Dish TV India Limited Investor Presentation Stock Code: BSE - - - PowerPoint PPT Presentation

Dish TV India Limited

Investor Presentation

Stock Code: BSE - 532839 NSE- DISHTV LSE: DTVL

1

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.

2

Investment rationale

3

07

Le Leadin ing di distrib ibutio ion pl platfor

• rm in

n Indi ndia

Amongst both cable TV and DTH players

Su Supr premacy in n mar markets

Largely buffered from alternate technologies with supremacy in tier-2 and rural areas

Gr Growt wth

On course to deliver healthy growth and margins

Mu Mult ltip iple le pr prod

• duct
• f
• ffer

erin ings gs

Portfolio of offerings; DTH service, smart connected devices, OTT platform – tapping on new growth opportunities

Ann Annuit ity busin business

Annuity business with significant Free Cash Flow potential

Str Strategic par partnerships to

• fuel

fuel gr growt wth

Partnership with Amazon Prime Video, Amazon Alexa, ShortsTV, Zee5, Hungama Play, Voot, Sony Liv, Alt Balaji and many more

05

06

04

03

02

01

Leading distribution platform

Tot

• tal Revenues

s (Rs Rs Bn. n.)

Year ending 31 March 2020 36 29 24 18 16 13 25 50 Dish TV India Airtel Digital TV GTPL Hathway Hathway Cable & Datacom SITI Networks Den Networks

EBI EBITDA (Rs Rs Bn. n.)

Year ending 31 March 2020 21 20 5 4 3 2 8 16 24 Dish TV India Airtel Digital TV GTPL Hathway Hathway Cable & Datacom SITI Networks Den Networks

Source: Company filings. Tata Sky & Sun Direct revenues & EBITDA for FY20 not available yet.

4

Supremacy in tier-2 and rural areas

5

DTH - 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 wired broadband

Large family size

TV viewing is a family affair

India

• utside

big cities

Di Dish TV V India India has has majo ajority of

• f its

ts sub subscribers out

• utside bi

big cit citie ies, in n tie ier-2 and and rura rural are areas

Multiple product offerings

Access to more than 500,000 Apps & games from Google Play store

HD quali lity con

• ntent

Access to curated content across genres and premium original shows

Online Apps**

Acce ccess s to

• sa

satell ellit ite TV TV cha channels

Linear TV

Dis Dish SM SMRT HU HUB D2H D2H str tream

** ** Brand logo’s are trademarks of respective brand owners.

6

Di Dish SM

SMRT Kit it –

with ith Ale Alexa

St Stay con

• nnected on
• n the

the go go - WATCHO

Personali lized TV TV exp xperience every rywhere

• The first OTT service to feature user generated

content allowing users to create and upload their own content

• Focused on short format storytelling - apt for

digital consumption

• 22 original shows and 1000+ hours of library

content including movies and short films

• Content

availability across various genres including but not limited to; Drama, Comedy, Thriller, Romance, Food, Fashion and Poetry

7

& Growing

Indian TV Industry

8

The Indian TV industry

9

Source: TV industry size: FICCI-E&Y 2020; Households: BARC India Universe Update 2018; Distribution Industry: MPA Report 2018 & DTH: TRAI Dec. 2019 ; Pay & FTA channels :TRAI Dec. 2019

Mar arket shar hare - Dis Distribution Ind ndustry

2022 2022

IN INR 495 495 Bn Bn.

TV subscription revenues CAGR of 2% (2019-2022P)

TV Industry ry to to gain from rom incr creasin ing TV an and d Pay ay -TV pe penetratio ion

Br Broadcas asting Ind ndustry Multiple broadcasters, having 332 pay channels, 586 FTA channels, producing content in more than 15 languages

Tot

• tal

l ho house usehold lds (i (in n Mn. n.) Total l TV TV ho house usehold lds s (i (in n Mn. n.)

