Direct to Home DTH Market

Direct to Home (DTH) Market – India

December 2009

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2DIRECT TO HOME (DTH) MARKET - INDIA.PPT

Executive Summary

Drivers:

�Growing middle-class and rising

disposable income

� Increasing television penetration and sale

of LCD monitors

�Price war and different package options

attracting consumers

�Advantage over traditional cable

operators

Market

Drivers &

Challenges

Trends

Competition

�Market is valued at INR 15 bn in 2008-09 and projected to reach INR 30 bn in 2009-10

�Estimated subscriber base of 15.17mn, expected to reach 36 mn in the next 5 years

�Current overall share of DTH households among total TV households of India is pegged at 13%

Challenges:

�Getting a share of the cable driven market and

facing the new age IPTV

�Trapped in TRAI’s content guidelines

�Demand supply gap for transponders in a 7

player broadcast market

�Cap on Foreign Investments

�Dish TV, the first company to enter is the largest player, controlling ~32.5% market share

�Steep competition has led to a surge in advertising spend to improve penetration

�Due to growing number of players in the market, Average Revenue Per User (APRU) will decline

owing to price war and discounts

�Technological Innovations

�Shift from price war to offering exclusive VAS

�Combined retail of LCDs and DTH connections

�Partnerships with movie distributors




•Market Overview

•Drivers & Challenges

•Trends

•Regulations

•Competition

•Key Developments




Direct-to-Home (DTH) has transformed the television

transmission in India

•TV channels are transmitted from the satellite

to a small dish antenna mounted on the rooftop

of the subscriber's home

•A DTH service provider has to lease Ku-band

transponders from the satellite

•The encoder converts the audio, video and data

signals into the digital format and the

multiplexer mixes these signals

•Unlike Cable TV, the broadcaster directly

connects to the user using Direct To Home

(DTH) network

DTH - The Concept Functioning of DTH

Source: BNP Paribas Analyst Report, Sep 2009, TRAI

Uplink Station Broadcaster

2000 2006

• 2001: Ban on KU

band lifted.

Guidelines by TRAI

for DTH operations

20082002

• 2003: First private

license granted to

Dish TV

2004

• 2004: DTH became

operative along

with DD Direct+

• 2006: DTH

subscriber base

touched 1 mn

• 2008: 15.17 mn

DTH subscribers

reported by 5 key

players

TV Dish with transmission decoder

Ku band satellite

Middlemen like

cable operators

are not in picture




DTH industry in India has looked upbeat in recent years but

remains a niche segment

•Estimated market value of INR 15 bn in 2008;

expected to reach INR 30 bn at the end of 2009

•In the Indian Pay-TV market, DTH penetration

is only 17.24% (June 09), reaching 15 mn out of

87 mn paid subscribers

•Current overall share of DTH households

among total TV households of India is pegged

at 13%

•The market has 6 private broadcasting

companies namely Dish TV, Tata Sky, Sun

Direct, Air Tel and Videocon and one Free to

Air operator – Doordarshan Direct

�New entrant: Videocon in May 2009

•60% of DTH subscribers reside in rural areas

and towns with a population under 1 mn and is

largely dominated by free-to-air Doordarshan

Direct service

Overview Segmented Pay TV Subscriber Base

Distribution across TV Households (HH)

Source: BNP Paribas Analyst Report, Sep 2009; Dish Corporate Presentation; Outlook “Rising In The North”, Jun 2009

2215

0

20

40

60

80

100

1

60

2006

3

63

2007

14

69

2008

2

70

2009e

4

69

2010e

Digital Cable

DTH

Analogue Cable

Subscribers in mn

61 64 64 64 64

0

20

40

60

80

1

2006

3

2007

9

2008

13

2009e

17

2010e

Cable HH

DTH HH

HH (%age)




DTH services has established its presence on a pan-India

basis and is dominated by the northern and western region

•North India and Western India together

contribute over 8 mn DTH subscribers, while

the southern market contributes 3 mn

•The states of Maharashtra, Goa, Punjab, Uttar

Pradesh, and Rajasthan are the leaders in DTH

subscription, contributing over 6.5 mn DTH

connections to the overall base

•Eastern India is an untapped market with

consumers looking for digital picture quality

preferring digital conditional access system

(CAS) over DTH due to its pricing

•The DTH potential in India is pegged at 80 mn

households, divided between the North and

the South almost equally

Indian DTH Market Major Geographical Regions

Source: Dish Corporate Presentation, KPMG-FICCI; Television Point “DTH players building up subscriber base from rural areas”, Sep 2009; Outlook “Rising In The North”, Jun

