Latin America Pay TV Forecasts

Table of Contents

Published in March 2017, this 172-page PDF and excel report combines two of last year’s reports: Digital TV Latin America Forecasts and the Latin America Pay TV Operator Forecasts in one convenient place. The report comes in five parts:

• Executive summary and regional forecasts, with handy comparison tables to reveal the best growth prospects; • Major pay TV operators, including market share for each; • Regional forecasts summary from 2010 to 2022 by platform, by household penetration, by pay TV subscribers and by pay TV revenues; • Country profiles for 20 territories; • Detailed forecasts for 19 countries, including 68 operators.

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Forecasts for the following 19 countries and 68 operators:

Country Forecasts No of ops Platform forecasts Argentina * 3 ; Supercanal; DirecTV Bolivia * 3 DirecTV; Tigo; Brazil * 4 ; Telefonica; Sky; Chile * 6 VTR; Telefonica; Claro; DirecTV; Entel; Telsur Colombia * 5 Claro; UNE; ETB; DirecTV; Movistar Costa Rica * 4 Tigo; Cabletica; Claro; Sky Cuba Dominican R * 3 Tricom; Claro; Sky Ecuador * 4 DirecTV; CNT; Claro; TV Cable El Salvador * 3 Claro; Tigo; Sky Guatemala * 3 Claro; Tigo; Sky Honduras * 3 Claro; Tigo; Sky Mexico * 6 ; Televisa cable; Sky; Dish; Axtel; TotalPlay Nicaragua * 2 Claro; Sky Panama * 4 Claro; Sky; Cable & Wireless; Cable Onda Paraguay * 2 Tigo; Claro Peru * 3 Telefonica; Claro; DirecTV Puerto Rico * 4 Liberty; Claro; DirecTV; Dish Uruguay * 2 Cablevision; DirecTV Venezuela * 4 Intercable; DirecTV; Movistar; CANTV

SAMPLE: Chile pay TV briefing

• Pay TV penetration was 57.2% by end-2016, and is forecast to increase to 62.5% by 2022 – adding nearly 500,000 subs. Satellite TV will remain as the largest pay TV platform. Pay TV revenues are expected to be $1.09 billion by 2022, up from $1.02 billion in 2016.

Main assumptions behind the forecasts • Population forecasts are slightly higher in this edition than the last. • The number of satellite TV subscribers overtook cable and IPTV combined in 2014. • Competition is forcing ARPUs down. • Analog terrestrial switch-off will take place in 2020. • Chile is a one of the wealthiest countries in the region. • The Peso gained against the $ in 2016. • The IMF has lowered its GDP growth forecasts for the next five years. Source: Digital TV Research

• Digital TV penetration reached three-quarters of TV households by end-2016, and will reach 100% by 2020. DTT penetration will reach 30% in 2022, having started in 2014. Pay satellite TV will bring in another 32.1%.

Pay TV subscribers by operator (000) Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Jun 16 Sep 16 VTR 893 911 926 926 1,009 1,022 1,041 34.4% Telefonica 337 386 418 496 593 636 650 21.5% Multimedia DirecTV 198 240 285 380 462 527 552 18.3% Claro 371 406 384 456 462 435 418 13.8% Telefonica del 35 49 57 68 83 96 102 Sur Entelphone 66 83 96 121 Pacifico Cable 47 54 61 72 79 81 86 GTD Imagen 16 21 24 27 30 Cable Central 14 11 10 8 7 10 11 TuVes 35 11 4 4 6 10 11 Total subs 1,929 2,067 2,160 2,556 2,810 2,943 3,025 3,025

Satellite TV 853 930 982 1,270 1,435 1,511 1,543 1,554 subs Cable/IPTV subs 1,076 1,138 1,178 1,286 1,375 1,432 1,471 1,471 Pay TV pene (%) 39.3 41.3 42.2 48.8 52.1 53.2 53.7 Source: Subtel

• Regulator Subtel estimated 3.03 million pay TV subscribers by September 2016, with satellite subscribers overtaking cable and IPTV combined in late 2014. Several of the world’s top pay TV companies (, Telefonica/Movistar, DirecTV and America Movil/Claro) have operations in Chile.

