DEN Networks Limited Disclaimer These presentation materials have - - PowerPoint PPT Presentation
DEN Networks Limited Disclaimer These presentation materials have - - PowerPoint PPT Presentation
DEN Networks Limited Disclaimer These presentation materials have been prepared by DEN Networks Limited (DEN) solely for use at this presentation and have not been independently verified. This presentation material is highly confidential, is
Disclaimer
2
These presentation materials have been prepared by DEN Networks Limited (“DEN”) solely for use at this presentation and have not been independently verified. This presentation material is highly confidential, is being presented solely for your information and may not be copied, reproduced or redistributed to any other person in any manner. The distribution of these materials in certain jurisdictions may be restricted by law and persons into whose possession these materials come should inform themselves about and observe any such restrictions. Neither DEN nor any of its affiliates, advisers or representatives make any undertaking to update any such information subsequent to the date
- hereof. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or
completeness of the information presented or contained in this presentation. The information presented or contained in this presentation is current as of the date hereof and is subject to change without notice. Certain information and statements made in this presentation contain “forward-looking statements.” Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “considering,” “depends,” “estimate,” “expect,” “intend,” “plan,” “planning,” “planned,” “project,” “trend,” and similar expressions. All forward-looking statements are the current expectation of future events and are subject to a number of factors that could cause actual results to differ materially from those described in the forward-looking statements. This presentation should not be construed as legal, tax, investment or other advice. Caution should be taken with respect to such statements and you should not place undue reliance on any such forward-looking statements. Certain data in this presentation was obtained from various external data sources, and DEN has not verified such data with independent sources. Accordingly, DEN does not make representations as to, and assumes no responsibility or liability for, the accuracy or completeness of that data, and such data involves risks and uncertainties and is subject to change based on various factors. This presentation has not been reviewed or approved by any regulatory authority in India or otherwise, and does not constitute an offer or invitation to purchase or subscribe for any securities of the Company and neither any part of this presentation nor any information or statement contained therein shall form the basis of or be relied upon in connection with any offer, investment, solicitation, contract or commitment whatsoever. You acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the
- Company. None of the Company’s securities may be offered or sold in the United States without registration under the U.S. Securities Act of 1933,
as amended, or pursuant to an exemption from registration therefrom.
Contents
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DEN’s Strategy
Digitisation in Indian Cable
DEN Networks – An Overview Financials
The Indian Television Market – A Snapshot
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Current Indian TV Market Cable & DTH: Household Break-up
Total Households TV Households
162 mn
Cable Homes 98 mn DTH subscribers (Gross) 46 mn
262 mn
Total Cable & DTH Households
144 mn
Source: MPA Estimates (MPA Asia Pacific Pay-TV & Broadband Markets, 2012) Forecasted market size for 2013
Phase 1
Deadline: Oct 31, 2012
Phase 2
Deadline: Mar 31, 2013
Phase 3
Deadline: Sep 30, 2014
Phase 4
Deadline: Dec 31, 2014
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The Indian Cable Digitisation Law:
A Four Phase Conversion of Analog to Digital
4 Metros
Delhi, Mumbai, Kolkata, Chennai
38 1 Million+ Population Cities All Other Urban Areas Rest of India
Phase 1 & 2 Covers India’s Largest Cities
* Note: Forecasted cable TV homes for 2015. Assumed to by fully digitised (Source: MPA Asia Pacific Pay-TV & Broadband Markets 2012)
The Indian Cable Market in 2015
Digital Cable subscribers*: 101 mn
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Phase 2: Pace of Digitisation – Cable vs DTH
Cable Dominates Digital Conversions
DTH (subs added) Cable (STBs installed) 470,000 5.28 mn
Note: Figures – approximate to nearest 10,000. Source: Derived from Ministry of Information & Broadcasting, Govt. of India data available on pib.nic.in and www.digitalindiamib.com