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

2018 018 2021 021

311 m 298 m

220 0 m 197 7 m

66% 66% 71% 71%

163 63 m 185 185 m

Televisio ion shou should ld main aintain pole pole posit position as as the lar

argest seg

segment with thin the India Indian M&E se sector

17% 40% 43% 17% 83% Analog pay-tv Digital pay-tv Digital cable DTH

468 449 495 320 341 388

200 400 600 800 1000

2019 2020P 2022P

TV Industry Size (INR Bn.)

Subscription revenues Advertising revenues

TV viewing HHs - Pay & FTA

TV V hou households 197 Mn. Pay -TV TV 163 Mn. Cab Cable Sub Subs 94 Mn. DTH Su Subs 70 Mn. Non

• n - Pay

34 Mn. Fr Free Di Dish 30 Mn.

Source: TV & Pay – TV HH: BARC Universe Update 2018; Distribution by platform: MPA Report 2018, DTH: TRAI Dec. 2019; Free Dish subscriber base: Prasar Bharti website

10

20% 33% 17% 14% 16%

TV viewing in India

11

97% 97% 99% 99% 98% 98%

Percentage of single TV households

Source: Percentage of single TV households: BARC ; Daily time spent: FICCI-E&Y 2020

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

• nsumption pa

pattern

79% of Indian households still have CRT TV’s

All India Urban Rural

Dail Daily tune in in on

• n TV:

836 836 Mn Mn. . Ind ndividuals Avg.daily tim ime spe spent pe per ind individual al 03:42 :42:00 (hh hh:mm:ss 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)

93% % of

• f all

l video

• con
• ntent con
• nsump

mptio ion ha happ ppens ns throu through gh line near ar TV TV

41 70 120 218 345 507 643 15 15 17 18 18 18 19 100 200 300 400 500 600 700

Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Broadband subscribers (in Mn.) Wireless Broadband Subs (mn) Fixed Broadband (mn)

Popular across age groups despite rising internet penetration

Source: Share of TV viewership: BARC; Broadband subscribers : TRAI Dec 2019

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% gr growth th

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

Con Contrary to

• popu

popular per percepti tion, the you youth con

• ntrib

ibutes s a a mass assiv ive 33% 33% shar share of

• f TV

V vie viewership, , and and has has se seen a a gro growth th of

• f 22%

22% in n impressio ions ove ver the ye year

All India internet penetration- 54% 12

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 (USD) OTT monthly fee (USD)

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

Th The glob

• bal OTT

T phenom

• menon
• n

Th The e Ind ndia a exception

• n

₹ 649 ₹ 233 ₹ 275 Netflix Cable Pack DTH popular packs Pricing (p.m.) of Popular Packages in OTT, cable and DTH in India 80 54 30 11 8 4 8 11 7 8 6 9 USA Australia Sweden Mexico Nigeria India Cost of OTT vs Pay -TV per month (in USD)

Pay TV monthly ARPU (USD) OTT monthly fee (USD)

Lo Low OTT costs comp mpared to to tra radit itio ional l Pay -TV pl platf tforms, led to to hi high gher r ad adoptio ion of OTT content gl globall lly Ind ndia ia is s an an exceptio ion to to the e gl global l OTT ph phen enomenon, wi with th hi high gher cost t of OTT vs s Pay ay -TV TV 13

IPTV as an offering

14

IPTV

Infr frastructure Af Affor

• rdabili

lity Co Cons nsumer read eadin iness Co Content & & ser ervic ices

Densely populated cities & high-rise housing

High rise

Last mile high speed wired broadband penetration

High speed broadband

Penetration of smart devices (smart TV, laptop etc )

Smart devices IP IPTV - use use of

• f internet to
• de

deli liver TV prog programs and and vid videos s tha hat are are eit ither liv ive or

• r on
• n de

demand to

• hi

high-ris ise hous housin ing and and de densely popu popula lated metro cit cities

Typ ypic ical IP IPTV ecosystem

Hi High spee eed wi wired broa

• adband con
• nnec

ected ed devic ices

15

IPTV - Reality check Win inning IP IPTV su subscri

• ribers. Is

Is it it as as eas easy as as ga gain inin ing tel elecom cus ustomers?

