Dish TV India Limited Investor Presentation 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 Indian M&E Industry Snapshot M&E industry composition & size (INR bn.) Indian Television Industry TV Print Films Others Broadcasting Industry Distribution Industry 307 133 17% 62 14% Analog Digital 11% DTH 125 220 Multiple Cable Cable 417 885 104 14% 2013 12% 2018 broadcasters 241 18% 45% 50% 2008 42% producing content in 15 languages 243 374 172 across 26% 21% 30% 7 genres 28% 52% 20% beaming 580 918 1,786 ~788 channels Indian television market statistics (mn. HHs) 295.9 262.3 2013 - 2018 223.2 192.3 161.8 164.8 TV penetration (of total HHs) ~ 62% - 65% 126.6 134.7 90.7 C&S penetration (of TV HHS) ~ 83% - 86% Average household size of 5.1 2008 2013 2018 Total HHs TV HHs C&S HHs Source: M&E industry composition & size: FICCI-KPMG 2014, Indian television statistics & broadcasting and distribution industry: MPA Report 2014 3 Distribution Industry 4 Digital Addressable Systems - DAS Phase I Phase II Phase III/IV Delhi, Mumbai, Calcutta & Chennai 38 notified cities Rest of India 30-June-2012 31-Mar-2013 31-Dec-2015/2016 Bulk of the potential DAS converts Cable Limited coverage by large MSOs due to dispersed population Land grab seeding at throw away prices Very high DTH recognition No addressability/KYC DTH best suited considering terrain Working backwards to fill in the critical gaps; billing, collection Key target markets with more than 60% incremental and dunning 90% of Total Revenue potential for DTH DTH Digital Penetration of Total Pay-TV Subscribers in India is Amongst the Lowest * Opening up of cable stronghold markets 120% 100% 100% 100% 100% 100% 100% 99% 93% Bonus additions for the sector 100% 80% 69% 60% 45% 40% Dish TV 20% 0% Higher incremental net adds; positive shift in subscriber distribution Source: *MPA Report 2013 5 Distribution Industry - Cable 1990 - 2014 3 Tiered Structure Analog signal - limited carrying capacity, broadcasters jostling for PCS Placement & Carriage fees - bulk of MSOs top-line Pre-DAS MSOs Massive under declaration – ignored to maintain MSOs ‘reach.’ (more than 115 ) Reason behind LCOs prosperity No incentive to raise ARPUs Distributors Digital signal - fatter pipe, larger carrying capacity (at least one in each locality) Placement fees mindset B2B billing Post-DAS 100% postpaid. Element of bad debts? LCOs Impairment of Set-Top-Box (STB)? (more than 50,000) RIO deals – a game changer? 6 Distribution Industry - DTH 100% digital DTH Players in India Owns last mile subscribers Industry pioneer. Started operations in 2003 Dish TV Part of the ‘Zee’ stable, largest producer and aggregator of Hindi Subscription driven top-line programming in the world Fully prepaid, no bad debts Launched in 2006 Tata Sky DTH contributes ~ 60% of the broadcaster’s JV between the TATA Group and News Corp domestic subscription revenue; scope for rationalization vs. cable Launched in 2007 Sun Direct Fully tax compliant JV between Sun Network and Astro, Malaysia Heavily taxed: Reliance Part of Reliance Communication Ltd, a subsidiary of Reliance ADA Digital group • License fees – 8% AGR instead of 10% GR (TRAI recommendations on Launched in 2008 issues related to new DTH licenses) Airtel Digital Part of the telecom major Bharti Airtel • Entertainment tax & Service tax - likely to be subsumed post rollout of GST Videocon Launched in 2009 D2h Part of the white goods manufacturing, Videocon group 7 Dish TV 8 Key Managerial Personnel Key Managerial Personnel – Pioneers and Visionaries 8% Promoters 13% 3% Non Executive Chairman 11% GDR; held by Apollo PE, 65% USA Promoter of the ‘Essel’ Group of companies India’s media mogul and founder of ‘Zee’, India’s first FII satellite television channel in 1992 & later India’s first private news channel, Zee News Fin. Inst., Banks & MF A self-made man, has consistently demonstrated his ability to identify new businesses and lead them on the path to Other Investors success Shareholding Pattern* Subhash Chandra Other business interests, education, theme parks, wellness Managing Director Many Firsts to its Credit Key architect in creation and expansion of Essel Group of Companies First DTH in India Key architect of cable TV