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.

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 About us
•India’s pioneer and Asia
Pacific’s largest* DTH
company.
Asia’s largest DTH
GROUP
Having diverse presence across
media, packaging, entertainme
nt, technology enabled
services, infrastructure
development & education.
•Consistent market leader •Promoted and led by
with 31% absolute share Subhash
currently. Chandra, Chairman, Essel
Group. A thought leader
and pioneer in most of his
businesses.
Consistent Leader
Promoted by
India’s media
pioneer
India’s first & largest, fully
integrated, media &
entertainment company.
3 * Ranked by DTH Subs (Y/E Dec. ‘09) – MPA Report 2010
Indian DTH industry

4
 Journey so far
25 DTH SUBS CROSS
VOLUNTARY DIGITIZATION
BY CABLE OPERATORS . 20 MN MARK

20 DTH SUBS BREACH THE 2MN

MARK IN A 2 PLAYER MKT.

DISPUTE OVER CONTENT .

SETTLEMENT BTW DISH & STAR DTH SUBSCRIBER
SUBSCRIBERS IN MN

BASE AT ~10 MN
15
DIGITIZATION
TRIGGRED,
CAS MADE
MANDATORY IN
SELECT
10 PART OF METROS DISPUTE WITH SUN TV
OVER CONTENT. SETTLED. LAUNCH OF DTH
LAUNCH OF DTH SERVICE LAUNCH BY SERVICE BY VIDEOCON
BY DISH TV IN SELECT SUN DIRECT
MARKETS
5 LAUNCH OF
DTH SERVICE LAUNCH OF DTH
BY TATASKY SERVICE BY AIRTEL
LAUNCH OF
RELIANCE BIG TV
0

DISH Subscribers DTH Subscribers

5
 Opportunities galore!

Key statistics: 2010

300 95%
264 269
256
250 249
90%
Total HHs 232 mn. 223
232
242
88%
89% 90%
91%
200 86% 165 170
153 159 85%
TV HHs 141 mn. 150 134 141
82%
147
135
142 149 155
80%

Million
126
100 105 116
TV Penetration 61% 78%
50 75%
C&S HHs 116 mn. 0 70%
2009 2010 2011E 2012E 2013E 2014E 2015E
C&S Penetration (in TV HHs) 82%
Total HHs TV HHs
DTH Subs * 30.6 mn. C&S HHs C&S Penetration

 Increasing TV HHs; likely to be 170 million, 64% penetration, by 2015.

Developed countries average penetration at more than 97%. China at 98%.

 C&S penetration: huge opportunity, likely to be 91% by 2015.

 DTH to be the key driver & direct beneficiary of increasing C&S households!
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Source: MPA 2010 report * Up to 31/12/10. (Source: market est.) C&S implies cable TV, DTH & IPTV
 DTH growth projections…
MPA 2010 48 45
FICCI Frames 2010 43
50 45 39
45 25% CAGR 2009-13 41 40 25% CAGR 2009-13 35
40 36 35 30
35 31
30 24
30 24 25
25 17 16
20 20
15 15
10 10
5 5
0
0
2009 2010 2011p 2012p 2013p 2014p 2015p
2009 2010p 2011p 2012p 2013p 2014p
DTH Sub. Base (mn.)

70% 65.7% 65.5% 65.0% 64.5% 63.9% 63.2% 62.4% 61.5%

60%
50% 26.8% 31.2%
24.3% 28.8% 30.1%
40% 20.9% 25.7% 28.3%
16.4% 20.7% 23.6% 27.2%
30% 11.2%
12.8% 17.2%
20% 8.3%
10%
0%

% Cable HHs to TV HHs % DTH HHs to TV HHs % DTH HHs to Pay TV HHs
Source: MPA 2010
Cable HHs include analogue & digital cable 7 Pay TV includes Cable + DTH + IPTV
 Outperformed !!

MPA 2010 Report - DTH subscribers in India to reach 24 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 – December 2010 – 12.1 million* DTH subscribers added

taking industry size to 30.6 million!

Record 2 million subscribers added during November „10 !