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

16

Global fixed broadband penetration & TV platform take-up

Source: Fixed Broadband penetration : ACT DRHP; Global TV platform take-up : Ofcom International Communications Market Report, 2017

6% 8% 31% 37% 64% 75% 79% 82% 84% 88% 93% 105% 0% 20% 40% 60% 80% 100% 120% India Indonesia Thailand Malaysia China Japan Australia US UK Singapore Hong Kong South Korea

Fixed Broadband penetration as a % of Household

9 8 7 7 6 3 2 1

27 1

19 5 37 61 6 14 69 14 27 31 40 23 44 49 30 46 42 2 24 12 15 42 56 15 10 19 22 12 42

0% 20% 40% 60% 80% 100% US JPN UK AUS GER POL ITA BRA IND

TV platform take-up as proportion of TV homes (%)

IPTV Analogue Terrestrial Digital Terrestrial Analogue Satellite Digital Satellite Analogue Cable Digital Cable

17

IPTV as an offering – An oversimplification of market thesis

IP IPTV as as a th thre reat t to DTH – An ove versimplif ification of f market th thes esis is! Ha Have we e see een th 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

18

IPTV as an offering – An oversimplification .. (continued) IP IPTV as as a a thr threat to DTH – An n overs rsimpli lific ication of

• f mar

arket the thesis is

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

19

DTH supremacy

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

Consolidation in cable & implementation

• f the Tariff

Order to ensure a level playing field for DTH

20

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

1.70 5.60 0.90

0.20 0.89 0.11

11.8% 15.9% 12.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 0.00 1.00 2.00 3.00 4.00 5.00 6.00

Siti Hathway Den

India broadband uptake as % home passed Dec. 2019 Broadband Homes Passed Broadband Subscribers Uptake as (%) homes passed 828 1,375 4,642 20,092 46,404 76,319 66.1% 237.6% 332.8%

131.0%

64.5%

0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 350.0% 10000 20000 30000 40000 50000 60000 70000 80000 90000 Dec -14 Dec -15 Dec -16 Dec -17 Dec -18 Dec -19

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

Exp Exponential gro growth th in n da data con

• nsumptio

ion on

• n mob
• bil

ile has has re restric icted the ne need for

• r fix

fixed line dat data

Source: Wireless data usage & growth : TRAI performance indicator report, Dec 2019 ; India broadband uptake as % home passed Mar. 2019: Company filings: Den networks uptake data is for March 2019

21

Impact of changes in environment on DTH: FTTH Fib Fibre re no not a a ga game cha hang nger! r!

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 offer 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 $4 $4 , the the DTH TH industry ry is not

• t ri

ripe for

• r pri

rice disru ruptio

• ion. IPTV

TV thro through FT FTTH TH wou would also

• not
• t off
• ffer any

y incremental l benefit fit to

• the

the con

• nsumer thu

thus re restric ictin ing scop

• pe for
• r any

y disruptio ion. Glob Global FT FTTH TH adop

• pti

tion tren trends show it t has not

• t been disrup

ruptiv ive in any y of

• f the

the ma mark rkets in US S or

• r EU

EU, nor

• r has it

t gro rown wn at t extraordina nary rat rates having run run into

• a serie

ies of

• f hurdles

rdles.

22

Impact of changes in environment on DTH: FTTH Fib Fibre re no not a a ga game cha hang nger r .. .. even en whe hen com

• mpare

red to exis istin ing fix fixed lin line e bro broadband

Gl Global FT FTTH adop adoptio ion trends sho show it t has has not not be been di disruptiv ive in n an any of

• f the mar

arkets s in n US S or

• r EU

EU, , nor nor has has it t gro grown at at ext xtraordinary ry rat rates hav havin ing run run into a a seri series s of

• f hurd

hurdles. s.

