Market Research Report : Direct to Home (DTH) Market in India 2012

Direct to Home (DTH) Market IndiaDirect to Home (DTH) Market – India

February 2012

Executive Summary

MarketDTH market was valued at INR A bn in 20XX and is projected to reach INR B bn by 20XXEstimated subscriber base of C mn, expected to reach D mn in the next E yearsCurrent overall share of DTH households among total TV households of India is pegged at f%

Drivers & Challenges

Drivers: Huge market potential, Emerging middle‐class and rising disposable income, Increasingtelevision penetration and sale of LCD monitors, Price war and different package optionsattracting consumers, DTH advantage over traditional cable operators, Complete Digitization ofTV services, Growing Rural Market and Increasing advertising revenuesChallanges: Getting a share of the cable driven market and facing the new age IPTV, Demand

l f t d i 7 l b d t k t T d i TRAI’ t t id li

Technological InnovationsShift from price war to offering exclusive VASC bi d t il f LCD d DTH ti

supply gap for transponders in a 7 player broadcast market, Trapped in TRAI’s content guidelinesand Cap on Foreign Investment

Trends

Regulations

Combined retail of LCDs and DTH connectionsPartnerships with movie distributors

Interoperability of STBHigh TaxationTariff Regulationg

CompetitionMajor Players

Player 1 Player 2 Player 3

Tariff RegulationCustoms and Excise Duty

2DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT

pPlayer 4 Player 5 Player 6

•Market OverviewMarket Overview

•Drivers & Challenges

T d•Trends

•Regulations

•Competition

•Strategic Recommendationg

•Appendix


DTH industry in India has looked upbeat in recent years but remains a niche segment

•DTH, although niche, has been the fastest growing segment in the pay TV industry

Overview Market Size and Growth (2010‐15e)

250• DTH penetration in India is expected to double to a% by 20XX

• Current overall share of DTH households among total TV households of India is pegged at b%

G f I di ’ i f l di i i i 50

100

150

200x%

•Government of India’s aim for complete digitization of TV broadcasting by 20XX has provided ample growth opportunities for DTH players

• The market has C broadcasting companies namely Player 1 Player 2 Player 3 Player 4 Player 5 and

Market Share (2011)

0

50

20XXe20XXe20XXe20XXe20XXe20XX

Player 1. Player 2, Player 3, Player 4, Player 5 and Player 6 and one Free to Air operator – Player 7

•DTH players incur high costs which directly affects their profit margins Copyright tax, entertainment tax, entry fee, license fee and Player 3

Player 2

Player 1

other taxes constitute y% of revenue earned by DTH players

Subscriber acquisition costs, which were originally as high as INR D, currently ranges between INR E ‐ F and is expected to fall further on account of stabilization in the

Player 6

Player 5

Player 4


price wars and reduction in prices of se t top boxes

Source:



T d•Trends

•Regulations

•Competition


•Appendix


Drivers and Challenges – Summary

Drivers

Low Penetration

Emerging middle‐class and rising e g g dd e c ass a d s gdisposable income

Increasing television penetration and sale of LCD monitors

Price war and different package options

Challenges

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

D d l f dPrice war and different package options attracting consumers

DTH advantage over traditional cable operators

Demand supply gap for transponders in a 7 player broadcast market

Trapped in TRAI’s content guidelines

Complete Digitalization of TV services

Growing Rural Market

Cap on Foreign Investments

Increasing advertising revenues




Trends•Trends

•Regulations

•Competition


•Appendix


Trends

Partnerships with movie distributors Technological Innovations

Key Trends

Combined retail of LCDs and DTH connections

Shift from price war to offering exclusive VAS




T d•Trends

•Regulations

•Competition


•Appendix


Key Regulations

Interoperability of STB High Taxation

Regulations

Tariff Regulation Customs and Excise Duty




T d•Trends

•Regulations

•Competition


•Appendix


Public: Domestic Company – Player 1 (1/3)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Products and Services

Ticker Symbol

Stock Exchange

Head Office

Key People


N D i ti

Category Products/Services

Category 1

Name Designation

Mr. A

Mr. B

Mr. CSAMPLECategory 2


Mr. D

Source:

SAMPLE

i i l S h K i


Financial Snapshot Key Ratios

Profit / Loss

Total Income

600 100

ProfitINR bn

Total IncomeINR bn

Particulars y‐o‐y change (2011‐10)

