Direct to Home (DTH) Market IndiaDirect to Home (DTH) Market – India
February 2012
Executive Summary
MarketDTH market was valued at INR A bn in 20XX and is projected to reach INR B bn by 20XXEstimated subscriber base of C mn, expected to reach D mn in the next E yearsCurrent overall share of DTH households among total TV households of India is pegged at f%
Drivers & Challenges
Drivers: Huge market potential, Emerging middle‐class and rising disposable income, Increasingtelevision penetration and sale of LCD monitors, Price war and different package optionsattracting consumers, DTH advantage over traditional cable operators, Complete Digitization ofTV services, Growing Rural Market and Increasing advertising revenuesChallanges: Getting a share of the cable driven market and facing the new age IPTV, Demand
l f t d i 7 l b d t k t T d i TRAI’ t t id li
Technological InnovationsShift from price war to offering exclusive VASC bi d t il f LCD d DTH ti
supply gap for transponders in a 7 player broadcast market, Trapped in TRAI’s content guidelinesand Cap on Foreign Investment
Trends
Regulations
Combined retail of LCDs and DTH connectionsPartnerships with movie distributors
Interoperability of STBHigh TaxationTariff Regulationg
CompetitionMajor Players
Player 1 Player 2 Player 3
Tariff RegulationCustoms and Excise Duty
2DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
pPlayer 4 Player 5 Player 6
•Market OverviewMarket Overview
•Drivers & Challenges
T d•Trends
•Regulations
•Competition
•Strategic Recommendationg
•Appendix
3DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
DTH industry in India has looked upbeat in recent years but remains a niche segment
•DTH, although niche, has been the fastest growing segment in the pay TV industry
Overview Market Size and Growth (2010‐15e)
250• DTH penetration in India is expected to double to a% by 20XX
• Current overall share of DTH households among total TV households of India is pegged at b%
G f I di ’ i f l di i i i 50
100
150
200x%
•Government of India’s aim for complete digitization of TV broadcasting by 20XX has provided ample growth opportunities for DTH players
• The market has C broadcasting companies namely Player 1 Player 2 Player 3 Player 4 Player 5 and
Market Share (2011)
0
50
20XXe20XXe20XXe20XXe20XXe20XX
Player 1. Player 2, Player 3, Player 4, Player 5 and Player 6 and one Free to Air operator – Player 7
•DTH players incur high costs which directly affects their profit margins Copyright tax, entertainment tax, entry fee, license fee and Player 3
Player 2
Player 1
other taxes constitute y% of revenue earned by DTH players
Subscriber acquisition costs, which were originally as high as INR D, currently ranges between INR E ‐ F and is expected to fall further on account of stabilization in the
Player 6
Player 5
Player 4
4DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
price wars and reduction in prices of se t top boxes
Source:
•Market OverviewMarket Overview
•Drivers & Challenges
T d•Trends
•Regulations
•Competition
•Strategic Recommendationg
•Appendix
5DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
Drivers and Challenges – Summary
Drivers
Low Penetration
Emerging middle‐class and rising e g g dd e c ass a d s gdisposable income
Increasing television penetration and sale of LCD monitors
Price war and different package options
Challenges
Getting a share of the cable driven market and facing the new age IPTV
D d l f dPrice war and different package options attracting consumers
DTH advantage over traditional cable operators
Demand supply gap for transponders in a 7 player broadcast market
Trapped in TRAI’s content guidelines
Complete Digitalization of TV services
Growing Rural Market
Cap on Foreign Investments
Increasing advertising revenues
6DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
•Market OverviewMarket Overview
•Drivers & Challenges
Trends•Trends
•Regulations
•Competition
•Strategic Recommendationg
•Appendix
7DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
Trends
Partnerships with movie distributors Technological Innovations
Key Trends
Combined retail of LCDs and DTH connections
Shift from price war to offering exclusive VAS
8DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
•Market OverviewMarket Overview
•Drivers & Challenges
T d•Trends
•Regulations
•Competition
•Strategic Recommendationg
•Appendix
9DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
Key Regulations
Interoperability of STB High Taxation
Regulations
Tariff Regulation Customs and Excise Duty
10DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
•Market OverviewMarket Overview
•Drivers & Challenges
T d•Trends
•Regulations
•Competition
•Strategic Recommendationg
•Appendix
11DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
Public: Domestic Company – Player 1 (1/3)
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Products and Services
Ticker Symbol
Stock Exchange
Head Office
Key People
Products and Services
N D i ti
Category Products/Services
Category 1
Name Designation
