1 Dish TV India Limited Investor Presentation 2 Disclaimer Some - - PowerPoint PPT Presentation

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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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Investment rationale

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Poised to be the largest Media Company in India

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Most exciting time in the history of the Company; significant merger synergies to

• unfold. Maiden dividend declared

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At an inflection point; on course to deliver strong growth and margins

3

Forthcoming, powerful integration of in-house OTT with DTH to increase urban stickiness

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Aiming to be debt free in around two years

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Annuity business with significant Free Cash Flow potential

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Buffered from disruptive technologies; supremacy amongst semi-urban and rural consumers

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Poised to be the largest media company in India

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Total Re Revenues (Rs RsBn Bn.)

Year ending 31 March 2018 66.9 62.4 57.2 50.3 37.6 29.6 23.7 23.3 23.0 15.4 12.9 25 50 75 Zee Entertainment Enterprises Dish TV India Ltd Tata Sky Network 18 Media & Investments Airtel Digital TV Sun TV Network PVR D.B.Corp Jagran Prakashan Hathway Cable & Datacom Den Networks

EBITDA (Rs Rs Bn Bn.)

Year ending 31 March 2018 21.0 20.8 19.7 18.2 14.2 5.8 5.6 4.3 3.5 2.8 1.9 (4) 4 12 20 Sun TV Network Zee Entertainment Enterprises Dish TV India Ltd Tata Sky Airtel Digital TV Jagran Prakashan D.B.Corp PVR Hathway Cable & Datacom Den Networks Network18 Media & Investments

Source: Annual reports & company filings

Significant merger synergies to unfold

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SAMPLE TEXT SAMPLE TEXT ~1100 mn Capex synergies ~700 mn Interest cost synergies Revenue synergies Content & administrative cost synergies Backend services & call centre synergies ~3300 mn above EBITDA level synergies

5100 mn mn Merger synergie ies

Already realised in 1H FY 19

Supremacy amongst semi-urban and rural consumers

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Dish easiest to reach / Most economical for TV viewing

Distributed row houses

Growing penetration

• f wireless

broadband Unfeasible to lay fibre/ wired broadband Negligible requirement for unlimited broadband

Larger family size

Inconvenient- Watching linear TV on mobile screens

India

• utside

big cities

Dish TV India has majority of its subscr cribers outside top-towns and cities

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Indian TV Industry

The Indian TV industry

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Source: TV industry size: FICCI-KPMG 2017; Households: BARC India Universe Update 2018; Distribution Industry: MPA Report 2017

Analog Cable 28% Digital Cable 39%

Mar arket share - Distribution Industry

DTH 33%

2020 2020

INR 821 Bn.

TV subscription revenues CAGR of 8% (2017-2020P)

TV Industry to gain from incr creasing TV and Pay -TV penetration

Broad adcas asting Industry Multiple broadcasters, having 300 pay channels, 577 FTA channels, producing content in more than 15 languages

Total households (in Mn Mn.) .) Total TV households (in Mn Mn.) .) TV penetration (of total HH’s) C&S Penetration (of TV HH’s)

2018 2018 2020 2020

298 298 311 311 197 197 66% 66% 83% 83% 220 220 71% 71% 84% 84% 646 702 821 665 761 920

2017 2018 2020P

TV Industry Size (INR Bn.)

Subscription revenues Advertising revenues

20% 33% 17% 14% 16%

TV viewing in India

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95% 95% 98% 98% 97% 97%

Percentage of single TV households

Source: Percentage of single TV households: BARC

77% large and affluent joint families have single TV’s, implying co-viewing as a consumption pattern

79% of Indian households still have CRT TV’s

All India Urban Rural

Daily tune in on TV: 566 Mn Mn. . Individual als Daily time spent per individual al 03:4 :44:2 :28 (hh:mm :mm:s :ss) TV continues to remain the most popular form of entertainment Share of TV viewership universe across age groups

Adults (31-40 yrs)

Kids (2-14 years) Youth (15-30 years) Senior (>50 years)