2009; Outlook Money “For The Couch Potato”, Dec 2008

More than 48% of DTH subscribers

Maharashtra

Rajasthan

Punjab

Uttar Pradesh

Sun TV dominating

the market in South




Subscription and lease rental are major sources of revenues;

Players are focusing on some key areas to increase revenues

Revenue Model

Source: Financial Express; FICCI-KPMG Press Release 2009; Display Search: India TV Market: TV's Emerging Land of Opportunity, 2009; India Television “DTH In India: A few

survival strategies”; Financial Express “Tata Sky changes ad-revenue model”, May 2008

Appropriate Content Exclusivity After Sales Service

• Offering appropriate

packages based on

regional demand

• Obtaining exclusive

rights for

broadcasting e.g.

sports events

• Quick installation,

minimizing billing

errors and reduce

signal disruption

First-mover

Advantage

• Being the first to

provide new

services towards

closing competition

Subscription Revenue Lease Rental Advertisements

• Advertisement revenue model

is changing

� Tata Sky moved from ‘flat fee’

model to the ‘cash per lead’

model

� Dish TV provides matrimonial,

jobs and payment services

• Earnings from renting out set-

top boxes (STB) and dishes to

subscribers

• Players have been providing

STB’s at subsidized rates

towards increasing subscriber

base in this highly competitive

market

• Revenue generated from

subscribers based on various

packages offered differing

from one another according to

the channels broadcasted

• Includes revenues from

various value added services

such as movie-on-demand

Key focus areas for operators to increase revenues




Programming cost and subscriber acquisition cost are high

in DTH market

• Programming cost is the largest cost for a DTH

operator

� Determined as a proportion of subscription revenue that

the operator collects from subscribers

• Growth in subscriber base is expected to lead to a fall

in advertising expenditure to 4% of overall revenues

by FY ’12

• On an average, the operators will take 7-8 years to

break-even

Overview

Operators Cost Structure

Subscriber Acquisition Cost

Source: BNP Paribus; DNA India “DTH is a common man's product: Tony D'silva”; Feb 2009

6%

13%

Programming Cost

40%

Other Operating Costs

20%Dealer Commissions

Employee Cost

5%

Administrative Cost6%

Transponder Rentals

10%

Advertisement

2,510Subscriber Acquisition Cost (SAC)

1,760Upfront Collected

4,300Total Cost

1,400Total of Other Costs Entailed

500Marketing Expenditure

1,450Cost of Set-top-box

1,450Cost of Dish, Card, Wiring, Customs

duty, VAT

2,900Total Customer Premise

Equipment Cost (CPE cost)

400

500

Cost (INR)

Installation cost

Parameter

Dealer commission

SAC is borne by the DTH players affecting their

profit margins substantially




•Market Overview


•Trends

•Regulations

•Competition

•Key Developments




Drivers and Challenges

Price war and different package

options attracting consumers

DTH advantage over traditional cable

operators

Drivers

The growing middle-class and rising

disposable income

Increasing television penetration and

sale of LCD monitors Cap on Foreign Investments

Trapped in TRAI’s content guidelines

Getting a share of the cable driven

market and facing the new age IPTV

Challenges

Demand supply gap for transponders

in a 7 player broadcast market




Rising middle income segment will be a key driver for

subscription acquisition of DTH providers

• The middle class population in India is expected to reach half a billion by 2030 and currently

comprises about 64% of total population

• Rise in disposable income of the working class coupled by the new digital wave will overlook the

price factor of DTH vis-à-vis cable

The growing middle-class and rising disposable income Impact

Source: McKinsey Global Institute “The ‘Bird of Gold’:The Rise of India’s Consumer Market”, May 2007

9%

7%13%

49%

23%

24

2005

15%9%

34%

33%

44

2015

24%

23%

34%

15%

3%

90

2025

Globals

Strivers

Seekers

Aspirers

Deprived9%

Aggregate Annual Disposable

Income (INR tn)

