dishtv investor presentation
TRANSCRIPT
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Dish TV India Limited
Investor Presentat ion
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Disclaimer
Some of t he st at ement s made in t his present at ion are f orw ard- l ooking st at ement s and are
based on the current beliefs, assumptions, expectations, estimates, objectives and
and t he indust ry and market s in w hich i t operat es.
These forw ard- look ing st at ement s include, wi t hout l i mi t at i on, st atement s re lat ing t o
r evenues an ear n ngs. e w or s
bel ieve , an t i c ipat e , expect , est imate , in t end , p roj ect and sim i l ar expressions
are a lso int ended t o ident i f y f orward l ook ing st at ement s.
These st at ement s are not guarant ees of f ut ure perf orm ance and are subj ect t o
r i sks, uncert aint ies and ot her f act ors, some of w hich are beyond t he cont r ol of t he
Company and are d i f f icu l t t o predict . Consequent ly , act ual resul t s could d i f f er mat er ia l l y
- ,
other factors, changes in economic and market condit ions, changes in the regulatory
envir onment and ot her business and operat ional r isks. Dish TV India Limi t ed does not
undert ake t o updat e t hese for war d- looking st at ement s t o ref l ect event s or cir cumst ances
t hat may ar ise af t er publ icat ion.
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About us
Indias pioneer and AsiaPacif ic s lar gest * DTHcompany.
Consist ent market leaderw it h 31% absolu t e sharecurrent ly.
Promot ed and led bySubhashChandr a, Chair m an, Essel
Asia s lar est DTH Consist ent Leader
roup. oug ea er
and pioneer in most of hisbusinesses.
Prom ot ed by
G R O U P
Indias m ediapioneer
Indias f i rst & largest , fu l l yin t egrated, m edia &
ent er t ainm ent com an .
Having di ver se pr esence acrossmedia, packaging, enter t a inme
nt , t echnology enabledservices, inf rast ruct ure
* Ranked by DTH Subs (Y/ E Dec. 09) MPA Repor t 20103
development & educat ion.
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Indian DTH industry
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Journey so far
25VOLUNTARY DIGITIZATIONBY CABLE OPERATORS .
DTH SUBS CROSS20 MN MARK
20
N
DISPUTE OVER CONTENT .SETTLEMENT BTW DISH & STAR
DTH SUBS BREACH THE 2MN
MARK IN A 2 PLAYER MKT.
DTH SUBSCRIBERBASE AT ~10 MN
10RIBERSIN
DIGITIZATION
TRIGGRED,CAS MADEMANDATORY IN
SELECTPART OF METROS DISPUTE WITH SUN TV
5
SUBSC
LAUNCH OF DTH SERVICEBY DISH TV IN SELECTMARKETS
OVER CONTENT. SETTLED.
LAUNCH OFDTH SERVICE LAUNCH OF DTH
LAUNCH OF DTHSERVICE BY VIDEOCONLAUNCH BY
SUN DIRECT
0
BY TAT ASKY LAUNCH OFRELIANCE BIG TV
SERVICE BY AIRTEL
5
DISH Subscribers DTH Subscribers
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Opportunit ies galore!
Key statistics: 2010
249256
264 26995%
250
300
Tot al HHs 232 m n.
TV HHs 141 m n.
TV Penet rat ion 61%
223232
13 4 14 1 14 715 3 15 9 16 5
17 0
10 5 11 612 6
13 514 2 14 9 15 5
78 %
82 %86 %
88 %89 % 90 %
91
75
80%
85%
100
150
200
Million
C& S HHs 116 m n.
C&S Penet ration (in TV HHs) 82%
*
70%0
2009 2010 2011E 2012E 2013E 2014E 2015E
Tot al HHs TV HHs
Increasing TV HHs; l i kely t o be 170 mil l i on, 64% penet rat ion, by 2015.
Develo ed count r i es avera e enet rat ion at more t han 97%. China at 98%.
. .C& S HHs C& S Penet rat ion
C& S penet rat ion: huge oppor tun i ty , l i kely t o be 91% by 2015.
DTH t o be t he key dr iver & dir ect benef ic iary of increasing C& S households!