3.86 3.62 3.52 3.49 3.45 3.41 3.18 3.17 1.60 2.10 2.60 3.10 3.60 4.10 Jio Giga Fiber 7 Star Digital Airtel SPECTRA You Broadband ATRIA Convergence Technologies D-VoiS Syscon Infoway

Netflix ISP leader board – February 2020

Jio Giga Fiber 7 Star Digital Airtel SPECTRA You Broadband ATRIA Convergence Technologies D-VoiS Syscon Infoway

Source: Netflix ISP speed Index, February 2020

23

Impact of changes in environment on DTH: New Tariff Regime

Consulting eSolution Web Building Web Design

Cr Creatio ion of

• f a

a le level l pla playin ing field ield vis is-à- vis is cable able Ne Network carr arria iage fees s to

• pr

provide de revenu nue stabili ability Transp sparency in in con

• ntent de

deals als End End of ir irratio ional carr arria iage fee revenu nues as as carr arria iage gets s restric ricted d to

• niche

niche chan channels ls Pas ass s thr hrough h of

• f

con

• ntent cos
• sts to
• de

de-risk risk the he busine business ss Overall ll mar argin in expan xpansion ion

New Tariff Reg egulations

24

Roadmap

25

Dish TV India – The road ahead

FY Y 2020 2020-2021 2021 – Well ell po posit sitioned to

• add

ddres ess evolv

• lving vide

ideo nee needs

• 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

FY Y 2022 2022 – Es Establi lished an and un unrivall lled

• Leveraging large subscriber base for competing benefits
• Overall margin expansion
• Solid and regular free cash flows

26

New customer centric ‘Dish Combos’

* Exclusive of taxes

Bharat Combo @ @ Rs Rs. . 16 161* 1* Swag agat @ @ Rs Rs. . 22 225* 5* Sup Super Fam amily @ @ Rs Rs. . 277* Maxi xi Spo Sports s @ @ Rs Rs. . 307 307* Su Super Sp Sports @ @ Rs Rs. . 38 385* 5* Engl English Cricket HD

Rs. . 57*

Di Dish HD HD add add-on

• n

pa packs

Rs. . 57* Rs. . 70* Rs. . 71* Rs. . 76* 76* Rs Rs. . 100* 100* Rs. . 133* 133* Rs. . 197* 197*

Tel elugu HD Mar arathi HD HD Ban Bangla HD HD Engl English Movies, s, News & Musi usic HD HD Tam amil HD Hin Hindi En Entertai ainment HD HD All All Hindi HD HD Tit itanium @ @ Rs Rs. . 44 440* 0*

27

Our core values

28

Financials

29

Quarterly performance metrics

Subscription revenues INR 7,766 million EBITDA margin – 62.5% Operating revenues INR 8,691 million EBITDA & EBITDA Margin INR 5,432 million 62.5% ARPU INR 108 (ARPU as per erstwhile accounting INR 183)

89% 4% 1% 6% Subscription revenues Additional marketing, promotional fee and bandwidth charges Advertisement income Others

Consolidated revenues

2% 18% 7% 11% 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 – 4Q FY20

30

Quarter ended Quarter ended INR Million

• Mar. 2020
• Mar. 2019

Operating revenues 8,691 13,987 Expenditure 3,258 9,838 EBITDA 5,432 4,150 EBITDA margin (%) 62.5 29.7 Other income 30 96 Depreciation 3,474 3,593 Finance cost 1,433 1,476 Exceptional items 19,155 15,625 Profit / (Loss) before tax (18,600) (16,449) Tax expense:

• Current Tax
• Current Tax-prior years
• Deferred Tax
• Deferred Tax- prior years
• (4,037)
• (125)
• (2,764)

54 Net Profit / (Loss) for the period (14,562) (13,613)

4QF QFY 2020 2020 vs.