Mr. A
Mr. B
Mr. CSAMPLECategory 2
12DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
Mr. D
Source:
SAMPLE
i i l S h K i
Public: Domestic Company – Player 1 (2/3)
Financial Snapshot Key Ratios
Profit / Loss
Total Income
600 100
ProfitINR bn
Total IncomeINR bn
Particulars y‐o‐y change (2011‐10)
2011 2010 2009 2008
Profitability RatiosOperating Margin
0
200
400
0
50
20XX20XX20XX20XX
Net MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on Assets
SAMPLE
Financial Summary
• The company incurred a net profit of INR X mn in FY 20XX, as compared to net profit of INR Y mn in FY 20XX
• The company reported total Income of INR A bn in FY 20XX, registering an increase of b per cent over FY 20XX
Return on Fixed Assets
Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)
Interest costs (% of Sales)
SAMPLE registering an increase of b per cent over FY 20XX• The company earned an operating margin of C per cent in FY 20XX a decrease of d percentage points over FY 20XX
• The company reported debt to equity ratio of Z in FY 20XX, a decrease of W per cent over FY 20XX
Interest costs (% of Sales)
Liquidity RatiosCurrent RatioCash Ratio
Leverage RatiosDebt to Equity Ratio
b i l iFinancial Summary
Indicators Value (18/01/2012)Market Capitalization (INR )
Total Enterprise Value (INR)
EPS (INR)
Debt to Capital RatioInterest Coverage Ratio
Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset Turnover
13DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
EPS (INR)
PE Ratio (Absolute)Working Capital TurnoverCapital Employed Turnover
Improved DeclineSource:
Public: Domestic Company – Player 1 (3/3)
Key Business Segments Key Geographic Segments
100%
Segment 3Segment 2Segment 1
100%22%1%4%6%
Region 1 Region 3Region 2
0%0% 1%2%0%
50%
3%
97%
4%
96%
3%
96%
2%
96%2%
0%
50%76%
22%
99%96%
%
94%
6%
Key Recent Developments
2008 201120102009 2011201020092008
Description News
Overview• Player 1 operates in the DTH industry through its brand X• Its digital subscriber base touched A mn mark in September 20XX
• Introduction of product B, an enhanced Set Top Box (STB) with capability to record live
SAMPLEProduct Innovation
p , p ( ) p ytelevision, anytime, anywhere using mobile phone
• Country’s first product C was launcheed
Award & Recognition • Award 1
14
SAMPLE DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
Source:
Private: Domestic Company – Player 2 (1/3)
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
W b i
Products and Services
Website
Year of IncorporationHead Office
Key People
Products and Services
Category Products/Services
Category 1
N D i tiName Designation
Mr. A
Mr. B
Mr. CSAMPLE15DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
Mr. D
Source:
SAMPLE
i i l S h K i
Private: Domestic Company – Player 2 (2/3)
Financial Snapshot Key Ratios
Particulars y‐o‐y change (2011‐10)
2011 2010 2009 2008
Profitability RatiosOperating Margin
Profit / Loss
Total Income
3.5 0.5
ProfitINR bn
Total IncomeINR bn
Net MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on Assets1.0
1.5
2.0
2.5
3.0
‐1.0
‐0.5
0.0
Financial Summary
Return on Fixed Assets
Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)
Interest costs (% of Sales)
0.0
0.5
‐1.520XX20XX20XX20XX
SAMPLE•The company incurred a net loss of INR X mn in FY 20XX, as compared to net loss of INR Y mn in FY 20XX
• The company reported total Income of INR A bn in FY 20XX, registering an increase of b per cent over FY 20XX
Interest costs (% of Sales)
Liquidity RatiosCurrent RatioCash Ratio
Leverage RatiosDebt to Equity RatioSAMPLE • The company earned an operating margin of C per cent in
FY 20XX an increase of d percentage points over FY 20XX
• The company reported debt to equity ratio of Z in FY 20XX, a decrease of W per cent over FY 20XX
Debt to Capital RatioInterest Coverage Ratio
Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset Turnover
16DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
Current Asset TurnoverWorking Capital TurnoverCapital Employed Turnover
Improved DeclineSource:
Private: Domestic Company – Player 2 (3/3)
Key Recent Developments
Description News
• Player 2 operates through Firm 2 in the DTH segmentOverview
• Player 2 operates through Firm 2 in the DTH segment
• It has around A mn gross subscribers and plans to double its count by end of 20XX
• Player 2 is in talks with US based cable operator, Firm C to sell upto a% stake in the company for INR B bn
Investment • The company is negotiations for INR E mn HD content acquisition
• It also plans to invest an additional INR F mn for content acquisition over the next b years
• Player 2 entered into a corporate agreement with Firm G to provide free Digital TV connections ith e er p rchase of Prod ct HTie ‐ ups connections with every purchase of Product H
• It has approached J, K, L for non film HD content
Product Launch • Player 2 has broadened its offering by incorporating Z channels on its network
SAMPLE17DIRECT TO HOME (DTH) MARKET IN INDIA 2012.PPT
Source:
SAMPLE
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