6
Sour ce: MPA 2010 r epor t C& S impl i es cable TV, DTH & IPTV *Up to 28/ 02/ 11. (Source: market est .)
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DTH growth project ions
35
40
45
50
3136
4145
48
35
40
45
30
3539
43
25% CAGR 2009-13 25% CAGR 2009-13
MPA 2010 FICCI Frames 2010
10
15
2025
30
17
24
10
15
20
25
16
24
0
2009 2010 2011p 2012p 2013p 2014p 2015p
DTH Sub. Base (m n. )
0
5
2009 2010p 2011p 2012p 2013p 2014p
40%
50%
60%
70% 65.7% 65.5% 65.0% 64.5% 63.9% 63.2% 62.4% 61.5%
20.7% 23.6% 25.7% 27.2% 28.3%16.420.9%
24.3% 26.8% 28.8% 30.1% 31.2%
0%
10%
20%30%
8.3%
12.8% 17.2%.
7
% Cab le HHs t o TV HHs % DTH HHs t o TV HHs % DTH HHs t o Pay TV HHsSour ce: MPA 2010Cable HHs include analogue & digit al cable Pay TV in cl udes Cable + DTH + IPTV
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Outperformed ! !
MPA 2010 Report - DTH subscr ibers in India t o reach 24 mn. by t he
end of 2010 !
FICCI Frames 2010 - Tot al number of DTH subscr ibers t o be added in
2010 is expect ed t o be ~ 8 mi l l ion.
January December 2010 12.1 mi l l ion*DTH subscribers added
.Record2 mi ll ionsubscribers added during November 10!
8* Source: Dish TV actual & Market Est.
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Outperformed ! !
3035
18.430.6
DTH industry scale-up
Subscribers in Mn.
Sour ce: DishTV actual &indust ry est .
05
1015
20
1. 54. 3
.
DTH driv ing digit izati on & growt h in pay-TV HHs.
2006 2007 2008 2009 2010 - Upt oDecember
DTH penet rat ion al ready at 27% of C& S HHs; ahead of est im at es.
An est im at ed 58% of al l new C& S subscri ber s up t o 2015 expect ed t o opt f or a DTH connect ion. *
9
. . ,over t ake the cur rent leader (U.S), which curr ent ly adds ~ 1.5 mn. subscri bers each year.
* Sour ce: MPA - APAC Pay TV & Broadb and Repor t 2010
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Digitizing with addressability
92%
83%80%
90%
100%Cable subscr ipt ion t o broadcasers DTH subscr ipt ion t o br oadcast er s
67%
56% 53% 51%
33
44% 47% 49%40%
50%60%
8%
17%
0%
10%
20%
mn. Subscript ion RevenueCable Subscript ion to Broadcasters 2006 2007 2008 2009 2010P 2011P
Subscript ion Income Paid (Digit al + Analogue) 19750 23110 27545 30805 34535 39305
Less: Carriage & Placement Received 5000 6000 12000 13000 13000 13300Net Subscript ion Paid 14750 17110 15545 17805 21535 26005DTH Subscript ion to Broadcasters
Net Subscript ion Paid 1360 3415 7795 13905 19375 24925
10Sour ce: MPA 2009, FICCI 2010 &Mkt . est imates
DTH cont inues t o st rengt hen it s relat ionship wi t h broadcast ers creat ing a win-win
sit uat ion for bot h.
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Key regulations
Licensin
Total foreign investment limit of 49% (sub limit ceil ing 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 l ikel y to result
in l icense fee out flow at ~ 4%)
Initial license validity of 10 years; renewable thereafter
Servicequality
Subscribers can be off ered STBs on Rent /Hire-Purchase/Sale
Mechanism to be in place for handling customer complaints & grievances
Inter-connect
Broadcasters have to provide content to all distribution platforms; pricing flexible
Prohibits broadcasters from seeking guarantee for minimum number of subscribers
Referenceinter-
connect
Pri cing information on content of the broadcaster
Maximum 50% of non-CAS cable rates
A-la-cart e offering to be allowed
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* As per TRAI s (Telecom Regulator y Aut hori t y of India) recomm endati ondated 30thJune, 2010t o t he Minist ry of I&B, Foreign Invest mentLimi t f or DTH is to be increased to 74%. The recommendat ion is yet t o be approved.