Per household annual

income (INR ‘000)

Core target

consumer

groups

>1000

500-1000

200-500

90-200

<90

1%1%5%

44%

49%

207

2005

1%2%

23%

43%

30%

244

2015

3%

12%

34%

33%

18%

281

2025

Total No. of Household (mn)




Rapidly growing television market is expected to boost the

DTH industry in India

• The television market, which is valued at INR 241 bn in 2008, is estimated to grow at 14.5 %

over 2008-13

• The number of TV households is forecasted to grow at 3.4% over 2009-13

• About 65% TV HHs have cable/satellite access� The untapped 35% hold a huge potential for DTH services

• Upgrade to LCD (Liquid Crystal Display) TVs has shifted viewer-ship trend to DTH/digital

broadcast

� Over Jan-Apr 2009, the market for LCD and plasma TVs grew by 81.6% over the same period last year

• Flat panel TVs with DTH connections are being retailed together as a part of a marketing

strategy

Increasing television penetration and sale of LCD monitors Impact

Rising TV Households TV Technology Market Share

142136129122116110103

0

50

100

150

2004 2005 2006 2007 2008 2009e 2010e

+5%mn

58

74869396

56

251373

0

20

40

60

80

100

41 43

CRT

LCD

2007 2008 2009e 2010e 2011e 2012e

%

Source: Financial Express “LCD, plasma TV sales grow more than 80%” Jun 2009; FICCI-KPMG” FICCI-KPMG Media & Entertainment Industry Report”2009; DisplaySearch

“India TV Market: TV's Emerging Land of Opportunity”, Aug 2008




Increased competition in a six-player oligopolistic market

fuelling growth

• Six private pay-DTH players of which Videocon entered in July 2009 making competition steeper

• Price war has lead to drop in upfront charges and subscription fees

• Wider channel package options are being priced to suit different customer segments

• Aggressive marketing by DTH operators is spreading product awareness and penetration in Tier

2 and Tier 3 cities

• Promotion of value added services like movies-on-demand, educational content, travel booking,

matrimonial etc also attracting subscribers

Price war and different package options attracting consumers Impact

Source: Tata Sky Corporate Presentation; India Study Channel “DTH Services in India”, Nov 2009

Fall in Upfront Charges

1,200

4,000

0

1,000

2,000

3,000

4,000

Aug 2006 Mar 2009

-33%

INR

44

8

910

Sun Tata Sky Dish TV Reliance Airtel

Number of Packages Offered

Increasing options

for consumers

based on varied

demand patterns




Limitations of the cable operators cause cable viewers to

switch broadcast medium

• Satellite transmission network in DTH enables digital picture quality

• Unlike cable operators, DTH operators also provides interactive value added services like movie

requests, job search engines etc.

• Cable industry does not have Right of Way (RoW) privileges, and is pulled over buildings and

tree tops unlike dishes leading to disruption

• Disturbance due to power-cuts at a cable operators location is avoided

• DTH services being satellite aided reach remote areas where cable/wires cannot penetrate

• Mobility at the time of shifting residence is possible

DTH advantage over traditional cable operators Impact

Source: BNP Paribas Analyst Report, Sep 2009




Threat of substitutes is the foremost challenge faced by DTH

operators

Getting a share of the cable driven market and facing the new age IPTV Impact

Source: DNA “Head-end In The Sky cleared with 74% FDI”, Nov 2009

• Cable operators have the advantage of industry establishment since 1992

• Heavy programming costs, subscriber acquisition costs and high taxes

price DTH higher

� While cable operators pay 4% revenue as taxes, DTH providers pay over 30%

• A recent 5% import duty on STBs has added to the costs of DTH operators

• Digital cable with a subscriber base over 1mn is a cheaper substitute

� A significant challenge for DTH as their offerings are similar

• Policy guidelines approved for Headend In The Sky (HITS), that digitally

transmits channels to the cable operators via satellite

� Relies on existing cable networks with no extra installations and therefore

comes cheaper

� HITS will operate on C-band as well as Ku-Band (so far used by DTH)