Popular across age groups despite rising internet penetration

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Source: Share of TV viewership by, and across age groups: BARC

1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 51+ yrs 41-50 yrs 31-40 yrs 15-30 yrs 2-14 yrs

2017 2016

22% 22%

Share of TV viewership universe by age groups (in Mn. impressions)

Contrary to popular perception, the youth contributes a massive 33% % share of TV viewership, and has seen a growth of 22% % in impressions over the year

Youth (15-30 years) Mature 41-50 years Kids (2-14 years) Senior (>50 years) All India internet penetration- 30% 40.7 70.4 120 218 345 14.5 15.3 16.5 18.1 17.9

50 100 150 200 250 300 350 400

Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Broadband subscribers (in Mn.) Wireless broadband subs (mn) Fixed broadband subs (mn)

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Pay - TV in India

An overview of the Pay - TV Industry

TV households 197 Mn. Pay -TV TV 163 Mn. Cable Subs 109 Mn. DTH Subs 54 Mn. Non - Pay 34 Mn. Free Dish 22 Mn.

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Source: TV & Pay – TV HH: BARC Universe Update 2018; Distribution by platform: MPA Report 2017; Free Dish subscriber base: MIB Annual Report, 2018

Asymmetry in the Pay - TV Industry

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Source: MPA Report 2017

Abysmally low content cost per subscr criber per month in cable is an ARPU dampener for the entire Pay - TV industry

DTH maximized gains from Digitization (initiated in 2012). Majority of cable additions were conversion from Analog to Digital Despite having only a 33% market share, DTH contributes >53% of subscription revenues earned by broadcasters

Cable DTH Subscriber market share (%) 67% 33% Content cost (INR Mn.) 50,938 56,982 Contribution towards subscription revenues of broadcasters 47% 53%

TRAI Orders effective from July 3, 2018. Stakeholders have a period of 180 days to implement the provisions of the Order.

Subscribers (in Mn.) 2011 2012 2013 2014 2015 2016 2017 2018

Net new additions by DTH 7.3 4.1 3.6 3.9 3.0 3.5 3.7 4.0 New digital additions by Cable 1.1 9.6 13.3

• 1.5

9.7 13.5 10.2 6.9 Out of Which Analog seeding 0.0 7.6 11.5 0.0 8.2 12.1 9.0 5.8 Net new additions by Cable 1.1 2.0 1.9

• 1.5

1.6 1.4 1.3 1.2 % of new additions by DTH 87% 67% 66% 100% 65% 72% 75% 78% % of new additions by Cable 13% 33% 34% 0% 35% 28% 25% 22%

DTH Cable

15 1,439 1,131 1,064 997 103 DirecTV Charter Dish Comcast Netflix Annual cost of Netflix 1/10th of Pay -TV cost in the US Annual ARPU (USD) -2016 80 54 30 11 8 8 11 7 8 6 USA Australia Sweden Mexico Nigeria Low cost of OTT vs Pay -TV drove adoption Pay TV monthly ARPU OTT monthly fee

Source: Cost of OTT vs Pay –TV: Digital TV Research; Annual cost of Netflix : Marymaker Internet Trends Report 2017, : Cost of OTT vs Pay –TV: Digital TV Research & internal est.; Pricing of OTT services : Market Estimates

Emergence of OTT

The global OTT phenomenon The India exception

600 180 210 Netflix Cable Pack DTH Basic packs Pricing (per month) of OTT services vis-à-vis cable and DTH 80 54 30 11 8 3 8 11 7 8 6 8 USA Australia Sweden Mexico Nigeria India Cost of OTT vs Pay -TV per month (in USD)

Pay TV monthly ARPU OTT monthly fee

Low OTT costs compared to traditional Pay -TV platforms, led to higher adoption of OTT content globally India is an exception to the global OTT phenomenon, with higher cost of OTT vs Pay -TV

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IPTV as an offering Re Reali lity chec eck: k: Winnin ing IPTV subscrib iber

• ers. Is it as easy as gain

inin ing tel elec ecom custome mers?