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Dish TV market leader in DTH
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Business basics
Direct - t o-home dist r i but ion of TV channels up- l i nked f rom India by
Broadcasters.
CPE inst al l ed on r ent at consum er s pr em ises.
Inert ia t o pay f or hardw are equipm ent resul t s in up-f ront subsidy on STBs.
Negat ive Working Capi t al cycle prepaid m odel .
DTH revenue includes subscr i t ion and lease rent als.
Alt ernat e revenue st ream s - Value-added-services, Movie on-demand and
Bandw idt h charges.
Fixed content cost deals w i t h most broadcast ers; signi f icant compet i t ive
advantage.
Grow ing subscr iber base w ould br ing operat ing leverage i nt o play.
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Key st rengths
Strong Brand presence and Brand recall.
Brand
Largest subscri ber base amongst all six players; cur rent ly at 31%.Carried and dist ri buted by most third party dealers and dist ri butors.
Market Leadership
Highest number; more than 250 channels & services and growing.
Content
Pan-India presence through 1400 distributors & ~55,000 dealers across 6600 towns
Sell ing & Dist r ibut ion Network
e wor manage y over sa es personne . ona an eg ona ces.
Sufficient ca acit to broadcast increasin number of channels currentl 16 KU
Advanced Infrast ructure & Technology
14
band transponders equivalent.
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Largest Bouquet
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Maximum HD
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Maximum Regional
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Select key management personnel
Promot er Essel Group of Companies. He is t hepioneer of the Indian television industry and recipientof numerous honorary degrees, industry awards and
-
Subhash ChandraNon Executive Chairman
. .
Mr . Goel i s the MD of Dish TV since January 07 & hasbeen instrumental in establ ishing i t as Indias leading
DTH company. He has also been act ively involved int he expansion of t he Essel Gr oup and is an act ive
Jawahar Lal Goel
Managing Director
member on the Board of var ious commit tees set up by
MIB, Govt . of India f or addr essing cr it ical mat t er srelat ing to the industry. Profile - MD.pdf
R.C. Venkateish
CEO On-board since July 10, he was the MD-India & South, . ,
Gr aduat e, Venkat eish has mor e t han 27 year s ofexperience & a successf ul t rack r ecor d in t ur ningaround businesses & re- defining business processesfor winning brands like Oral-B, Nestle and Kelloggs.
Profile - CEO.pdf
a i Kapoor
COO
Sal il has a work exper ience of more than 18 years andhas worked with various global corporations includingMicrosoft and Samsung. He is an MBA f rom Delhi
University.
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CFO A qualified Chartered Accountant, Rajeev has been
leading the fi nance depart ment since January, 07.
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Dish TV now
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Asia - Pacif ics largest
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Market leading share
Dish TV continues to lead with the highest market share amongst all 6players
17% 9%
17%
19%7%
31%
Dish TV Tat a Sky Sun Di rect
Big TV Air t el Digi t al Videocon D2h
21Source: Dish TV act ual & industr y est .(28 / 02/ 11)
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Consistent leadership
10 9. 4
Dish TV Increasing number of subscr ibers Dish TV - Market share on total subscr iber base
30.675 %
80 %35
6
8
5. 55. 9
6. 4
6. 97. 5
8. 3
5. 76. 2
6. 8
7. 7
18.4
20.7
23
26
50 %
60 %
20
25
30
4
4. 75. 1
44. 3
4. 65
.
11.1
6. 97. 5 8. 3 9. 4
42 %
35 % 33 %33 % 32 % 31 %
20 %
30 %
40 %
10
15
0
2
3. 62. 7
4. 7.
0%
10 %
0
5
Dec . '07 Dec . '08 Dec . '09 Mar . '10 June '10 Sept .'
Dec. '10
09
09
1
10
10
10
10
1
11
11
11
Gross Subscr iber Base (mn. ) Net Subscr iber Base (mn. )
Source: Dish TV
T ot a l DT H Su bsc ri be rs Di sh T V Su bsc ri be rs
Dish TV Market Share
22
Players wi th large and stable subscriber base to emerge as winners in the long run.