• s. 4QF

QFY 2019 2019

Operating revenues break-up (Rs. mn) 4QFY 2020

Summarized consolidated P&L - Quarterly

7,766 302 121 502 Subscription revenues Additional marketing, promotional fee and bandwidth charges Advertisement income Teleport services, CPE & Other Owing to the netting-off of programming costs from revenues, to better reflect the New Tariff Regime, operating revenues for the quarter are not comparable with the corresponding period last year. Had the Company continued to account for revenues and costs as per erstwhile regime, revenue from operations as per consolidated results for the quarter ended 31 Mar. 2020 would have been Rs 14,055 mn and

• perating expenses would have been Rs 7,622 mn.

31

Annual performance metrics

Subscription revenues INR 31,928 million EBITDA margin – 59.2% Operating revenues INR 35,563 million EBITDA & EBITDA Margin INR 21,060 million 59.2% ARPU INR 111 (ARPU as per erstwhile accounting INR 190)

90%

4% 2% 5%

Subscription revenues Additional marketing, promotional fee and bandwidth charges Advertisement income Others

Consolidated revenues

3% 19% 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 – FY20

32

Year ended Year ended INR Million

• Mar. – 2020
• Mar. – 2019

Operating revenues 35,563 61,661 Expenditure 14,504 41,218 EBITDA 21,060 20,443 EBITDA margin (%) 59.2 33.2 Other income 136 521 Depreciation 14,262 14,409 Financial expenses 5,652 6,286

Exceptional items

19,155 15,625 Profit / (Loss) before tax (17,873) (15,357) Current Tax Current Tax-prior period Deferred Tax

• (1,325)

284 92 (4,099) Deferred Tax- prior period

• Net Profit / (Loss) for the period

(16,548) (11,634)

FY FY 202 2020 vs.

• s. FY

FY 201 2019

Operating revenues break-up (INR Mn.) FY 2020

Summarized consolidated P&L- Annual

31,928 1,413 552 1,670 Subscription revenues Additional marketing, promotional fee and bandwidth charges Advertisement income Teleport services, CPE & Other

33

Owing to the netting-off of programming cost from revenues, to better reflect the New Tariff Regime, operating revenues for the year are not comparable with the corresponding fiscal last year. Had the Company continued to account for revenues and costs as per erstwhile regime, revenue from operations as per consolidated results for the year ended 31 Mar. 2020 would have been Rs 58,077 mn and

• perating expenses would have been Rs 32,638 mn.

INR Million March 2020 (Audited) Equity and liabilities Equity (a) Equity share capital 1,841 (b) Other equity

36,657

Equity attributable to owners of Holding Company 38,498 (c) Non-controlling interest (521) Liabilities (1) Non-current liabilities (a) Financial liabilities (i) Borrowings

5,604

(ii) Other financial liabilities 18 (b) Provisions

259

(c) Other non-current liabilities

318

(2) Current liabilities (a) Financial liabilities (i) Borrowings

4,370

(ii) Trade payables

Total outstanding dues of micro enterprises and small enterprises 11 Total outstanding dues of creditors other than micro & small enterprises 12,900

(iii) Other financial liabilities

10,772

(b) Other current liabilities

8,056

(c) Provisions 35,802 Total equity & liabilities 1,16,088

Consolidated Balance Sheet

34

INR Million March 2020 (Audited) Assets (1) Non-current assets (a) Property, plant & equipment

28,488

(b) Capital work in progress

6,227

(c) Goodwill 28,170 (d) Other intangible assets

20,155

(e) Intangible assets under development

5,250

(f) Financial assets (i) Investments

• (ii) Loans

108

(iii) Other financial assets

4

(g) Deferred tax assets (net)

11,478

(h) Current tax assets (net)

990

(i) Other non-current assets

8,382

(2) Current assets (a) Inventories

220

(b) Financial assets (i) Investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Bank balances (v) Loans (vi) Other financial assets (c) Other current assets

• 868

1,127 335 161 13 4,111 Total assets 1,16,088 35

Thanks