Direct to Home

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Direct to Home (DTH) Market – India
December 2009

Executive Summary
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% 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 Technological Innovations Shift from price war to offering exclusive VAS Combined retail of LCDs and DTH connections Partnerships with movie distributors 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 DIRECT TO HOME (DTH) MARKET - INDIA.PPT

Market

Drivers & Challenges

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

Trends

Competition

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•Market Overview •Drivers & Challenges •Trends •Regulations •Competition •Key Developments

DIRECT TO HOME (DTH) MARKET - INDIA.PPT

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Direct-to-Home (DTH) has transformed the television transmission in India DTH - The Concept
•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 2000 • 2001: Ban on KU

band lifted. Guidelines by TRAI for DTH operations

Functioning of DTH
Ku band satellite

Middlemen like cable operators are not in picture

Uplink Station Broadcaster

TV Dish with transmission decoder

2002 • 2003: First private
license granted to Dish TV

2004 • 2004: DTH became
operative along with DD Direct+

2006 • 2006: DTH
subscriber base touched 1 mn

2008 • 2008: 15.17 mn
DTH subscribers reported by 5 key players

Source: BNP Paribas Analyst Report, Sep 2009, TRAI DIRECT TO HOME (DTH) MARKET - INDIA.PPT

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

Segmented Pay TV Subscriber Base
Digital Cable Subscribers in mn
100 80 60 40 20 0

DTH Analogue Cable 2 4
22

1 60

3 63

4 1 69

15

70

69

2006

2007

2008

2009e

2010e

Distribution across TV Households (HH)
HH (%age)
80 60 40 61 20 0 64 64 64 64

Cable HH DTH HH

•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

1 2006

3 2007

9 2008

13 2009e

17 2010e

Source: BNP Paribas Analyst Report, Sep 2009; Dish Corporate Presentation; Outlook “Rising In The North”, Jun 2009 DIRECT TO HOME (DTH) MARKET - INDIA.PPT

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DTH services has established its presence on a pan-India basis and is dominated by the northern and western region Indian DTH Market
•North India and Western India...
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