Telecom IPTV

Capex requirement Low Front loaded Physical Infrastructure requirement Low High Ground Task force Negligible Huge Overall cost of delivery Low Extremely high per home Distribution/reaching the last mile Through local shops/ retail stores Through existing operators having access to homes Pricing High existing data and voice costs supported aggressive undercutting by new entrant Traditional C&S prices are too low to be susceptible to undercutting Consumer experience/ novelty in

• ffering as compared to existing service

Free voice and cheap data Nil ( Change in pipes only) Potential reach of new technology Pan India Densely populated tier 1 cities Potential consumers Data starved & aspiring mobile customers Select consumers having extremely high data requirements

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IPTV as an offering – An oversimplification of market thesis IPTV as a threa eat to DTH – An over ersim impli lific icatio ion of market thes esis is! Have e we seen en this is bef efore?

• Mandatory digitization of Analog cable signals (Digital Addressable Systems), started in 2012, was perceived to be a threat to DTH
• DTH had the following advantages over Analog:
• DAS, on the other hand, had the potential to even out all these advantages as follows:

Value proposition DTH DAS

Video Quality Digital Digital Number of channels High High Pick and choose channels Available Available HD channels Available Available

Value proposition DTH Analog

Video Quality Digital Analog Number of channels Higher Lower Pick and choose channels Available Not available HD channels Available Not available

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IPTV as an offering – An oversimplification .. (continued) IPTV as a threa eat to DTH – An over ersim implif lific icatio ion of market thes esis is

• However, in reality, DTH emerged stronger than ever before post the event:

IPTV as an offering – An oversimplification .. (continued)

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*HathwayShares split from Rs 10 to Rs 2 in 2014

DTH Supremacy

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Increased capacity & content throughput

VDSP Model Consulting eSolution Web Building Web Design

Extremely efficient, low cost, video delivery platform

Consumption of bandwidth heavy content likely to increase going forward. SD HD UHD

Declining transponder costs – an

• pportunity

Sharp rise in ARPU’s for the entire industry, following consolidation in cable

Impact of changes in environment on DTH: mobility/fixed line

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1.7 5.5 0.93

0.25 0.77 0.11

14.7% 14.0% 11.4% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 0.0 1.0 2.0 3.0 4.0 5.0 6.0

Siti Hathway Den

India broadband uptake as % home passed Broadband Homes Passed Broadband Subscribers Uptake as (%) homes passed 828 1,375 4,642 20,092 66.1% 237.6% 332.8%

0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 350.0% 5000 10000 15000 20000 25000 Dec -14 Dec -15 Dec -16 Dec -17

Wireless data usage and growth Wireless data usage (in million GB per year) Growth (YoY In %)

Exponential growth in data consumption on mobile has restrict cted the need for data through fixed line

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Impact of changes in environment on DTH: FTTH Fibre e not a game me changer er!

FTTH Value addition to consumer experience

High speed There are no specific applications which need 1Gbps connectivity and till these applications evolve customers would not necessarily jump onto the Very High Speed broadband. Data volume Marginal utility of data is negligible Bundling of data Virtual Data Service Providers or VDSP would be an equally effective substitute to services like FTTH which promise bundled data. Existing last mile service providers like DTH companies would become VDSP’s to

• ffer data benefits to existing subscribers in partnership with their respective mobile service providers on

revenue share basis. A win-win for both! Exponential growth in data consumption on mobile has restricted the need for data through fixed line Price FTTH also requires corresponding ONTs and Routers/ Wi-Fi devices at home, which add significantly to the

• costs. These costs cannot be justified if the applications used do not have a need to use 1000 Mbps. Thus

price to the end consumer would never be lower than wireless data. With ARPU’s at 3$ , the DTH industry is not ripe for price disruption. IPTV through FTTH would also not offer any incr crement ntal be bene nefit to

• the

he co cons nsum umer thu hus restrict cting ng sco cope pe for any ny di disrup uption

• n.