� Better picture quality likely as Ku Band is vulnerable to rain with weakens signal

strength

• High Broadband penetration makes IPTV a potential success

� Television signals sent over telecommunications line-a hassle free proposition

for end-user

� Customer can choose a program instead of taking a generic package in case of

DTH

Analogue Cable

Digital Cable

IPTV




Inability to provide exclusive content and limited

transponders affect the competitive edge of providers

• Competition in global DTH markets thrive on providing niche content

• TRAI prohibits a broadcaster from offering content exclusivity to a specific player

• The competition rests on pricing strategy alone which might shrink the industry

Trapped in TRAI’s content guidelines

• A transponder (Transmitter-responder) can beam 10-16 channels depending on MPEG2 or

MPEG4 technology

• The demand for new channels is increasing with 400 plus channels already in India

• Therefore, each DTH provider will need about 15-25 transponders and dedicated satellites

• Regulations permit operators to use only Indian satellites or foreign satellites approved and

leased by Indian Space Research Organisation (ISRO)

• In 2008-09, ISRO leased only 36 transponders

• Operators feel that to meet this demand supply gap, additional 72 transponders are needed by

2015

Demand supply gap for transponders in a seven player broadcast market

Impact

Source: Business Standard “Value Warrior”, Sep 2009; Livemint “ISRO to launch 3 more satellites to cover DTH demand”, May 2008

Impact

5677710

12

Sun DD DirectVideocon D2HBig TV Airtel DigitalTata Sky Dish TV

Ku band Transponder Usage by DTH Players




Foreign investments limited by Telecom Regulatory

Authority of India’s (TRAI) stipulations

• DTH is a capital intensive industry

� Hardware, CPE and capacity building account for the majority of the total investment required

� It takes about 6-7 years to break even

• Limiting foreign investment prevents cash constrained operators to expand operations

• Current DTH regulations limit FDI/NRI/OCB/FII to 49% in which FDI cannot exceed 20%

• On the other hand HITS, the competing digital technology broadcast platform, enjoys FDI cap of

74% which makes the competition uneven

Cap on Foreign Investments Impact

Source: DNA “Head-end In The Sky cleared with 74% FDI”, Nov 2009, BNP Paribas Analyst Report, Sep 2009




•Market Overview


•Trends

•Regulations

•Competition

•Key Developments




Key Trends

Shift from price war to

offering exclusive VAS

Combined retail of LCDs and DTH connections

Technological InnovationsPartnerships with movie

distributors

Trends




Technological upgrades for enhanced entertainment has

been a key emerging trend in the Indian DTH industry

Technological Innovations

Providing better

services through

cost effective

methods

• MPEG4 is a compressing and multiplexing video solution

• Electra encoders in MPEG4 allow 22-25 channels per transponder compared

to 15-17 on MPEG2

• Broadcasters therefore can provide greater number of channels with a single

transponder� Compression efficiency produces High Definition pictures at reduced energy

consumption

• Technology is used by Sun Direct, Big TV, AirTel Digital TV and Videocon

Adoption of MPEG4

Technology

• DVR is an upgrade of the existing STB with an inbuilt storage capacity to

pause, record and replay live television

• Tata Sky plus, Air Tel Digital TV and Hathaway Digital cable offer this high

end service

• The pricing is about 4 times that of the standard DTH STB

• Existing DVR owners watch an average of 1.3 hours of recorded TV and 2.9

hours of broadcast TV

• Comprises of upwardly mobile customers and is fast catching up

Digital Video

Recording (DVR)

• This interactive service allows viewers to switch between various angles of

camera coverage, widely used in broadcasting cricket matches

• Features include choice of language of commentary, player stats, ball

trajectory information and highlights on demand

• This service is offered by Tata Sky, Dish TV, Reliance Big TV� Big TV ( Jun ‘’09) partnered with ESPN to offer interactive cricket, a paid service during

T20 world cup

Multiple Angle Feed

Source: NDS Survey 2009; Business Standard “DTH operators may have to offer inter-operable boxes”, Aug 2009; One India “Watch world cup in all camera angles”, 2007




VAS provided by players is expected to develop the market

in terms of innovation and revenue generation

• Competition in DTH market is primarily in the form of price war with no content exclusivity

• VAS offered as separate pay channels gives DTH operators a competitive edge over the other