VTR Globalcom subscriber data (000) 2010 2011 2012 2013 2014 2015 2016 Analog cable subs 289 215 163 135 112 94 80 Digital cable subs 609 703 769 855 902 932 968 Total video subs 898 917 933 989 1,014 1,026 1,047 subs 698 647 678 690 694 690 657 subs 622 766 826 886 932 1,003 1,091 Total RGUs 2,218 2,331 2,436 2,565 2,639 2,719 2,796 Customer rels 1,069 1,102 1,144 1,200 1,225 1,263 1,329 Standalone (%) 35.3 33.6 33.2 32.6 31.3 30.5 31.3 Double-play (%) 21.9 21.2 20.7 21.1 22.1 23.7 27.0 Triple-play (%) 42.8 45.2 46.1 46.3 46.6 45.8 41.7 ARPU (CLP) 29,091 30,572 30,830 31,573 32,284 33,382 33,953 Source: Liberty Global

• VTR had 1.05 million video subscribers at end-2016, of which 92% were digital. We forecast 1.14 million subs by 2022. The operator has also offered quad- play services since May 2012. VTR had 166,000 mobile subs by end-2016, up from 132,000 a year earlier. However, more subs are taking double-play bundles at the expense of triple-play. The company offers 8,000 on-demand titles, of which 5,000 are to existing subscribers. VTR will include access to as part of Liberty Global’s deal.

• Liberty Global placed all of its Latin American operations, including VTR and Puerto Rico’s Cablevision, under its Lilac subsidiary in mid-2015. Later in 2015 Liberty acquired Cable & Wireless Communications, which has operations in Panama and some Caribbean islands.

• Subtel reported 1,554,000 satellite TV subscribers by September 2016. Chile has five satellite TV platforms. Apart from DirecTV, the other main satellite TV players are Telefonica (trading as Movistar TV Digital) and America Movil- owned Claro. Major telco Entel launched a satellite TV platform in late 2012. TuVes has a small satellite TV operation.

• Subtel estimated that DirecTV (CLP20,990-29,790/month ($31.85-45.20) for 86-125 channels) had 554,000 subs by September 2016. We expect DirecTV to have 654,000 subs by 2022.

Telefonica CTC operating data (000) 2010 2011 2012 2013 2014 2015 2016 Pay TV 341 391 424 503 601 645 661 Of which IPTV 0.0 0.0 1 10 29 43 55 Source: Telefonica.

• Telefonica/Movistar had 661,000 pay TV accesses by end-2016 and we forecast 820,000 by 2022. Movistar offers subs triple-play bundles, with TV from the satellite TV operation (96-153 channels for CLP20,990-24,990/month, $31.85-37.92) and IPTV (96-153 channels (CLP22,990-26,990/month, $34.89- 40.96).

• Subtel reported that America Movil-owned Claro had about 417,000 (cable and satellite TV, but also including OTT) subs by September 2016. The company has been slowly losing subs since end-2013. However, we forecast 464,000 subs by 2022.

• The company offers triple-play services to both its satellite TV (66-130 channels for CLP18,990-28,990/month, $28.82-43.99) and its cable subs (mainly in Santiago. 91-157 channels for CLP18,990-28,990/month, $28.82-43.99). Claro Play started in December 2015. – free to existing subs.

• Following the failure of its planned merger with GTD, Entel launched a satellite TV platform in December 2012. The platform (88-90 channels for CLP20,990- 26,990/month, $31.85-40.96) concentrates on areas that are poorly served by pay TV. According to Subtel, Entel had 121,000 TV subscribers by mid-2016 and we forecast 164,000 by 2022. Entel reported 98,219 TV subs at end-2015. Entel is Chile’s largest telco and mobile (9.51 million subs at end-2016) operator. Entel is constructing a national fiber optic network.

• TuVes HD launched in October 2009 as Chile’s fourth satellite TV operator. However, the company recorded only 11,000 subs at June 2016, according to Subtel. Prices are CLP17,990/month ($27.30) for 133 channels. Venezuela’s Inter Group owns a stake in the company.

• Subtel reported that Grupo GTD-owned Telsur had 102,000 IPTV subscribers (CLP16,000-80,000/month, $24.28-121.40, for 53-175 channels) by mid-2016, which we expect to grow to 153,000 by 2022.