Cable digitised at >11x the pace of DTH during the last 2 months
Phase 2 - Digitisation in 38 Cities
(Feb 8 – April 12, 2013)
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Phase 1: Pace of Digitisation – Cable vs DTH
Similar Trends were Observed in Phase 1
DTH (subs added) Cable (STBs installed) 171,000 1.75 mn
* Excludes Chennai as national MSOs are absent in the city. Note: Figures – approximate to nearest 10,000. Source: Derived from Ministry of Information & Broadcasting, Govt. of India data available on pib.nic.in and www.digitalindiamib.com
Cable digitised at 10x the pace of DTH in the last 45 days before the deadline
Phase 1 Cities – Digitisation in 3 Metros*
(Delhi, Mumbai & Kolkata) Sep 17 - Nov 1, 2012
Phase
Total Digital Cable & DTH STBs Seeded DTH Subscribers Digital Cable STBs installed Digital Cable Market Share (%)* Phase 1** 8.7 mn 2.2 mn 6.5 mn 75%
Phase 2
13.6 mn 4.4 mn 9.2 mn 68%
Total
22.3 mn 6.6 mn 15.7 mn 70%
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Government Data on Digitisation in Phase 1 & 2 Cities
* Digital cable market share = Digital cable STBs ÷ Sum of Digital Cable & DTH subscribers ** Phase 1 data corresponds to Delhi, Mumbai & Kolkata. Excludes Chennai as national MSOs are absent in the city Source: Phase 1 data as per MIB Press Release (Nov 1, 2012); Phase 2 data as per MIB Press Release (April 12, 2013)
Cable & DTH in Phase 1 & 2 Cities
Cable Becomes Largest Digital Platform
- Approx. 3 mn cable
homes yet to be digitised in Phase 2
How Digitisation is Set to Transform Indian Cable…
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All Consumers Paying
All Cable TV consumers paying the last mile operator (LCO)
- ARPUs in the range of $3-$4(a)
- Digitisation targets 100% transparency of sub. base by LCO
- Government – Higher tax revenues
- MSOs & Broadcasters – Legitimate share of subscription
- LCOs – Medium to Long Term Gains
‒ From transparency of multiple TVs ‒ Higher ARPUs from more channels ‒ Share in VAS (VOD/ PPV) & Broadband revenues
Stage Set for Transformation
- More Channels
- ARPU Growth
- Broadband & Triple Play
- Consolidation in Cable
India’s Cable TV Industry Likely to Resemble Mature Markets Like the US All Stakeholders Stand to Gain
(a) Source: MPA Asia Pacific Pay-TV & Broadband Markets 2012
…Early Signs of That Transformation Already Evident
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New Channel Launches DTH platforms taking up their entry pack pricing:
- July 2012:
Rs 180 Rs 200
- March 2013:
Rs 200 Rs 220 ARPUs Rising MSOs’ current packaging and pricing already indicating a rise in ARPUs
- Star Sports 2, Ten Golf
- HBO Hits & HBO Defined (Ad-free pay channels)
New channels, including niche & subscription
- nly channels being launched:
Early Indicators of Digitisation Driven Transformation
Contents
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DEN’s Strategy Digitisation in Indian Cable
DEN Networks – An Overview
Financials
DEN: Leader in Indian Cable
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Pan-India presence in 11 million analog homes; Digital base of 4.1mn Strategic Content J-V – exclusive distributor of all Star, Zee & Other channels in India EBITDA positive in 1st full year of operations; PAT positive for 3 years in a row
India’s Largest* Cable Distribution Company Star DEN & MediaPro Strategic J-V With Star & Zee Strong Financials
* As per MPA Asia Pacific Pay-TV & Broadband Markets 2012 in terms of subscribers
Pan-India Presence in Important States & Cities
13 Delhi Mumbai
Bangalore Mysore
Kolkata
Strong Nationwide Presence in 150+ Cities across 13 States
- 3 Metros
- 24 One mn+ cities
- 123+ Other cities &
towns
DEN’s Presence Spans India’s Economically Important Urban Landscape
Metros 1 Million+ Cities Other DEN Cities DEN States
Map not to scale
6 DTH Platforms
DEN – Digitisation in Phase 1 Cities
DEN Alone Rivals All DTH Platforms Put Together Delhi Mumbai Kolkata
300,000 300,000 + ~ 320,000 ~ 753,000 1.02 million
2.0 Million 2.1 million Total
STBs Installed/ Subscribers
Note: DTH data is as of Oct 30, 2012 (Ministry of Information & Broadcasting, Press Release dated Oct 31, 2012) DEN data corresponds to STBs installed, as of March 2013
1.4 million+
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June 6 2012 October 29 2012 April 5 2013
DEN: Rapid Digital Scale Up Driven by DAS
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DEN Digital Base
(STBs installed in millions)
Over 2 mn conversions in 158 days 1 mn conversions in 145 days
1 Million 2 Million 4.1 Million
DAS: Digital Addressable Systems
State Cities Estimated Seeding in Phase 2