• Current share of VAS in total subscription revenue is under 2%

• Some of the services like Big TV’s iGames, iCooking, iNews and iAstro are being offered free for a

certain tenure before being converted to paid services

• Similarly Dish TV offered a bargain of free STBs if the customer paid for the VAS

Shift from price war to offering exclusive VAS

Differentiator in

a highly

competitive

market

Source: Reliance Press Release; BNP Paribas Analyst Report, Sep 2009; Company Websites; DNA “Dish TV offers free set-top box seeking an edge over its rivals” May 2008

• Reliance Money (ISTOCK for portfolio management); CNN-IBN (iNEWS); ESPN

(Icricket)

Big TV

• Pizza Hut (iPIZZA-ordering pizza on DTH); Makemytrip (iTravel); ESPN (iSport)AirTel

Digital TV

• Hungama Digital Media (Active Mall for mobile shopping experience); Ferns n

Petals (Flower delivery service); 24X7 Guru.com (Active Wiz Kids); NDTV Good

Times ( Active Cooking for latest recipes); Ganesha Speaks (Active Astro for

interactive astro-forecasts); Star News (Active Star News for interactive news)

Tata Sky

• Monster.com (MonsterJobs Active for job search); ICICI Bank (ICICIActive for bank

service information); Shaadi.com (Shaadi Active,a matrimonial); Yaatra.com

(Travel Active for travel planning); Indiatimes.com (Mobile Active for mobile

services and downloads); Zee Sports (Sports Active); Zee News (News Active)

Dish TV

Channel/OfferingOperator

Shift from price war to offering exclusive VAS




Tie-ups with TV manufacturers and movie distribution

houses has been growing

• DTH operators tied up with LCD manufacturers to offer attractive schemes to promote sales

� Dish TV tied up with LG where purchase of the LCD, the DTH connection came free

� Tata Sky and Samsung offered a scheme under which the size (in inches) of the LCD purchase would equal

the discount given. For eg: a 21 inch TV would be eligible for a 21% discount

� Reliance Big TV in association with LG electronics offered discount on LCD sets along with a free 3 months

subscription of Big TV’s Lite pack or South Delight pack of channels

• Being complementary utilities, the sale of LCDs pushed the sale of DTH connections


• Reliance Big Pictures, Percept Pictures, UTV Movies and Dharma Productions tie up with DTH

providers to release movies on DTH medium

� Main aur Mrs Khanna premiered on Dish TV and Big TV. Other recent movies launched include Kaminey, Rock

On, Wake Up Sid etc

• Dish TV has entered into 50:50 revenue-share deal with the production houses

• A family of four have to spend as much as INR 1,000 to see a movie in multiplex. But with Movie

on Demand service on DTH, they can watch a movie within 2-3 weeks of its release at a very little

price (INR 50-150 per movie)

• Currently, under 5% subscribe to movies on demand and a DTH operator makes about INR 30 mn

from subscription revenue of a new film

• With DTH subscribers expected to reach 20 mn by 2010, DTH operators can generate about INR

100 mn of revenue from movie on demand if even merely 5% subscribe to it

Partnerships with movie distributors

Combo offers

positively

impacted sales

Symbiotic

relationship

between players

and distributors

Source: Business Standard “DTH sparks new row between producers and multiplexes” Nov 2009, “RCom to start DTH with a bang” May 2008; DNA “DTH emerging channel

for movie releases” Oct 2009; Display Search





•Market Overview


•Trends

•Regulations

•Competition

•Key Developments




Key Regulations

Customs and Excise DutyTariff Regulation

High TaxationInteroperability of STB

Regulations




DTH industry is one of the most highly taxed areas in media

space

• Cable operators pay only 5% of their revenues as taxes, while DTH industry is heavily taxed

• License Fees: 10% on adjusted gross revenue (expected to be reduced to 6% but is being

delayed)

• Service Tax: 10.2% on gross subscription revenue

• Entertainment Tax: 0- 30% depending on the state/territory (30% tax in Uttar Pradesh

makes business unviable )

