Dish TV India Limited Investor Presentation Disclaimer Some of the - PowerPoint PPT 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. 1

Indian M&E Industry Snapshot M&E industry composition & size (INR bn.) Indian Television Industry TV Print Films Others Broadcasting Industry Distribution Industry 307 133 17% Analog Digital 14% 62 DTH 11% Multiple Cable Cable 125 220 417 2018 885 broadcasters 104 14% 2013 12% 241 45% 18% 2008 producing content in 50% 42% 15 languages 243 374 across 172 26% 21% 7 genres 30% 28% 46% 15% beaming 580 918 1,786 ~788 channels Indian television market statistics (mn. HHs) 295.9 262.3 2013 - 2018 223.2 193.3 173.2  TV penetration (of total HHs) ~ 62% - 65% 161.8 126.6 135.0  C&S penetration (of TV HHS) ~ 83% - 90% 90.7 Average household size of 5.1 2008 2013 2018 Total HHs TV HHs C&S HHs CAGR of 5.11% (2013-2018) 2 Source: M&E industry composition & size: FICCI-KPMG 2014, Indian television statistics & broadcasting and distribution industry.: MPA Report 2013

Distribution Industry 3

Digital Addressable Systems - DAS Phase I Phase II Phase III & IV Delhi, Mumbai, Calcutta & Chennai 38 notified cities Rest of India 30-June-2012 31-Mar-2013 31-Dec-2014 Bulk of the potential DAS converts  Cable Limited coverage by large MSOs due to dispersed population   Land grab seeding at throw away prices Very high DTH recognition   No addressability/KYC DTH best suited considering terrain   Working backwards to fill in the critical gaps; billing, collection Key target markets with more than 60% incremental  90% of Total Revenue and dunning potential for DTH Digital Penetration of Total Pay-TV Subscribers in India is DTH Amongst the Lowest *  Opening up of cable stronghold markets 120% 100% 100% 100% 100% 100% 100% 99% 93% 100%  Bonus additions for the sector 69% 80% 45% 60% 40% Dish TV 20% 0% Higher incremental net adds; positive shift in subscriber  distribution 4 Source: *MPA Report 2013

Distribution Industry - Cable 1990 - 2014 3 Tiered Structure  Analog signal - limited carrying capacity, broadcasters jostling for PCS  Placement & Carriage fees - bulk of MSOs top-line Pre-DAS MSOs  Massive under declaration – ignored to maintain MSOs ‘reach.’ Reason behind LCOs prosperity. ( more than 115 ) No incentive to raise ARPUs Distributors (at least 1 for each  Digital signal - fatter pipe, larger carrying capacity. MSO)  Lack of addressability Post-DAS  Continued low content payout & dependence on placement fees LCOs  Efforts on to roll out last mile billing (more than 50,000) 5

Distribution Industry - DTH DTH Players in India  100% digital  Industry pioneer. Started operations in 2003  Owns last mile subscribers Dish TV  Part of the ‘Zee’ stable, largest producer and aggregator of Hindi  Subscription driven top-line programming in the world.  Fully prepaid  Launched in 2006. Tata Sky  JV between the TATA Group and News Corp  DTH contributes ~ 60% of the broadcaster’s domestic subscription revenue; scope for rationalization vs. cable  Launched in 2007 Sun Direct  JV between Sun Network and Astro, Malaysia  Fully tax compliant Reliance  Heavily taxed:  Part of Reliance Communication Ltd, a subsidiary of Reliance ADA Digital group • License fees – 8% AGR instead of  Launched in 2008 10% GR (TRAI recommendations on Airtel Digital issues related to new DTH licenses)  Part of the telecom major Bharti Airtel. • Entertainment tax - likely to be  Launched in 2009 Videocon subsumed post rollout of GST D2h  Part of the white goods manufacturing, Videocon group. 6