Chile: Fixed broadband penetration Year Residential subs (000) Total Subs(000) 2010 1,584 1,820 2011 1,765 2,025 2012 1,895 2,186 2013 2,007 2,293 2014 2,182 2,501 2015 2,382 2,729 Sept 16 2,550 2,889 Source: Subtel

• IPTV is slowly taking off. Subtel estimated that Chile had 2.89 million fixed broadband connections by September 2016, of which 2.55 million were residential. The subscribers nearly equally split between DSL/fiber and cable.

• Chile adopted the Japanese ISDB-T MPEG-4 standard for DTT. After much deliberation, the Senate decided on a FTA model in July 2012, with trial broadcasts starting in December 2013. Analog switch-off is scheduled for 2020, although broadcasters must reach a minimum 85% population coverage within five years. About 15 cities will be covered by end-2017. Around 40% of capacity will be allocated to regional and local channels. The FTA broadcasters collectively promote DTT under the Anatel brand.

• The International Monetary Fund forecasts that gross domestic product will increase at below the regional average for the next five years. GDP per capita was $12,910 in 2016 – well above the regional average. Chile had a population of 18.20 million at end-2016. Santiago had a population of 6.54 million in 2016.

Chile pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Total households (000) TV households (000) Digital cable subs (000) Analog cable subs (000) Pay IPTV subscribers (000) Pay digital Sat TV subs (000) Digital free Sat TV HH (000) Analog Satellite TV HH (000) Analog terrestrial HH (000) Primary FTA DTT HH (000) Primary Pay DTT HH (000)

Digital homes (000) Analog homes (000) Pay TV subscribers (000) Total DTT homes (000)

Digital cable subs/TV HH Analog cable subs/TV HH Pay IPTV subs/TV HH Pay Satellite TV/TV HH Digital free Sat TV/TV HH Analog Satellite TV/TV HH Analog terrestrial/TVHH Primary FTA DTT/TV HH Primary pay DTT/TV HH

TVHH/Total HH Digital/TV HH Analog/TV HH Pay TV Subs/TV HH Total DTT/TVHH

Stand-alone dig cable subs (000) Dual-play dig cable subs (000) Triple-play dig cable subs (000)

Stand-alone pay IPTV subs (000) Dual-play pay IPTV subs (000) Triple-play pay IPTV subs (000)

Chile pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Revenues (US$ million) Stand-alone dig cable revs Dual-play dig cable TV revs Triple-play dig cable TV revs Digital cable TV subs revs Dig cable TV on-demand revs Digital cable TV revenues Analog cable TV subs revs Cable TV revenues

Stand-alone IPTV revenues Dual-play IPTV revenues Triple-play IPTV revenues IPTV subscription revenues IPTV on-demand revenues IPTV revenues

Satellite TV subs revs Satellite TV on-demand revenues Satellite TV revenues

DTT subscription revs DTT on-demand revenues DTT revenues Subscription revenues On-demand revenues Total revenues

Average Revenue Per User (ARPU - US$) Stand-alone dig cable subs Dual-play dig cable TV subs Triple-play dig cab TV subs Ave dig cab (subs & VOD) Analog cable TV subs Stand-alone IPTV subs Dual-play IPTV subs Triple-play IPTV subs Ave IPTV (subs and VOD) Pay Satellite TV (subs) Pay Sat TV (subs and PPV) Pay DTT (subs) Pay DTT (subs and PPV) Average monthly ARPU

Chile pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Pay TV subscribers by operator (000) VTR (digital cable) VTR (analog cable) VTR (total) Telefonica (satellite) Telefonica (IPTV) Telefonica (total) Claro (satellite) Claro (digital cable) Claro (analog cable) Claro (total) DirecTV (satellite) Entel (satellite) Telsur (IPTV) Others

Share of pay TV subs by operator % VTR (digital cable) VTR (analog cable) VTR (total) Telefonica (satellite) Telefonica (IPTV) Telefonica (total) Claro (satellite) Claro (digital cable) Claro (analog cable) Claro (total) DirecTV (satellite) Entel (satellite) Telsur (IPTV) Others

Chile pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Subscription & VOD revenues (US$ million) VTR (digital cable) VTR (analog cable) VTR (total) Telefonica (satellite) Telefonica (IPTV) Telefonica (total) Claro (satellite) Claro (digital cable) Claro (analog cable) Claro (total) DirecTV (satellite) Entel (satellite) Telsur (IPTV) Others

