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 & revenue size (INR bn.) Broadcasting industry Distribution industry 2019 976 , 50% 387 , 20% 204 ,10% 397 , 20% Multiple broadcasters INR 976 Bn Analog 2019 TV industry size producing content in CAGR of ~ 15.5% 15 languages Cable Digital 2014 475 , 46% 263 , 26% 126 ,12% 161 , 16% (2014-2019E) across 52% Cable 7 genres 20% 2014 INR 475 Bn beaming TV industry size ~800 channels DTH 2009 257 , 44% 175 , 30% 89 ,15% 66 ,11% 28% TV Print Films Others Indian television market statistics (HHs mn.) 2014 2019 301 270 231 Total households 270 Mn 301 Mn 197 169 169 134 140 Total TV households 169 Mn 197 Mn 101 TV penetration (of total HHs) 62% 66% C&S penetration (of TV HHS) 83% 86% 2009 2014 2019 Total HHs TV HHs C&S HHs 3 Source: M&E industry composition & size: FICCI-KPMG 2015, Indian television statistics & broadcasting and distribution industry : MPA Report 2014 Distribution Industry 4 Digital Addressable Systems - DAS Phase I Phase III/IV Digital Penetration of Total Pay-TV Phase II Delhi, Mumbai, Subscribers in India is Amongst the 38 notified cities Calcutta & Chennai Rest of India Lowest * 31-Mar-2013 30-June-2012 31-Dec-2015/2016 India 52% Korea 74% Bulk of the potential DAS converts Cable Sri Lanka 91% Land grab seeding at throw away prices Limited coverage by large MSOs due to Indonesia 100% dispersed population No addressability/KYC Japan 100% Very high DTH recognition Working backwards to fill in the critical gaps; packaging, billing New Zealand 100% and dunning DTH best suited considering terrain Singapore DTH 100% Key target markets with more than 60% Opening up of cable stronghold markets Malaysia 100% incremental potential for DTH Hong Kong 100% Bonus additions for the sector Dish TV Australia 100% Higher incremental net adds; positive shift in subscriber 0% 50% 100% distribution 5 Source: *MPA Report 2014 Distribution Industry - Cable 3 Tiered Structure MSOs Distributors LCOs (at least 1 in each (more than 115 ) (more than locality) 50,000) Pre-DAS Analog signal - limited carrying capacity, broadcasters jostling for PCS Placement & Carriage fees - bulk of MSOs top- line Post-DAS Digital signal - fatter pipe, larger carrying Massive under declaration – ignored to maintain capacity MSOs ‘reach.’ Reason behind LCOs prosperity Placement fees mindset No incentive to raise ARPUs B2B billing 100% postpaid. Element of bad debts? Impairment of Set-Top-Box (STB)? Rising content cost 6 Distribution Industry - DTH DTH Players in India Dish TV: 2003 Industry pioneer. Started operations in 2003. Part of 100% digital the ‘Zee’ stable, largest producer and aggregator of Hindi programming in the Owns last mile subscribers TATA Sky: world Subscription driven top-line Launched in 2006. JV between the TATA Group 2006 and News Corp Fully prepaid, no bad debts Sun Direct: 2007 Fully tax compliant Launched in 2007. JV between Sun Network and DTH contributes ~ 60% of the Astro, Malaysia Reliance Digital: broadcaster’s domestic subscription 2008 revenue; scope for rationalization vs. Part of Reliance cable Communication Ltd, a subsidiary of Reliance ADA group Airtel Digital: Heavily taxed: 2008 Launched in 2008. Part of • License fees – 8% AGR instead of 10% the telecom major Bharti GR (TRAI recommendations on issues Videocon D2h: Airtel. related to new DTH licenses) Launched in 2009. Part of • Entertainment tax & Service tax - to be the white goods 2009 subsumed post rollout of GST manufacturing Videocon group 7 8 Many Firsts To Its Credit First to launch Home Video First to achieve System– operational DishFlix First to offer First to launch First to break-even in unlimited online TV for negotiate the Indian DTH First to be PAT recording DTH viewers – content on a industry positive in the ‘Dish Online’ fixed fee basis Indian DTH industry First to launch Live TV for First to launch a First DTH in First to launch First to be FCF moving sub-brand High positive in the India vehicles targeting regional Definition Indian DTH language markets– industry ‘Zing’ 9 2014 2003 2007 2009 2010 2012 2013 2012 2015 Business Model P&L structure – FY15 Dish TV India Limited 3%3% Subscription