• Value Added Tax (VAT): 12% on the cost of hard ware

• New Direct Tax: 2% of gross assets

• Apart from these, Octroi, corporate tax etc. are additionally levied

Customs and

Excise Duty

• Sale of Set Top Boxes (STB) is one of the key revenue generators for operators

• Excise duty on STBs were exempted in 2003 to facilitate introduction of conditional access

system (CAS) in the country

• In the Budget 2006, the exemption on excise duty was withdrawn, but customs duty was

reduced from 15% to Nil. However, there was no corresponding reduction of customs duty on

inputs used in the manufacturing of STBs

• In budget for fiscal 2009-10, government withdrew the custom duty exemption on STB for

television broadcasting and imposed 5 % custom duty on import of STB and allows import of

inputs at 5%

High Taxation

Source: MEDIANAMA: “TRAI on DTH: Local Advertising, Value Added Services, Radio; Content Vs Carriage” Mar 2009; BNP Paribas Analyst Report Sep 2009; Financial

Express “Direct-to-home the story so far...” Aug 2008




Lack of explicit tariff regulations will impact the industry

growth

• No explicit tariff regulation has been provided by the Telecom Regulator Authority of India

(TRAI) for DTH services

• Tariff rates charged from the DTH operator by the broadcaster are 50% lower than the rates

charged from the local cable operator in Non-CAS areas

• CAS operators have to pay INR 5 to the broadcaster per channel while DTH operators pay INR 2.5 per

channel

• TRAI has also mandated broadcasters to offer their channels on an individual (a la carte) basis

to DTH operators and not insist on the entire bouquet

• DTH operators are demanding further reduction in tariff on ground that -

• CAS and cable operators are under reporting their subscriber base as they lack transparency

• CAS and cable operators do not have to pay huge license fees

Tariff Regulation

Interoperability

of STB

• Currently only MPEG2 users are commercially and technically interoperable according to

mandates

• MPEG4 users who have costlier STBs have not yet received guidelines for interoperability

• Laying down regulations could affect the churn rate and increase expenditure of DTH operators

Source: MEDIANAMA: “TRAI on DTH: Local Advertising, Value Added Services, Radio; Content Vs Carriage” Mar 2009; BNP Paribas Analyst Report Sep 2009; Financial

Express “Direct-to-home the story so far...” Aug 2008




•Market Overview


•Trends

•Regulations

•Competition

•Key Developments




Competition in the DTH market has grown with all six

players on a subscriber acquisition spree

•Oligopolistic market structure

•Competition is high as market is saturated

with six private players and one free-to-air

provider namely DD Direct

•Steep competition has led to a surge in

advertising spend to improve penetration

•With greater number of players in the market,

Average Revenue Per User (APRU) will decline

owing to price war and discounts

•DD Direct Plus is planning to move to a paid

model increasing competition

�Plans on offering 144 pay channels, 4 hi-definition

channels and 50 radio channels

•The scope for new entrants is limited as the

challenge posed by high cost of CPE and the

high costs entailed for leasing transponders

Overview Market Share by Volumes

Source: Business Standard: “BIG TV emerges as the fastest growing DTH player in South” Jan 2009

6.7%

Sun Direct

10.4%Big TV

32.5%

Dish TV

25.8%

Tata Sky

24.5%

AirTel Digital TV




Analysis of the various DTH players in India, their offerings

and market presence

Source: Company Website; Televisionpoint “DTH players building up subscriber base from rural areas” Sep 2009

475None1112Interactive Features

1201138113075135Channels in Base

Package

15011090110125113Base Package (INR)

None

None

MPEG4

1,490

200+

1.7

Sun

Astro-

Malaysia

MPEG4

1,250

200+

4.0

Star

SKY TV

MPEG2

2,599

190

4.2

ZEE

Dish TV (US)

MPEG2

1,790

240

5.3

None

None

MPEG4

1,750

150+

1.1

170Total channels

1,790CPE + Installation

Cost (INR)

NoneGroup Channels

NASubscribers (mn)

Players

Compression

TechnologyMPEG4

International

PartnersNone




Players in the Market (1/6)

Headquarters Noida

Established Oct 2003

Financials FY ’09: Revenue - INR 7.4 bn; Loss – INR 4.8 bn

Key People• Subhash Chandra – Chairman

• Jawahar Goel – MD

Company Snapshot: Dish TV

Corporate Information Packages Offered

Across 28 cities150 -204Child

3617 (p.a.)

