Large and growing
DTH market
Pioneer and leader of
DTH services in India
Full-service
business model
Largest channel
offering with
diversified
content
Advanced
infrastructure
• 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 5 players
• 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 ~ 5.5 mm (Jun-09)
• Backed by Zee Group One of India’s leading Media group
• Basic subscription packs
• Value added services
• Bandwidth
• Teleport services
• 240 channels & Services
• Content tie-ups at fixed rates – largest subscriber base to provide economies of scale
• 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
Large distribution
network
• Wide reach to 6,600 towns through 800 distributors and 48,000 dealers (Jun 09)
• 8 Zonal and 9 regional offices (Jun 09)
21

Questions?

Thank you