Global FTTH H ado dopt ption

• n trend

nds sho how it ha has no not be been n di disrup uptive in n any ny of the he markets in n US or EU, nor

• r ha

has it grow

• wn

n at extraordinary rates ha having ng run un int nto

• a series of
• f hu

hurdl dles.

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Impact of changes in environment on DTH: FTTH Fibre e not a game me changer er .. even en when en comp mpared ed to ex exis istin ing fix ixed ed line e broadband

Globa bal FTTH H ado dopt ption

• n trend

nds sho how it has no not been n disruptive in any of the markets in US or EU, nor has it grown at extraordinary rates ha having ng run un int nto

• a series of
• f hu

hurdl dles.

3.48 3.19 3.14 3.10 2.89 2.85 2.79 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Jio Giga fiber 7 Star Digital Spectranet Airtel Atria convergence technology You broadband Hathway

NETFLIX ISP LEADER BOARD - OCTOBER 2018

Current speed Mbps

Source: Netflix ISP speed Index, October 2018

Impact of changes in environment on DTH: new regulations

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Consulting eSolution Web Building Web Design

New Tariff Regulations

Consumer ARPU’s to rise.

End of irrational carriage fee revenues as carriage gets restricted to niche channels. Transparency in content deals Creation of a level playing field vis-a-vis cable

Network Carriage Fees to provide revenue stability

Pass through of content costs to de-risk the business

1 2 3 4 5 6

Impact of changes in environment on DTH: new pipes

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New pip ipes- IPTV

Subscriber reach

Unlike Pan India footprint of satellite, IPTV would be restricted to densely populated tier-1 cities

Last mile

Direct to home versus dependence

• n last mile
• perator in case of

IPTV Wireline broadband

Limited uptake due to easy availability of broadband through wireless

Only 16% of rural viewers have access to internet. ~99% of the rural internet users access internet through their mobile devices.

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1 + 1 = 11

Dish TV India – The Road Ahead

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Short Term

FY 2020 – Cricketing ng action!

• n!
• World Cup + IPL to turbocharge growth in revenues and profitability
• In the past:
• FY20 Projection
• Merger synergies and operating leverage would be at play
• Tariff Order to reduce content outgo

World Cup FY2011 (Mn) Growth YoY FY 2015 (Mn) Growth YoY

Net Additions 2.8 Up 95.8% YoY 1.5 Up 87.5% YoY Revenues 15,246 Up 32.2% YoY 27,816 Up 10.9% YoY EBITDA 3,269 Up 100.0% YoY 7,331 Up 17.5% YoY

Projection + + FY2020 (Mn) Growth YoY

Net Additions 1.8 mn. Up 38.5 % YoY Revenues

74,777

Up 11.0 % YoY EBITDA

27,587

Up 17.0 % YoY

Dish TV India – The Road Ahead

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Medium Term

FY 2020-2021 – We Well pos

• sitione
• ned

d to addr ddress evol

• lvi

ving ng vide deo

• needs

ds

• Constant increase in content throughput and capacity; strengthening ability to compete
• Technological innovations to enable subscribers to watch content anywhere, anytime.
• VDSP – Partnering with telcos and broadband players to offer exciting benefits to consumers.
• Emerging as a stronger alternative to bundled offerings

Long Term

FY 2022 – Establ blished d and nd unr nriva valled

• Leveraging the 29 plus million subscribers for competing benefits
• Overall ARPU increase lead by consolidation and low content cost advantage of cable getting eliminated
• Solid and regular free cash flows

Being future ready

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Increas ased capacity & content throughput Consolidation in cable & implementation

• f Tariff Order

to increas ase ARPUs OTT to be a a supporting service to our subscr cribers VDSP Mo Model: bundling dat ata a services with DTH

Alerts Controlling

Consolidation to lead to value creation

30 Dish TV- Videocon 37% Tata Sky 27% Airtel 23% Sun Direct 11% Reliance 2% Market Share (% of net subscribers)

Source: Market share - TRAI Data, December 2017

Higher market share of the combined entity to create synergies A combined entity with a significa cant presence ce acr cross India