Dish TV is wel l placed being the largest player in the DTH indust ry.
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Driving up ARPUs market ing init iat ives
24
. .
Constant market ing ini t iat ives to create bet ter value proposit ion in higher ARPU packs.
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Financials
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Encouraging performance
FY 08-10 CAGR 62.0%
argns - nnua
8000
10000
12000
7377
10848
.
perat ng evenues - nnua
0%
20 %
FY 07 FY 08 FY 09 FY 10
8.7%
2000
4000
6000
1909
4127
`
Mn
-60%
-40%
-20%
-18.3%
EBITDA & EBITDA Margins - Quarter lyOperating Revenues - Quarterl y
0
FY 07 FY 08 FY 09 FY 10-100%
-
-97%
-53%
3000
4000
2467 25752775
3032 30433261
3732
13.2%10.6
15.3%17.9%
15%
20%80 0
Q3
FY
09
Q4
FY
09
Q1
FY
10
Q2
FY
10
Q3
FY
10
Q4
FY
10
Q1
FY
11
Q2
FY
11
Q3
FY
11
1000
2000`M
n
89
42
157
255
134
400
322 4
98 6
67
2%6.4%
.
4.8%
.
-10%
-5%
0%
5%10%
-
0
20 0
40 0`
Mn
26
Q1 FY 10 Q2 FY1 0 Q3 FY1 0 Q4 FY1 0 Q1 FY 1 1 Q2 FY 11 Q3 FY 11
-3
-20% -25%
-20%
-15%
-600
-400
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Fixed content cost driving margins
Con t en t Cost Con t r ib u t ion Con t en t Cost ( % Su b s Rev en u e)
71% 73% 70%
60% 61%61%
59%54%
54%54%
57% 58%
61%
61%
60%
70%
2500
3000
529
540
58
8
71 1
0
23
10
86
1
150
1
298
1437
1638
1862
41%46%
46% 43% 42%39%
39%
29%27%
30%
40%39% 39%
30%
40%
1000
1500
2000
`
mn.
502 646 755 804 867 929 670 881 925 986 1,001 1,060 1,062 1,229202 2
34
319 9
0%
10%
0
500
- - - - - - - - - - - - - -
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Summary financials
Quarter ended Dec '09 March '10 June '10 Sept '10 Dec '10
Gross operating revenue 2 7 7 5 3 0 3 2 3 0 4 3 3 2 6 1 3 7 3 2
Expenditure 2 6 5 9 2 6 8 3 2 7 2 1 2 7 6 3 3 0 6 5
EBITDA 1 1 6 3 4 9 3 2 2 4 9 8 6 6 7
Add: Other income 1 1 5 6 9 2 5 1 7Less: Depreciation 7 7 9 8 4 6 8 8 9 8 4 3 9 0 2
EBIT - 6 5 2 - 4 9 2 - 4 9 8 - 3 2 0 - 2 1 8
Less: Financial expenses 1 1 0 1 0 6 1 3 3 1 3 1 2 2 5
PBT - 7 6 2 - 5 9 8 - 6 3 1 - 4 5 1 - 4 4 3
Provision for tax0 0 0 0 0
- - - - -
Operat ing Met rics Dec '09 March '10 June '10 Sept '10 Dec '10
Subscribers added (mn.) 0 . 5 5 0 . 4 4 0 . 6 4 0 . 7 6 1 . 1
SAC (Rs/subscr iber) 2 4 7 7 2 3 8 3 2 1 4 7 2 0 8 3 2 1 4 2
**
1 3 5 1 3 8 1 3 9 1 3 9 1 4 2
28
. . . .
Source: Company Financials. All f igures in` mn. except ment i oned otherw ise.
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Way forward
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Growth beyond j ust subscriber numbers
Continuousfocus on:
Sustained
product
innovat ion t o
Contentenr ichment
revenue
cont r ibu t ion
re ta in
subscri ber s and
expand category
Customer care
Brand build ing
Expand
cust omer base
wi t h f ocus on
innovative value
added servi ces
Technology
an d
ea ers pDistr ibut ion
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Thank you
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Questions
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