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* Source: Dish TV actual & Market Est.
 Outperformed !!
DTH industry scale-up
30.6
18.4
35 Subscribers in Mn.
30
25 10.3 Source: Dish
20 TV actual &
15 4.3 industry est.
10 1.5
5
0
2006 2007 2008 2009 2010 - Upto
December

 DTH driving digitization & growth in pay-TV HHs.

 DTH penetration already at 26% of C&S HHs; ahead of estimates.

 An estimated 58% of all new C&S subscribers up to 2015 expected to opt for a DTH connection.*

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.

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* Source: MPA - APAC Pay TV & Broadband Report 2010
 Digitizing with addressability
100%
92% Cable subscription to broadcasers DTH subscription to broadcasters
90%
80% 83%

70%
67%
60% 56% 53%
51%
50%
44% 47% 49%
40%
30% 33%

20%
17%
10% 8%
0%
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
• Total foreign investment limit of 49% (sub limit ceiling of 20% for FDI) *
• Uplink centre to be in India

Licensing • 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 • Subscribers can be offered STBs on Rent/Hire-Purchase/Sale

quality • Mechanism to be in place for handling customer complaints & grievances

Inter- • Broadcasters have to provide content to all distribution platforms; pricing flexible
connect • Prohibits broadcasters from seeking guarantee for minimum number of subscribers

Reference • Pricing information on content of the broadcaster

inter- • Maximum 50% of non-CAS cable rates
connect
• A-la-carte offering to be allowed

* As per TRAI’s (Telecom Regulatory Authority of India) recommendation dated 30th 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.
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Dish TV – market leader in DTH

12
 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.

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 Key strengths
Brand

Strong Brand presence and Brand recall.

Market Leadership
Largest subscriber base amongst all six players; currently at 31%.
Carried and distributed by most third party dealers and distributors.

Content

Highest number; more than 250 channels & services and growing.

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 16 KU
band transponders equivalent.
‘

14
Highest Bandwidth

15
Highest Bandwidth

16
Highest Bandwidth

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 Select key management personnel
Subhash Chandra Promoter – Essel Group of Companies. He is the
Non Executive Chairman pioneer of the Indian television industry and recipient
of numerous honorary degrees, industry awards and
civic honours. Profile - Chairman.pdf
Jawahar Lal Goel
Managing Director 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
R.C. Venkateish
CEO 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 Kapoor
COO 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.
Rajeev Dalmia
CFO A qualified Chartered Accountant, Rajeev has been
leading the finance department since January, ‘07.

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Dish TV – now

19
 Market leading share
Dish TV continues to lead with the highest market share amongst all 6
players

17% 9%
16%
20%
7%

31%

Dish TV Tata Sky Sun Direct

Big TV Airtel Digital Videocon D2h

Source: Dish TV actual & industry est.

(31/12/10) 20
 Consistent leadership
Dish TV – Increasing number of subscribers Dish TV - Market share on total subscriber base

10 35 80%
9.4
75% 30.6
8.3 30 70%
7.7 26
8 7.5 60%
6.9 6.8 25 23
6.4 6.2 20.7 50%
5.9 5.7
6 5.5 20 18.4
5.1 5.3 42%
5 40%
4.7 4.6
4.3 15 35% 33%
4 33% 32% 31%
4 11.1 30%

10 7.5 8.3 9.4

6.9 20%
6.4
4.7
2 5 3.6
2.7 10%

0 0%
0 Dec. '07 Dec. '08 Dec. '09 Mar. '10 June '10 Sept. Dec. '10
Q3 FY Q4 FY Q1 FY Q2 FY Q3 FY Q4 FY Q1 FY Q2 FY Q3 FY '10
09 09 10 10 10 10 11 11 11
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.
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 Key business metrics
160 150 Average Revenue Per User (ARPU)
142 142
137 132 139 135 138 139 139

 ARPU breaks out of a five quarter flattish

trend !
`

 Increasing traction in middle level

80 subscription packs.
Q4 FY 09

Q3 FY 11
Q2 FY 09

Q3 FY 09

Q1 FY 10

Q2 FY 10

Q3 FY 10

Q4 FY 10

Q1 FY 11

Q2 FY 11
Subscriber Acquisition Cost (SAC)