Value creation through synergies

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Leveraging strengths of each company Cost and financi cial synergies Revenue synergies Adopting best pract ctises

Identifying the strengths of each brand

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High top of the mind brand recall Value for money offerings Deep penetration in tier 2 and beyond markets High brand loyalty in trade circles Premium segment offerings like 4K Reasonable presence in urban markets Popular in regional content markets Tailor made packages for regional audiences Presence in key vernacular markets like Orissa and West Bengal

Co Co-exi xistence ce of all three brands to target a higher market share while maintaining healthy competition and synergy in back ckend

• perations

Adopting best practises- Customer service

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1 million home visits every month by field service

Faster, Better and Effici cient Service ce model built on a service ce infrastruct cture no other DTH player can match ch

Adop

• ption
• n of
• f the

he com

• mpa

pany owned d service ce mod

• del for
• r the

he ent ntire ent ntity

More than 4,000 distributors and around 470,000 dealers Mobile App for subscribers Call centres across India supported by a large no. of agents Targeting more than 450 owned service centresand 5,500 company technicians

Adopting best practises - Backend and IT Operations

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IVR for faster response Optimising AHT for better customer experience Cross utilising critical infrastructure for synergies Inbound/outbound swap

Synergising back ckend operations to reap long term benefits and faster turnaround time for customer resolutions

Our core values

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Entering the New Era

Reinvigorating the new entity

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#JeetoSaareHeart

New leadership mix comprising of select professionals from both entities Separate sales teams with uniform structures Fresh campaigns and branding

• initiatives. New Brand

Ambassador Taking the lead in the industry with new customer centric packs- ‘Mera Apna Pack’

The beginning of the transformation into India’s most loved DTH brand!

Sharper customer focus with High Definition

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* Exclusive of taxes

Dish TV HD Add-Ons English Club HD @ 106* All Sports HD @ 84* Maxi Sports HD @ 64* Sports HD South @ 84* All Sports HD South @ 102*

Sharpe per tha han n ever foc

• cus

us on n bo boos

• sting

ng HD acq cqui uisition

• n

and d rech charges by by maximisingcom

• mbi

bine ned d she helf and nd retail visibility Encou

• uraging HD sampl

pling ng thr hrou

• ugh

h econo nomica cal, mus ust-ha have HD HD bou

• uqu

quets

Focu cus on High Definition offerings acr cross brands for ARPU acc ccretion

Laun unch ch of ne new HD co compliant STB’s that would be more economical than the existing STB’s

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Financials

Quarterly performance metrics

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Net subscriber additions of 200 thousand EBITDA margin – 33.9% Operating revenues INR 15,943 EBITDA & EBITDA Margin INR 5,406 33.9% ARPU INR 207

91%

1% 2% 2% 4%

Subscription revenues Bandwidth income Advertising income Lease rent Other income

Consolidated revenues

35%

19.3%

3.9% 7.8% Programming and other costs Other operating expenses(excl.

• prog. & other costs)

Employee benefit expenses Other expenses (including S&D expenses)

Consolidated expenses

P&L structure – 2Q FY19

On track for growth Board declared interim dividend of Re. 0.50 per equity share of Rs.1 each in 2QFY19

Quarter ended Quarter ended INR Million

• Sept. 2018

June 2018 Operating revenues 15,943 16,556 Expenditure 10,537 10,989 EBITDA 5,406 5,568 EBITDA margin (%) 33.9 33.6 Other income 147 157 Depreciation 3,675 3,608 Finance cost 1,591 1,775 Profit / (Loss) before tax 286 342 Tax expense:

• Current Tax
• Current Tax-prior years
• Deferred Tax
• Deferred Tax-prior years

125

• (36)
• 104
• (18)
• Net Profit / (Loss) for the period

197 255

2QFY FY 2019 vs. 1QFY QFY 2019

Operating revenues break-up (Rs. mn) 2QFY 2019

Summarized Consolidated P&L - Quarterly

14,536 218 374 226 589 Subscription revenues Lease rentals Bandwidth charges Advertisement income Teleport services, CPE & Other

