Vikram Kaushik

Managing Director & CEO

Tata Sky Ltd.
In India it has taken DTH 5 years to get to
6 million plus subscribers!
And Tata Sky crossed 2 Million subscribers in 20
months… the fastest subscriber ramp-up ever by a
DTH platform

2.5
2
2
Millions (Subs.)

1.5
1
1
0.5
0.5
0
0
-06 -0
6
-0
6
-0
7
-0
7 -07 -07 -0
7
-0
7
-0
8
08
g ct ec b r n g ct ec b r-
Au O D Fe Ap Ju Au O D Fe Ap
 The Indian Telecom miracle took
6 years to reach half the DTH number

Wireless Subscriber Growth

Source : COAI Data

 INDIA… 165 Mn Pay TV HHs by 2015
100%
84% 90%
90%
80%
70% 61%
60%

50%
46%
40%
30%
• Penetration will double
20%
• Revenues will quadruple
10%
0%
PAY TV REVENUES
2000 2006 2011 2015

Pay TV Penetration/TV HH

2005 2015 Growth

Source :
USD Bn. 4.3 18.4 320% MPA report, March 2007
 The DTH category is expected to grow
by 680% or so in the next 7 or 8 years!
40 37.6
36.2
35 33.8

2007 to 2015…Growth of 683 % 30.4

30
26.1
Subscribers (Millions)

25
20.9
20

15
15

9.8
10

4.8
5
1.925
0.18 0.75
0.06
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Year Source : MPA report , March 2007
 In 5 years…
We have managed to overtake Japan
as the largest DTH market in Asia

And in the next 5 years (by 2012) we will be

able to add another 30 million subscribers

(which is about the same as the population of

Belgium, Portugal and Greece put-together!)
DTH is a nascent category in its growth phase
 Playing the volume game… DTH in India

Indian cable TV subscribers are currently spending about

1.5 - 2% (US$ 4 - 5) of their monthly income on cable services

Globally, consumers spend 3 - 4% of their

monthly income on pay television services

While this indicates a sizeable growth opportunity,

only a mass service can achieve the economies of
scale to fully exploit the market potential

This clearly is expensive business

(At least in the short-medium run)
But , the Indian market is changing

• Rise in Disposable Incomes

 75% percent rise in per capita income ( 1990 – 2007)

• Appetite for Entertainment is growing


$25 Billion being spent annually by Indians on travel
 45 Million credit card subscribers growing at 35% annually
 10 Million color TVs sold annually
 125 Million TV homes ….have doubled in last 6 years

• Rapid adoption of new technologies by Indians


5 - 6 Million mobile phone subscribers are added every month
 350,000 Satellite TV subscribers added every month Source: NCAER
DTH …congruence of interests for all
stakeholders

Broadcasters
Consumers
 Transparent / auditable platform with
no under-declaration
 New revenue stream
 Convenience of dealing with a single
 Consistent and professional service
operator rather than with multiple
 Superior video / audio quality
MSOs
 Multiple channel packages to choose from
 Will minimize piracy
Interactivity
 Access to niche content
 Movies on pay-per-view – 800 films
produced in India every year Government
 Ability to move anywhere across India
w/o buying a new STB  Plug the tax leakage through
 Extensive rural reach
declaration
 Additional source of revenue – license
fee payable by DTH operators
With its proven, superior technology, value added
services & professional customer service

Along with the ability to offer all India coverage at

low incremental per subscriber cost

(upgrading cable infrastructure across India will need huge

investments & appeal of Broadband service will be
limited to metros & large cities)

DTH is set to win…

 Finding the perfect mix for DTH

1 Reach 2 VAS 3 Customer Service 4 Value

• National coverage • Focus on • Outstanding Customer • ‘Value’ for money
(Urban & Rural) Interactive Service at all Touch brand
Services Points
• Subscriber Mgmt • PPV  24/7 Call Center • Quality content
Payment, • Alerts  Language support • Relevant packaging
Renewals, • Red Button promos  Engineering support • Exclusive / Niche
Recoveries • New Innovations content

Brand Building

Monetising volumes. Improving ARPU.

Tata Sky…setting new standards

Execution

Tata Sky’s Approach

Innovation
 DOING IT DIFFERENTLY

• “To get to the bottom of

the pyramid, start at the top”
Upper
• Make technology
aspirational to early adopters
Middle

• 1 Mn subscribers in 1 year…
fastest ever in the world Low
 EXECUTION
Technology…partnerships Professional installations across
with global leaders the country

24x7 Call Centres, Over 800 associates,

supporting 11 languages 3000 engineers across India
CUSTOMER SATISFACTION…best in
class performance scores

Durable Sector Telecom Sector

Tata Sky
Best In Best In
Norms Norms
Class Class
eQ Index 75 86 74 86 88
Commitment
66 62 88
Share
Vulnerable
9 9 3
Share

Comparison with global industry norms & global best in class scores

Source :
AC Nielsen Customer Satisfaction study , April 2007
Partnership with Global Leaders…
Tata Sky+…taking digital TV to
the next level

the dish will also have a

different look
DTH in India…key imperatives

Reduction in License Fees

Level playing filed with Cable /CAS rollout

Content exclusivity

Burdensome Tax structure

FDI Norms and investment restrictions

To Make Most Of This Opportunity, we need to…

Play the volume game

Address the mass market with a volume-led strategy
Value based pricing will be the key to success

Innovate to differentiate
Adoption of global success…Red button applications
Payment modes
Interactive programming
New VAS & Products ( PVR)
Execute Effectively
Address market complexity
Rapid scale up

Engage and advise the government / Regulator

Develop a pragmatic regulatory framework
Correct current policy anomalies
 In Sum
What is important to recognise is this is a transitory phase
Many players means lots of investment
And only lots of investment will help to grow the market
In the shorter run though competition may trigger lower tariffs
and increase SAC & Cash burn
The need is to focus on :
• Creating Reach to build volume
• Offer affordable pricing
• Innovation to create customer value
& increase ARPU
• Outstanding execution to keep & gain new customers

And

Lots of patience!
Thank you