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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
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3DIRECT TO HOME (DTH) MARKET - INDIA.PPT
•Market Overview
•Drivers & Challenges
•Trends
•Regulations
•Competition
•Key Developments
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4DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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5DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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)
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6DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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7DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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8DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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9DIRECT TO HOME (DTH) MARKET - INDIA.PPT
•Market Overview
•Drivers & Challenges
•Trends
•Regulations
•Competition
•Key Developments
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10DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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11DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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)
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12DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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13DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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14DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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15DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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16DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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17DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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18DIRECT TO HOME (DTH) MARKET - INDIA.PPT
•Market Overview
•Drivers & Challenges
•Trends
•Regulations
•Competition
•Key Developments
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19DIRECT TO HOME (DTH) MARKET - INDIA.PPT
Key Trends
Shift from price war to
offering exclusive VAS
Combined retail of LCDs and DTH connections
Technological InnovationsPartnerships with movie
distributors
Trends
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20DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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21DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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22DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
Combined retail of LCDs and 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
Combined retail of LCDs and DTH connections
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23DIRECT TO HOME (DTH) MARKET - INDIA.PPT
•Market Overview
•Drivers & Challenges
•Trends
•Regulations
•Competition
•Key Developments
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24DIRECT TO HOME (DTH) MARKET - INDIA.PPT
Key Regulations
Customs and Excise DutyTariff Regulation
High TaxationInteroperability of STB
Regulations
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25DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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26DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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27DIRECT TO HOME (DTH) MARKET - INDIA.PPT
•Market Overview
•Drivers & Challenges
•Trends
•Regulations
•Competition
•Key Developments
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28DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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29DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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30DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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
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31DIRECT TO HOME (DTH) MARKET - INDIA.PPT
Players in the Market (2/6)
Headquarters Mumbai
Established Aug 2006
Financials FY ’09: Revenue - INR 8 bn
Key People • Vikram Kaushik – CEO & MD
Company Snapshot: Tata Sky
Corporate Information Packages Offered
Business Highlights Interactive Services Offered
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
Packages Description
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
Source: Press Articles; Company Website Note: Rates are on a monthly basis
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32DIRECT TO HOME (DTH) MARKET - INDIA.PPT
Players in the Market (3/6)
Headquarters Chennai, India
Established Dec 2007
Financials NA
Key People• Kalanithi Maran – Chairman & MD
• Tony D’Silva – COO
Company Snapshot: Sun Direct
Corporate Information Packages Offered
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
Packages Description
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
Source: Press Articles; Company Website Note: Rates are on a monthly basis
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33DIRECT TO HOME (DTH) MARKET - INDIA.PPT
Players in the Market (4/6)
Headquarters New Delhi, India
Established Aug 2008
Financials NA
Key People • Arun Kapoor – President
Company Snapshot: Big TV
Corporate Information Packages Offered
Business Highlights Interactive Services Offered
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)
Packages Description
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
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34DIRECT TO HOME (DTH) MARKET - INDIA.PPT
Players in the Market (5/6)
Headquarters Gurgaon, India
Established Oct 2008
Financials NA
Key People
• Ajay Puri – CEO
• Atul Bindal – President (Telemedia
Services)
Company Snapshot: Airtel Digital TV
Corporate Information Packages Offered
Business Highlights Interactive Services Offered
Mega + 7 channels 364Ultra
110 channels127Super Value
Super Value + 8 channels160New Value
New Value + 37 channels221Economy
110-400
304
Cost (INR)
Economy + 22 channelsMega
Packages Description
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
Source: Press Articles; Company Website Note: Rates are on a monthly basis
• 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
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35DIRECT TO HOME (DTH) MARKET - INDIA.PPT
Players in the Market (6/6)
Headquarters Mumbai, India
Established May 2009
Financials NA
Key People• Venugopal Dhoot – Chairman
• Anil Khera – CEO
Company Snapshot: Videocon D2H
Corporate Information Packages Offered
Business Highlights Interactive Services Offered
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
Packages Description
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
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36DIRECT TO HOME (DTH) MARKET - INDIA.PPT
•Market Overview
•Drivers & Challenges
•Trends
•Regulations
•Competition
•Key Developments
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37DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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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38DIRECT TO HOME (DTH) MARKET - INDIA.PPT
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