Uttar Pradesh Karnataka Rajasthan Gujarat Maharashtra Others
7 2 3 2 6 4 1.3 mn 0.3 mn 0.3 mn 0.2 mn 0.6 mn 0.3 mn Total
3.0 mn
DEN – Phase 2 Cities Digitisation in Full Swing
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2.0 million STBs already deployed in Phase 2 cities
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STBs: Set top Boxes
4 million
DEN – Phase 3 & 4 Cities
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Significant Scope to Increase Subscribers Through Further Consolidation
Uttar Pradesh Karnataka Rajasthan Gujarat Maharashtra Bihar Haryana West Bengal Kerala Madhya Pradesh Jharkhand Uttarakhand
Phases 3 & 4: DEN Presence Spans 120 + Cities Across 13 States... Phase 3 2 million Phase 4
- Est. Subscriber Base
Phase 3 + 4 = 6 million
NCR of Delhi
MediaPro: Exclusive Distribution J-V for all Star, Zee, Turner & NDTV Channels
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50% 50%
DEN is the Only Major Cable TV Company in India to have a Strategic Stake in a Large Pay Channel Distribution Entity
DEN holds an effective stake of 25% in MediaPro
MediaPro: A Content Distribution Powerhouse
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FOX NatGeo Others Star
Unrivalled Collection of 70+ Leading Television Brands Under One Roof
NDTV Zee Turner
List of channels not exhaustive
Contents
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DEN’s Strategy
Digitisation in Indian Cable DEN Networks – An Overview Financials
DEN: Strategy Growth with Digitisation
Digitisation Broadband Consolidation Digitisation of Current Analog Subscriber Base Consolidate Fragmented Cable Players and Digitise Launch and Scale up Broadband Service
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Growth Verticals Over the Next 2-3 Years
Cable: Large Consolidation Opportunity in Phase 3 & 4 Cities
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Source: Derived from Indian Cable Industry – A Digital Evolution, January 2013 report and MPA Asia Pacific Pay-TV & Broadband Markets 2012
50% 50% Top 6 players Others Indian Cable Market (Market Shares %) Small, Independent MSOs, mainly in Phase 3 & 4 Towns Who Control nearly 50% of the Market – Not in a Position to Digitise... ...These markets ripe for expansion through organic & inorganic routes while Digitisation is playing out
Broadband: The Next Wave of Growth in Cable
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Source: Forecasted cable TV homes for 2013 (MPA Asia Pacific Pay-TV & Broadband Markets, 2012) TRAI Recommendation Paper on National Broadband Plan, Dec 2010
Unrivalled Last-Mile Presence High Bandwidth Platform .
DEN’s Strong Presence Across India’s Urban, Affluent Landscape Offers a Great Opportunity to Become One of the Largest Wired Broadband Platforms Following DAS
98 million Indian homes on cable Other wired platforms (fixed phones) limited last mile presence 78 mn broadband connections after completion of DAS (TRAI) Broadband through the existing cable last mile
Existing backbone & last mile network with some upgrades can offer DOCSIS enabled broadband
Cable’s Inherent Strengths Likely to Make it One of the Largest Broadband Platforms…
Contents
DEN’s Strategy Digitisation in Indian Cable DEN Networks – An Overview
Financials
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Strong financials
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(a) Includes other non-operating income; (b) Calculated as Profit before tax plus finance cost plus depreciation; (c) PAT after minority interest ; (d) Does not include minority interest; (e) Calculated as long term borrowings plus short term borrowings plus current portion of long term debt ; (f) From 1 April 2012, Media Pro Enterprises, a indirect JV of DEN, in its standalone financial results has started reporting Net revenues (Gross revenues less cost of distribution right), hence the prior periods are not comparable; (g) Total long term borrowings + Short term Borrowings as per balance sheet as of December 31, 2012; Note: Period ending December 2012 financials are limited reviewed and are provisional
9,256 10,581 11,566 6,588 FY10 FY11 FY12 9MFY13 962 1,264 1,093 1,501 FY10 FY11 FY12 9MFY13 301 375 143 429 FY10 FY11 FY12 9MFY13 7,410 7,746 8,046 8,554 Mar-10 Mar-11 Mar-12 Dec-12 1,750 1,573 2,582 4,362 Mar-10 Mar-11 Mar-12 Dec-12 – 1.5x growth in revenues in just 2 years EBITDA positive in 1st full year of
- peration; PAT positive in 2nd year
– India’s only listed PAT positive cable
- r DTH company
– Low debt & debt-equity ratio as on December 2012 Total Income (INR mn)(a)(f) EBITDA (INR mn)(b)(f) PAT (INR mn)(c) Shareholder’s equity (INR mn)(d) Total debt (INR mn)(e)
(g)