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On March 22, 2018, Videocon D2h Limited had merged with and into Dish TV India Limited with the appointed date of the merger being October 1, 2017. Financial numbers for 2Q FY19 are thus not comparable with the corresponding period last year (2Q FY18)

Annual performance metrics

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Dish TV India Limited’s first set of merged financials for FY18

Combined subscriber base of 23 million EBITDA margin – 28.4% # Operating revenues* INR 62,377 Adjusted EBITDA & Margin* INR 19,690 31.6% ARPU INR 201

91%

3% 3% 1% 2%

Subscription revenues Bandwidth income Advertising income Lease rent Other income

Consolidated revenues

36% 18% 5% 13% Programming and other costs Other operating expenses(excl.

• prog. & other costs)

Employee benefit expenses Other expenses (including S&D expenses)

Consolidated expenses

P&L structure – FY18

* Presuming FY 18 financials represented 12 months each of Dish TV and d2h. * Adjusted EBITDA is EBITDA adjusted for merger expenses to the tune of Rs. 840 million booked in FY18 that have been excluded while calculating Adjusted EBITDA # Merged financials for FY18 basis 12 months of Dish TV and 6 months of d2h

Year ended Year ended INR Million

• Mar. – 2018
• Mar. – 2017

Operating revenues 46,342 30,144 Expenditure 33,181 20,464 EBITDA 13,160 9,680 EBITDA margin (%) 28.4 32.1 Other income 542 615 Depreciation 10,717 6,908 Financial expenses 3,964 2,292 Profit / (Loss) before tax (979) 1,095 Current Tax Current Tax-prior period Deferred Tax 53 (30) (166) 982 (708) Deferred Tax- prior period 13

• Net Profit / (Loss) for the period

(849) 821

FY 2018 vs. FY 2017

Operating revenues break-up (INR Mn.) FY 2018

Summarized Consolidated P&L- Annual

42,167 1,225 1,375 670 905 Subscription revenues Lease rentals Bandwidth charges Advertisement income Teleport services, CPE & Other

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Financials of Dish TV India Limited for the year ended March 31, 2018 represent 12 months financial performance of Dish TV India Limited and 6 months financial performance of Videocon d2h Limited. Financial numbers for FY18 are thus not comparable with FY17. Presuming FY18 financials had represented 12 months each, operating revenues and EBITDA of the Company would have been Rs. 62,377 million and Rs. 19,690 million respectively.

INR Million

• Sept. 2018 (Unaudited)

Equity and liabilities Equity (a) Equity share capital 1,841 (b) Other equity 66,008 Equity attributable to owners of Holding Company 67,849 (c) Non-controlling interest (277) Liabilities (1) Non-current liabilities (a) Financial liabilities (i) Borrowings 20,139 (ii) Other financial liabilities (b) Provisions 419 (c) Other non-current liabilities 557 (2) Current liabilities (a) Financial liabilities (i) Borrowings 2,334 (ii) Trade payables 10,631 (iii) Other financial liabilities 12,370 (b) Other current liabilities 21,290 (c) Provisions (d) Current tax liabilities (net) 30,058 229 Total Equity & Liabilities 1,65,600

Consolidated Balance Sheet

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INR Million

• Sept. 2018 (Unaudited)

Assets (1) Non-current assets (a) Property, plant & equipment 34,615 (b) Capital work in progress 7,471 (c) Goodwill 62,754 (d) Other intangible assets 22,106 (e) Financial assets (i) Investments 1,500 (ii) Loans 153 (iii) Other financial assets 94 (f) Deferred tax assets (net) 6,080 (g) Current tax assets (net) 1,111 (h) Other non-current assets 2,210 (2) Current assets (a) Inventories 467 (b) Financial assets (i) Investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Bank balances other than (iii) above (v) Loans (vi) Other financial assets (c) Other current assets 1,601 1,082 1,440 73 15,080 7,762 Total assets 1,65,600

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Thank You