Share of pay TV revenues by operator % VTR (digital cable) VTR (analog cable) VTR (total) Telefonica (satellite) Telefonica (IPTV) Telefonica (total) Claro (satellite) Claro (digital cable) Claro (analog cable) Claro (total) DirecTV (satellite) Entel (satellite) Telsur (IPTV) Others

Average Revenue Per User (ARPU - US$) VTR (digital cable) VTR (analog cable) Telefonica (satellite) Telefonica (IPTV) Claro (satellite) Claro (digital cable) Claro (analog cable) DirecTV (satellite) Entel (satellite) Telsur (IPTV)

Source: digital TV research

Digital TV Research publication schedule for 2017 Title Publication Price 1 Sub-Saharan Africa Pay TV Forecasts January £1200/€1440/$1560 2 Middle East & North Africa Pay TV February £1200/€1440/$1560 Forecasts 3 Asia Pacific Pay TV Forecasts March £1200/€1440/$1560 4 Latin America Pay TV Forecasts March £1200/€1440/$1560 5 North America Pay TV Forecasts April £750/€900/$975 6 Eastern Europe Pay TV Forecasts April £1200/€1440/$1560 7 Western Europe Pay TV Forecasts May £1200/€1440/$1560 8 Global Pay TV Subscriber Forecasts May £1800/€2160/$2340 9 Global Pay TV Revenue Forecasts June £1800/€2160/$2340 10 Global Pay TV Operator Forecasts June £1800/€2160/$2340 11 Global Pay TV Databook July £1000/€1200/$1300 12 Sub-Saharan Africa OTT TV & Video £1200/€1440/$1560 Forecasts August 13 Middle East & North Africa OTT TV & £1200/€1440/$1560 Video Forecasts August 14 Asia Pacific OTT TV & Video Forecasts September £1200/€1440/$1560 15 Latin America OTT TV & Video Forecasts September £1200/€1440/$1560 16 North America OTT TV & Video Forecasts October £750/€900/$975 17 Eastern Europe OTT TV & Video Forecasts October £1200/€1440/$1560 18 Western Europe OTT TV & Video November £1200/€1440/$1560 Forecasts 19 Global OTT TV & Video Forecasts November £1800/€2160/$2340 20 Global SVOD Forecasts December £1800/€2160/$2340 Please note that the regional Pay TV reports (1-7 above) contain the content from last year’s Digital TV series and the Pay TV Operator series – so two reports in one for 2017. Likewise, the regional OTT reports (12-18 above) contain the content from 2016’s OTT series as well as the content from 2016’s SVOD series.

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Digital TV Research publication schedule for 2016 Title Publication Price Date Digital TV North America Forecasts March £500/$750/€625 Digital TV Eastern Europe Forecasts April £900/$1350/€1125 Digital TV Western Europe Forecasts April £900/$1350/€1125 Digital TV World Household Forecasts April £1300/$1950/€1625 Digital TV World Revenue Forecasts May £1300/$1950/€1625 Digital TV World Databook May £800/$1200/€1000 Middle East & Africa OTT TV & Video Forecasts May £900/$1350/€1125 Asia Pacific OTT TV & Video Forecasts June £900/$1350/€1125 Latin America OTT TV & Video Forecasts June £900/$1350/€1125 North America OTT TV & Video Forecasts June £500/$750/€625 Eastern Europe OTT TV & Video Forecasts July £900/$1350/€1125 Western Europe OTT TV & Video Forecasts July £900/$1350/€1125 Global OTT TV & Video Forecasts July £1500/$2250/€1875 North America Pay TV Operator September £500/$750/€625 Forecasts Eastern Europe Pay TV Operator September £900/$1350/€1125 Forecasts Western Europe Pay TV Operator September £900/$1350/€1125 Forecasts Global Pay TV Operator Forecasts October £1500/$2250/€1875 Middle East & Africa SVOD Forecasts October £900/$1350/€1125 Asia Pacific SVOD Forecasts October £900/$1350/€1125 Latin America SVOD Forecasts November £900/$1350/€1125 North America SVOD Forecasts November £500/$750/€625 Eastern Europe SVOD Forecasts November £900/$1350/€1125 Western Europe SVOD Forecasts December £900/$1350/€1125 Global SVOD Forecasts December £1500/$2250/€1875

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