3000 2832
2505
2601 2487 2635
2477 2383
2147 2083 2142
2000  Focus on reducing subsidies.
`

1000  Aggressive competition at the acquisition

front resulted in marginally higher box
0 subsidies.
Q4 FY 09

Q3 FY 10

Q2 FY 11
Q2 FY 09

Q3 FY 09

Q1 FY 10

Q2 FY 10

Q4 FY 10

Q1 FY 11

Q3 FY 11

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Source: Company ARPU = (Subscription revenue + activation charges) / Avg. subscribers during the period; SAC = Subsidy on STB+80% of
marketing expenses + Commission to dealers
Driving up ARPUs – marketing initiatives

Silver pack made dormant. Price increase in three out of five packs.
Constant marketing initiatives to create better value proposition in higher ARPU packs.
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Financials

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 Encouraging performance
Operating Revenues - Annual EBITDA Margins - Annual

12000 10848 20% 8.7%

FY 08-10 CAGR 62.0%
10000 0%
7377 FY 07 FY 08 FY 09 FY 10
8000
.

-20%
` Mn

6000
4127 -40% -18.3%
4000
1909 -60%
2000

0 -80% -53%
FY 07 FY 08 FY 09 FY 10
-100%
-97%

Operating Revenues - Quarterly EBITDA & EBITDA Margins - Quarterly

Q4 FY 09
Q3 FY 09

Q1 FY 10

Q2 FY 10

Q3 FY 10

Q4 FY 10

Q1 FY 11

Q2 FY 11

Q3 FY 11
4000 3732
3261
3032 3043 800 17.9% 20%
2775 15.3%
3000 2575 13.2%
2467 600 10.6% 15%
9.9%
` Mn

6.4% 10%

667
4.8%
` Mn

2000 400
2% 5%

498
400

322
200

255
0%

157

134
42
1000
0 -5%
-10%
-389

0 -200
-15%
Q1 FY 10 Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY 11 Q2 FY 11 Q3 FY 11 -400 -20%
-600 -20% -25%
25
 Fixed content cost driving margins

Content Cost Contribution Content Cost (% Subs Revenue)

3500 80%
71% 73%
70% 61%
3000 70%
61% 61%
60% 61% 59%
54% 60%
2500 54% 57% 58%
54%
46% 46% 50%
2000 40% 41% 46% 43%
` mn.

39% 39% 42% 39% 40%

39%

1862
1500 30%

1638
1437
29%

1298
1150
30%

1086
27%

1023
588
540
529

1000

971
20%
319
234

500
202

10%
502 646 755 804 867 929 670 881 925 986 1,001 1,060 1,062 1,229
0 0%
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 Dec-10

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 Summary financials
Quarter ended Dec '09 March '10 June '10 Sept '10 Dec '10
Gross operating revenue 2775 3032 3043 3261 3732
Expenditure 2659 2683 2721 2763 3065
EBITDA 116 349 322 498 667
Add: Other income 11 5 69 25 17
Less: Depreciation 779 846 889 843 902
EBIT -652 -492 -498 -320 -218
Less: Financial expenses 110 106 133 131 225
PBT -762 -598 -631 -451 -443
Provision for tax 0 0 0 0 0
PAT -762 -598 -631 -451 -443
Operating Metrics Dec '09 March '10 June '10 Sept '10 Dec '10
Subscribers added (mn.) 0.55 0.44 0.64 0.76 1.1
SAC (Rs/subscriber) 2477 2383 2147 2083 2142
ARPU (INR) 135 138 139 139 142

** HITS operations discontinued w.e.f. 1Q FY11.

Source: Company Financials. All figures in ` mn. except mentioned otherwise.

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Way forward

28
Growth beyond just subscriber numbers

Continuous
focus on:

Sustained
Content
product enrichment
innovation to
Augmenting Customer care
retain
revenue
subscribers and
contribution Brand building
expand category
through
Expand Technology
innovative value
customer base
added services and
with focus on
leadership
Distribution
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Thank you

30
Questions

31