283

190

113

Cost (INR)

155 ChannelsGold (2)

Packages Description

Silver (2) 135 Channels

Platinum (2) 185 Channels

Titanium 188 channels

Business Highlights Interactive Services Offered

• Movie-on-Demand – Watch movies any time on demand

• Shaadi Active and Jobs Active - Matrimonial & job search

• Travel Active - Planning tours on TV via Yatra.com

• Mobile Active - Downloading mobile services

• ICICI Active - TV banking with ICICI Bank

• Bhakti Active - Active worship

• Astro Active - Astro forecasts and predictions

• Sports & News Active - Interactive experience of sports/news

• Multilingual services - Address regional language needs

• Offers largest number of channels with focus on strong

regional content in linguistic zones

• It began providing up-front subsidy on set top boxes to

acquire subscribers

• Large sales and distribution network - 600 ‘Dish Shoppees’ to

provide demo’s to prospective users (Jun ‘09) and wide reach

to 6,600 towns and 48,000 dealers (Sep ‘09)

• Received a PE investment of INR 4.6 bn through GDR from

Apollo Management in Nov ’09

• Heavy capex investment has enabled the company to deliver a

high end audio-video quality

Source: Press Articles; Company Website Note: Rates are on a monthly basis





Headquarters Mumbai

Established Aug 2006

Financials FY ’09: Revenue - INR 8 bn

Key People • Vikram Kaushik – CEO & MD

Company Snapshot: Tata Sky



75/95/109/139 channels125/200/260

/270

South Starter/ Value/

Saver/Jumbo

63 channels160Super Hit

124 channels225Super Value Kids

5500 (p.a.)

275

Cost (INR)

124 channelsSuper Saver


Annual Mega Pack 172 channels, 12 movies

• Active Mall - Shopping on TV

• Active Wizkids/Learning/Topper - Learning for kids

• Active Stories - Stories on TV

• Active Games - Interactive games

• Active Darshan - 24X7 darshan of Shirdi Sai Baba, Mumbai’s

SiddhiVinayak, ISKCON and Kashi Vishwanath

• Active Cooking - Recipes anytime

• Active Astrology - Daily forecasts

• Active Star News - Instant news

• Showcase - Order latest movies and watch multiple times

• Most popular service provider among high income households

• Received a PE investment of INR 2.5 bn from Temasek

• The company, till date, has invested INR 250 mn on

promotional activities

• Changed its advertising model where advertisers will pay for

the number of consumers who have shown interest in their

products

• It is estimated that the company will invest INR 40 bn to

create necessary infrastructure to support its expanding

customer-base






Headquarters Chennai, India

Established Dec 2007

Financials NA

Key People• Kalanithi Maran – Chairman & MD

• Tony D’Silva – COO

Company Snapshot: Sun Direct


Business Highlights

Freedom Kannada

Freedom Malayalam

Freedom Telegu130+ channels

990 for

9months

440 for

4months

Freedom Tamil

Non-south pack

925 for 7

months

525 for

4months

Shine Pack

Bengali Shine Pack

Oriya Shine Pack

J&K Shine Pack

300

Cost (INR)

30 channels with active Base

pack

Jumbo Pack North


Jumbo Pack South

• The four states of Tamil Nadu, Kerala, Karnataka and Andhra

Pradesh account for 70% of its subscribers

• Plans on increasing its marketing budget from INR 1.2 bn to

INR 1.5 bn in FY10

• It plans on constantly investing in customer equipment,

hardware and capacity building

• Plans on capitalizing on its major strength that it has access to

low cost content from group company Sun Network

• Towards expanding its operations across India and plans on

investing INR 20 bn on the development of infrastructure






Headquarters New Delhi, India

Established Aug 2008

Financials NA

Key People • Arun Kapoor – President

Company Snapshot: Big TV



165 for SI, 152 for RoI280/270Diamond (2)

81 channels90Value Pack

111 channels135Bronze pack

137 for SI, 123 for RoI170/180Silver(2)

340,315

210/225

Cost (INR)

150 for SI, 138 for RoIGold (2)


Platinum (2) 169 for SI, 155 for RoI

• iSTOCK - Information on stock market with features like stock

ticker, latest mutual fund updates etc.