services, established ‘Siti Cable’ in 1994 First to negotiate content on a fixed fee basis Pioneered the DTH services in India and has been instrumental in establishing Dish TV First to launch Live TV for moving vehicles Past president of IBF for four consecutive years upto 2010 Jawahar Lal Goel An active member on the Board of various committees set First to achieve operational break-even in the DTH industry up by MIB, for addressing critical industry matters First to launch High Definition CEO First to offer unlimited recording India and South Asia MD of ESPN Star Sports prior to joining Dish as its CEO. First to be FCF positive Current President of DTH Operators Association More than 27 years of experience & a successful track First to launch online TV for DTH viewers – ‘Dish Online’ record in turning around businesses for brands like Oral-B, Nestle and Kellogg’s First to launch a sub-brand targeting regional language R.C. Venkateish markets– ‘Zing’ *Shareholding pattern as on 10th April 2015 9 Business Model P&L Structure – Q3 FY15 Business Model Subscription revenues 92% POSTPAID PREPAID 100% prepaid Revenue Box Rent 3% Bandwidth income 3% Upfront subsidy on Consumer premises equipment (CPE) Advertising income 1% Other income 1% Employee benefit expenses 4% Average ARPU of Rs. 177 Programming and other cost 28% License fees 10% Other operating costs 11% Churn at 0.7% p.m. Expenses Selling and distribution expenses 16% Other expenses 4% Implied average subscriber life of 12 years EBITDA 26.8% 10 Dish TV vs. Competition Linear and True HD channels Dealer-Distributor Network 500 383 Highest transponder capacity 400 358 356 312 300 241 213 Maximum content tie-ups 200 100 37 28 26 25 10 11 Maximum HD channels 0 Dish TV Videocon Airtel Tata Sky Rel. Sun Digital Direct Widest dealer-distributor network Linear HD 90% of Total Revenue Transponder Dish TV Tata Sky Airtel Sundirect Reliance Videocon Bandwidth Digital Satellite NSS6, Asiasat 5 Insat 4A SES 7 Measat 3 Measat 3 Singtel ST-2 & SES - 8 Number of 16 12 11 4+2 9 8 Transponders TP Bandwidth (MHz) 36,54 36 36 36 36 54 30% of Revenue6 Zonal offices Total Bandwidth 720 432 396 216 324 432 (MHz) 14 Regional offices Source: Company & market data as on 31st December 2014 11 Key Metrics Net subscriber base (mn.) Net subscriber additions (mn.) 12.5 14.0 12.1 0.500 11.7 0.416 12.0 10.7 11.4 9.6 0.400 0.378 10.0 8.5 8.0 5.7 0.300 6.0 4.3 0.220 2.5 4.0 0.200 2.0 0.0 0.100 0.000 3QFY14 2QFY15 3QFY15 90% of Total Revenue Market share* Programming and Other Costs as % of Subscription Revenues 75% 6% 80% 12% 19% 70% 64% 55% 16% 60% 50% 43% 20% 37% 34% 40% 34% 34% 31% 30% 27% 30% 20% 10% 0% Dish TV Tata Sky Sun Direct Big TV Airtel Digital Videocon D2h Source: Company 12 Note : * Market share based on gross subscribers as on 31st December, 2014 as per market estimates Key Metrics (continued) ARPU (Rs.) * ARPU (Rs.) 177 200 172 163 166 150 151 157 150 150 131 132 138 100 100 50 50 - - FY08 FY09 FY10 FY11 FY12 FY13 FY14 3QFY14 2QFY15 3QFY15 90% of Total Revenue SAC (Rs.) * SAC/ARPU (months) 20 19 3,000 17 2,505 2,383 16 15 2,500 2,224 2,127 2,035 15 14 1,996 13 2,000 1,800 11 1,500 10 1,000 5 30% of Revenue 500 - 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Source: Company Note : * SAC & ARPU taken as Q4 data for respective years. 13 Strategy and Outlook 14 Zing - Phase III & IV Markets Viewership share by genre – 2013* 8.6% 18.0% Sub Brand of Dish TV 12.3% Regional first; regional language 2.6% 8.7% channels , regional look and feel 1.2% Regional first national second; unlike 90% of Total Revenue mainstream brands 18.4% Customized regional content in digital 30.0% picture quality and stereophonic sound Value for money offering; Digital quality picture at cable price Regional GECs, Regional News, Movies & Music Healthy gross margin Hindi GECs Hindi News30% & Moviesof Revenue After successful launch in seven states, English Entertainment & News Zing introduced in ‘Tamil Nadu’ Sports Music, Kids & Infotainment Other Source: * FICCI Frames - 2014 15 High Definition Dish TV Tata Sky Videocon D2h Super Family + Dhamal Mix + Super Gold + Sports Channels Game on HD HD Access Fee HD Access Fee Box Cost HD Focused Compelling HD Rs.