Dish TV 7

Key Managerial Personnel 8% Key Managerial Personnel – Pioneers and Visionaries Promoters 12%2% 13% GDR; held by Apollo PE, Non Executive Chairman 65% USA Promoter of the ‘ Essel ’ Group of companies  India’s media mogul and founder of ‘Zee’, India’s first FII (incl. 3% of Apollo  PE) satellite television channel in 1992 & later India’s first private news channel, Zee News Fin. Inst., Banks & MF A self-made man, has consistently demonstrated his ability  to identify new businesses and lead them on the path to Other Investors success Shareholding Pattern* Subhash Chandra Other business interests, education, theme parks, wellness  Many Firsts to its Credit Managing Director Key architect in creation and expansion of Essel Group of   First DTH in India Companies Key architect of cable TV services, established ‘ Siti Cable’   First to negotiate content on a fixed fee basis in 1994 Pioneered the DTH services in India and has been   First to launch Live TV for moving vehicles instrumental in establishing Dish TV Past president of IBF for four consecutive years upto 2010   First to achieve operational break-even in the DTH industry An active member on the Board of various committees set  Jawahar Lal Goel up by MIB, for addressing critical industry matters  First to launch High Definition CEO  First to offer unlimited recording India and South Asia MD of ESPN Star Sports prior to   First to be FCF positive joining Dish as its CEO.  Current President of DTH Operators Association  First to launch online TV for DTH viewers – ‘Dish on Line’ More than 27 years of experience & a successful track  record in turning around businesses for brands like Oral-B,  First to launch a sub-brand targeting regional language Nestle and Kellogg’s markets – ‘Zing’ R.C. Venkateish 8 *Shareholding pattern as on 21 st July 2014

Business Model Consolidated P&L Structure - FY14 Business Model 90% Subscription revenues Revenue  Upfront subsidy on Consumer premises equipment (CPE) 5% Box Rent 2% Bandwidth income  Advance inflows of subscription revenues 1% Advertising income Other income 2% 4% Employee benefit expenses  Average ARPU of Rs. 170 31% Programming and other cost Expenses 10% License fees 11% Other operating costs  Churn at 0.7% p.m. 7% Commission Selling and distribution 6% expenses 5% Other expenses  Implied average subscriber life of 12 years EBITDA 25% 9

Dish TV vs. Competition Dealer-Distributor Network Linear and HD channels Highest transponder capacity  377 400 346 326 291 250 300 Maximum content tie-ups 213  200 46 100 24 27 20 10 Maximum HD channels 10  0 Dish TV Tata Sky Airtel Sun Rel. Videocon Widest service network  Direct Digital Widest dealer-distributor network  Linear HD 90% of Total Revenue Transponder Dish TV Tata Sky Airtel Sundirect Reliance Digital Videocon Bandwidth Satellite NSS6, Asiasat 5 Insat 4A SES 7 Measat 3 Measat 3 Singtel ST-2 Number of 14 12 11 4+2 9 8 Transponders TP Bandwidth (MHz) 36,54 36 36 36 36 54 30% of Revenue 6 Zonal offices Total Bandwidth 648 432 396 216 324 432 (MHz) 14 Regional offices Source: Company & market data as on 30 th June 2014 10

Key Metrics Net subscriber base (mn.) 14.0 11.7 11.4 12.0 10.7 9.6 10.0 8.5 8.0 5.7 6.0 4.3 4.0 2.5 2.0 0.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 1QFY15 90% of Total Revenue Market share* Programming and other costs as % of subscription revenues 75% 80% 7% 19% 12% 64% 70% 15% 55% 60% 20% 43% 50% 37% 27% 34% 34% 34% 40% 30% 20% 10% Dish TV Tata Sky Sun Direct 0% Big TV Airtel Digital Videocon D2h FY08 FY09 FY10 FY11 FY12 FY13 FY14 1QFY15 Source: Company 11 Note : * Market share based on gross subscribers as on 30 th June, 2014 as per market estimates

Key Metrics (continued) SAC (Rs.) ARPU (Rs.) 3,000 200 2,505 170 163 2,383 157 2,224 151 2,500 2,127 1,996 150 2,035 132 138 150 1,800 1,800 131 2,000 1,500 100 1,000 50 500 - - FY08 FY09 FY10 FY11 FY12 FY13 FY14 1QFY15 FY08 FY09 FY10 FY11 FY12 FY13 FY14 1QFY15 90% of Total Revenue SAC/ARPU (months) 19.0 20.0 17.3 15.5 14.8 14.1 15.0 12.7 11.0 10.0 5.0 30% of Revenue 0.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Source: Company 12 Note : SAC & ARPU taken as Q4 data for respective years.

Strategy and Outlook 13