• iNEWS - Instant access to news headlines

• iASTRO - Comprehensive daily and monthly tarot, numerology

and zodiac predictions

• iCRICKET - Active during the ICC T20 World Cup 2009

• iGAMES - Featuring Kurakku, Theivin Monkeys, Buzz Words,

Jinja Ninja, Solitaire, Table Football, Happy Word Time and

Pool

• Plans on increasing its marketing spend to about INR 1.6-1.8

bn

• Tied up with a Warner Brother channel and Korean and

Russian channels for global content

• Attracting customers by reducing price of its ay-per-view (PPV)

prices of premiere (new) movies by 50% in comparison to its

competitors

Source: Press Articles; Company Website Note: Rates are on a monthly basis; SI: South India, RoI: Rest of India





Headquarters Gurgaon, India

Established Oct 2008

Financials NA

Key People

• Ajay Puri – CEO

• Atul Bindal – President (Telemedia

Services)

Company Snapshot: Airtel Digital TV



Mega + 7 channels 364Ultra

110 channels127Super Value

Super Value + 8 channels160New Value

New Value + 37 channels221Economy

110-400

304

Cost (INR)

Economy + 22 channelsMega


South Packages(6)Range of 186 channels with the

option of up to 3 south top ups

• Plans on adding a net 1.6 mn new DTH subscribers by March

2010

• It is expected to target the rural market because of its large

distribution network created by its dominant presence in the

telecom space


• iAstro - Daily astro forecasts

• iLearn – For young students to revise classroom lessons

• iMatinee - Buy tickets on TV for latest movies on multiplex

• iNet - Internet experience on TV

• iNews - View all sections of news on one screen

• iSports - Watching sports with match details & player stats

• iTravel - Planning vacations on TV through Makemytrip

• iPizza - Ordering pizza at the click of the TV remote

• iShop - Purchasing a variety of discounted products though TV





Headquarters Mumbai, India

Established May 2009

Financials NA

Key People• Venugopal Dhoot – Chairman

• Anil Khera – CEO

Company Snapshot: Videocon D2H



130 channels for Andhra

Pradesh (AP)150AP Gold

120 channels for RoI150Gold

160 channels for RoI275Diamond

130 channels for SI150South Gold

275

275

Cost (INR)

170 channels for SISouth Diamond


AP Diamond 170 channels for AP

• DTH services are offered through its subsidiary Bharat

Business

• Plans to invest INR 10 bn over 2009-2011 on marketing

activities

• Expects to boost its DTH subscriber base via large scale

television sales by offering combo-packs (selling DTH packages

with television sets)

Source: Press Articles; Company Website Note: Rates are on a monthly basis; SI: South India, RoI: Rest of India

• Active Darshan - Online religious visit and aarti at holy places

• Active Travel - Travel planning, ticket booking and

accommodation

• Active Cooking - Recipes and cooking tips from master chefs

• Active Health and Fitness - Channel on fitness training and

yoga




•Market Overview


•Trends

•Regulations

•Competition

•Key Developments




Key Developments

EchoStar Corporation, a US based company which sells satellite television services under the Dish Network brand, plans on entering the Indian market by picking up a stake in an existing DTH company.

Sep 2009

Reliance Communications, which entered the market with their brand Big TV, plans on expanding their portfolio in this space by offering high definition (HD) television content to customers apart from launching premium IPTV services in select cities.

Nov 2009

Towards expanding its product portfolio Dish TV India is developing a new technology to beam channels in vehicles for intra-city travel in metros at special subscription rates. In 2008, the firm had launched Dish TV mobile, which airs all channels, can be fitted in large cars and SUVs for inter-city travel. This is however being used only by Kingfisher Airlines, the Railways and Indian Navy.

Apr 2009

Date Development

Jun 2009 Videocon, which has recently entered the DTH market, plans on targeting 1.5 mn subscribers for its direct-

to-home (DTH) service in its first year of operation. It invested INR 50-60 mn on developing new liquid

crystalline design televisions that can directly receive DTH signals without set-top boxes.

Apr 2009 BIG TV, the DTH arm of Reliance ADA Group, launched Premium Express Service across India. This is an unique after-sales service initiative from BIG TV with the primary objective to cut down market response time. It is targeting on addressing customer queries and resolve customer problems within 2 hours.

Source: Press Articles




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