2011 2010 2009 2008

Profitability RatiosOperating Margin

0

200

400

0

50

20XX20XX20XX20XX

Net MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on Assets

SAMPLE

Financial Summary

• The company incurred a net profit of INR X mn in FY 20XX, as compared to net profit of INR Y mn in FY 20XX

• The company reported total Income of INR A bn in FY 20XX, registering an increase of b per cent over FY 20XX

Return on Fixed Assets

Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)

Interest costs (% of Sales)

SAMPLE registering an increase of b per cent over FY 20XX• The company earned an operating margin of C per cent in FY 20XX a decrease of d percentage points over FY 20XX

• The company reported debt to equity ratio of Z in FY 20XX, a decrease of W per cent over FY 20XX


Liquidity RatiosCurrent RatioCash Ratio

Leverage RatiosDebt to Equity Ratio

b i l iFinancial Summary

Indicators Value (18/01/2012)Market Capitalization (INR )

Total Enterprise Value (INR)

EPS (INR)

Debt to Capital RatioInterest Coverage Ratio

Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset Turnover


EPS (INR)

PE Ratio (Absolute)Working Capital TurnoverCapital Employed Turnover

Improved DeclineSource:


Key Business Segments Key Geographic Segments

100%

Segment 3Segment 2Segment 1

100%22%1%4%6%

Region 1 Region 3Region 2

0%0% 1%2%0%

50%

3%

97%

4%

96%

3%

96%

2%

96%2%

0%

50%76%

22%

99%96%

%

94%

6%

Key Recent Developments

2008 201120102009 2011201020092008

Description News

Overview• Player 1 operates in the DTH industry through its brand X• Its digital subscriber base touched A mn mark in September 20XX

• Introduction of product B, an enhanced Set Top Box (STB) with capability to record live

SAMPLEProduct Innovation

p , p ( ) p ytelevision, anytime, anywhere using mobile phone

• Country’s first product C was launcheed

Award & Recognition • Award 1

14

SAMPLE DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT

Source:

Private: Domestic Company – Player 2 (1/3)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

W b i


Website

Year of IncorporationHead Office

Key People


Category Products/Services

Category 1

N D i tiName Designation

Mr. A

Mr. B

Mr. CSAMPLE15DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT

Mr. D

Source:

SAMPLE

i i l S h K i


Financial Snapshot Key Ratios

Particulars y‐o‐y change (2011‐10)

2011 2010 2009 2008

Profitability RatiosOperating Margin

Profit / Loss

Total Income

3.5 0.5

ProfitINR bn

Total IncomeINR bn

Net MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on Assets1.0

1.5

2.0

2.5

3.0

‐1.0

‐0.5

0.0

Financial Summary

Return on Fixed Assets

Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)


0.0

0.5

‐1.520XX20XX20XX20XX

SAMPLE•The company incurred a net loss of INR X mn in FY 20XX, as compared to net loss of INR Y mn in FY 20XX

• The company reported total Income of INR A bn in FY 20XX, registering an increase of b per cent over FY 20XX


Liquidity RatiosCurrent RatioCash Ratio

Leverage RatiosDebt to Equity RatioSAMPLE • The company earned an operating margin of C per cent in

FY 20XX an increase of d percentage points over FY 20XX

• The company reported debt to equity ratio of Z in FY 20XX, a decrease of W per cent over FY 20XX

Debt to Capital RatioInterest Coverage Ratio

Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset Turnover


Current Asset TurnoverWorking Capital TurnoverCapital Employed Turnover

Improved DeclineSource:


Key Recent Developments

Description News

• Player 2 operates through Firm 2 in the DTH segmentOverview

• Player 2 operates through Firm 2 in the DTH segment

• It has around A mn gross subscribers and plans to double its count by end of 20XX

• Player 2 is in talks with US based cable operator, Firm C to sell upto a% stake in the company for INR B bn

Investment • The company is negotiations for INR E mn HD content acquisition

• It also plans to invest an additional INR F mn for content acquisition over the next b years

• Player 2 entered into a corporate agreement with Firm G to provide free Digital TV connections ith e er p rchase of Prod ct HTie ‐ ups connections with every purchase of Product H

• It has approached J, K, L for non film HD content

Product Launch • Player 2 has broadened its offering by incorporating Z channels on its network

SAMPLE17DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT

Source:

SAMPLE

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Market Research Report : Direct to Home (DTH) Market in India 2012

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