DTH OPPORTUNITIES AND CHALLENGES IN AFRICA Rodney BENN, Regional VP Africa

AFRICA IS HUGE!!!

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In 2011 the population of Sub-Saharan Africa was some 877 million with around 181 million households, 60 million TV households

SSA population is growing at 2.7% per annum (cf Latin America – 1.2% and Asia 1.2%)

SSA population will be 976m in 2015

Africa’s consumers booming – growing from 35 % in 2000, to 52 % with disposable income in 2020 (McKinsey)

Africa’s population heavily dispersed still and NOT concentrating – despite massive urbanisation

By 2040, SSA will have 1.4 billion population but only 240 million will be in cities (80% RURAL) – and NB - RURAL does not necessarily mean “poor and poverty stricken”

An environment only favourable to satellite coverage with some 1.16b people still classed as rural

AFRICA - SOME INTERESTING, THOUGHT PROVOKING FACTS ….

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Growth in African Consumers Household revenues

AFRICA’S BURGEONING MIDDLE CLASS CONSUMERS

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Poor

Basic Needs

Merging Consumers

Middle class

Rich

100%

80%

60%

40%

10%

0%

2000 2008 2020

Ref: McKinsey

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

17 26 37 53 83 136

201 283

379 458

552 620

735 804

860 906

2.06% 3.13% 4.43% 6.22%

9.47%

15.30%

22.20%

30.59%

40.23%

47.79%

56.53%

62.62%

72.62%

78.11% 82.06%

84.88%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

100

200

300

400

500

600

700

800

900

1000

Connections (Millions)

Penetration

Eutelsat: 51% market share in the number of satellite TV channels broadcast over SSA

TV EVOLUTION WILL FOLLOW CELLULAR EVOLUTION

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Mln

Source: Dataxis

Exponential Growth in Africa’s Mobile Market More than 120 million African homes will receive Digital TV in 2018

Current Internet Penetration

Mobile Penetration

Rural Population In 2040

Mobile usage by technology

Out of 1,400 Million population

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SUB SAHARAN A.-MANY POTENTIAL DIGITAL CONSUMERS

Source : World Bank, ITU, GSMA

80%

13%

78%

2G 2.5G 3G

Opportunities exist as well as challenges

DIGITAL TV LANDSCAPE IN AFRICA

Africa’s Digital TV Ecosystem – 2014

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DTT rollout DTH

Mobility

Local Content

International Content

Leapfrog - SHD, 4K …

Show me the market!

Africa is NOT a homogenous place

At least 7 sub continents - with vastly different tastes

North Africa, West Africa – Francophone, West Africa – English, East Africa, Central Africa, Portuguese West and East Africa, Southern Africa

Further enhanced by tribal and religious differences

Pearls of wisdom-

The market doesn’t know what they want until its shown to them! Content is still king

The market wants to see everything but its willingness to pay follows a diminishing return model

The market compares and values picture quality

The market doesn’t like to switch (dishes)

SHOW ME THE MARKET (MONEY)

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KEY VIDEO NEIGHBOURHOODS IN AFRICA

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> 2.5 million homes

EUTELSAT 36B at 36° East

> 1 million homes

EUTELSAT 16A at 16° East

< 1m growing

EUTELSAT 7B at 7° East

+- 5 million subs

IS7 at 68.5° East

<1m subs

SES 5 – Sub-Saharan

Successful DTH platforms

AFRICAN DTH – BUSINESS MODELS FOR SUCCESS

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ViewAfrica

Key content RECIPE – SPORT, movies, music, education, news, religion

Content makes up over 50% of the total costs each month

Carefully analyses and balance viewer preferences with local content (pictures from home), vs. outside content. The Village and Community TV is very popular

Subsidise STB’s, dish installation, etc. - with highly efficient distribution in country

Customer care – post sale, revenue collection is key

Advertising model – only works where reliable AUDIENCE MEASUREMENT can be achieved

Successful DTH operators are all well funded – don’t try to do this on a shoestring

Population – 1.1 billion 2.5 % Households - 239 million 3.3 % TV households – 117 million 6.3 % Satellite PayTv Subs – 10.5 million 11 % DTT Subs – 2.6 million 6.3 % Digital FTA households – 38.2 million 7 %

AFRICA TV FIGURES AND FORECASTS 2014 - Q1

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Annual growth %

AFRICA - TV EVOLUTION

Competition for the African mass TV eyeballs

For the next 2-4 years – dominated by switchover to DTT

Underpinned by DTH as gap-filler and premium service

Increase in rise of Free to Air (free to view) platforms

Will there be a credible triple play entrant? Possibly from Airtel? Etisalat? MTN?

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EUTELSAT INNOVATION: “SMART LNB” Narrowband return link, independent, low-cost & simple

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Low cost equipment / Reduced OPEX thanks to high spectrum efficiency

Ku-band Steerable (West Africa) Downlink Coverage Ku-band Africa Downlink Coverage

EUTELSAT AFRICAN COVERAGE

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%

Ku-band Western Downlink Coverage

EUTELSAT E21B at 21.5° East EUTELSAT 36A at 36° East EUTELSAT 36A at 36° East

Ku-band Southern Africa Downlink Coverage

EUTELSAT 36B at 36° East

Ku-band Sub Saharan Africa Downlink Coverage

EUTELSAT 36B at 36° East

Ku-band Africa Downlink Coverage

EUTELSAT 70B at 70.5° East

EUTELSAT AFRICAN COVERAGE

51 %

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Predicted Steerable Ku-band Downlink Coverage Predicted C-band Downlink Coverage

%

Predicted Ku-band Downlink Coverage

EUTELSAT 3B at 3° East EUTELSAT 3B at 3° East EUTELSAT 3B at 3° East

EUTELSAT 16A KU-BAND AT 16° EAST – LAUNCHED IN 2011

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EUTELSAT 7B AT 7° EAST - OPERATIONAL JULY 2014

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We’re ready to support you in today’s & tomorrow’s challenges THANK YOU

19 Rodney Benn / Regional VP – Africa / rbenn@eutelsat.com

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