revenues 1% 2% Lease rent Consolidated Bandwidth income revenues 100% prepaid Advertising income Other income 91% Upfront subsidy on consumer premises equipment (CPE) Programming and other cost 4% 5% Selling and distribution expenses Average ARPU of Rs. 171* 6% License fees 6% Consolidated 30% Transponder lease expenses Churn at 0.8% p.m. Other operating costs 10% Other expenses Implied average subscriber life of 10 years 12% Employee benefit expenses EBITDA margin - 27.3% 10 Note: * For 2QFY16, excluding impact of service tax hike from 12.36% to 14% w.e.f June 2015 Dish TV vs. Competition Highest transponder capacity Maximum content tie-ups & true HD channels Widest dealer-distributor network 720 (MHz) TP Bandwidth Dish TV Dish TV 48 415 No. of 7 Zonal offices Transponders 16 13 Regional offices Tata Sky 44 336 540 Videocon 10 Videocon 37 389 432 Tata Sky 12 Airtel 33 378 Airtel 396 11 Rel. Digital 12 276 Reliance Digital 324 9 Sun Direct 12 220 Sun Direct 180 4+1 Linear Channels True HD Channels 11 Source: Company & market data as on 15th October 2015 Key Metrics - Annual Market share # ARPU* (Rs.) 200 6% 12% 19% 172 150 16% 163 20% 157 150 151 100 138 27% 131 132 50 Dish TV Tata Sky Sun Direct Big TV Airtel Digital Videocon D2h 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(R) Net subscriber base (mn.) Hardware subsidy* (Rs.) 15 2400 2000 12.9 1,933 10 11.4 1600 10.7 1,688 9.6 8.5 1200 5 5.7 800 4.3 400 2.5 0 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY14 FY15 Source: Company; 12 Note : * ARPU & hardware subsidy taken as Q4 data for respective years. # Market share based on gross subscribers as on 30th September, 2015 as per market estimates (R) Restated post netting off of collection charges Key Metrics - Annual Subscription revenue (Rs. mn.) EBITDA (Rs. mn.) 8000 25,000 24,499 22,681 6000 7,331 6,240 20,000 19,228 5,794 16,639 4000 4,960 15,000 11,927 2000 2,380 1,117 10,000 8,353 0 5,897 (2,084) (1,233) 5,000 3,288 -2000 - -4000 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(R) FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Programming and other costs as % of subscription revenues Net profit/(loss) (Rs. mn.) 1500 70% 71% 31 60% 500 59% -500 (660) 50% (1,331) (1,576)* 52% (1,920) 40% -1500 42% (2,622) 30% 36% -2500 34% 34% 33% 20% -3500 (4,141) 10% -4500 (4,807) 0% -5500 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(R) FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 13 Note : * Including prior period items : (R) FY15 Subscription revenue is restated, netting off of collection charges Key Metrics - Quarterly Net subscriber additions (mn.) ARPU* (Rs.) Subscription revenue (Rs. mn.) 0.5 180 8000 0.4 6000 6,828 6,926 0.390 170 0.3 0.378 173 171 5,944 0.338 4000 0.2 160 166 2000 0.1 0 150 0 2QFY15 1QFY16 2QFY16 2QFY15 1QFY16 2QFY16 2QFY15 1QFY16 2QFY16 EBITDA (Rs. mn.) & EBITDA margin Net profit (Rs. mn.) FCF (Rs. mn.) 3000 50.0% 1200 2500 40.0% 33.9% 900 900 2000 32.1% 30.0% 870 849 2,550 500 600 1500 24.9% 2,368 20.0% 542 689 1000 1,619 100 300 500 10.0% (142) 109 0 0.0% -300 0 2QFY15 1QFY16 2QFY16 2QFY15 1QFY16 2QFY16 2QFY15 1QFY16 2QFY16 14 Note: * ARPU is post netting -off of collections charges. 2QFY16 ARPU is excluding impact of service tax hike from 12.36% to 14% w.e.f.June’2015. Like-to-like number would have been Rs. 174 Strategy and Outlook 15 Zing Phase III & IV Markets Zing Digital Viewership share by genre – 2014* 10% 18% Sub Brand of Dish TV Regional first; regional language channels , 12% regional look and feel 2% 9% 1% Regional first national second; unlike mainstream brands 17% Customized regional content in digital 31% picture quality and stereophonic sound Value for money offering; Digital quality Regional GECs, picture at cable price Regional News, Movies & Music Hindi GECs Healthy gross margin Zing Digital Hindi News & Movies Launched in 8 After successful launch in seven states, English Entertainment & News regional market Sports Zing introduced in ‘Kerala’ Music, Kids & Infotainment Other 16 Source: * FICCI Frames - 2015 High Definition Dish TV Tata Sky Videocon D2h 3 HD ADD-ONS Box Cost Rationalization New Super Game on HD @ Rs.