Transcript Document

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
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Millions (Subs.)
2
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%
61%
70%
60%
46%
50%
40%
30%
• Penetration will double
20%
• Revenues will quadruple
10%
0%
PAY TV REVENUES
2000
2006
2011
2015
Pay TV Penetration/TV HH
USD Bn.
2005
2015
Growth
4.3
18.4
320%
Source :
MPA report, March 2007
The DTH category is expected to grow
by 680% or so in the next 7 or 8 years!
40
36.2
37.6
33.8
35
2007 to 2015…Growth of 683 %
30.4
Subscribers (Millions)
30
26.1
25
20.9
20
15
15
9.8
10
4.8
5
0
0.06
0.18
0.75
2003
2004
2005
1.925
2006
2007
2008
2009
Year
2010
2011
2012
2013
2014
2015
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
Consumers
 Consistent and professional service
 Superior video / audio quality
 Multiple channel packages to choose from
Interactivity
 Access to niche content
 Movies on pay-per-view – 800 films
produced in India every year
 Ability to move anywhere across India
w/o buying a new STB
 Extensive rural reach
Broadcasters
 Transparent / auditable platform with
no under-declaration
 New revenue stream
 Convenience of dealing with a single
operator rather than with multiple
MSOs
 Will minimize piracy
Government
 Plug the tax leakage through
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
• National coverage
(Urban & Rural)
• Subscriber Mgmt
Payment, Renewals,
Recoveries
2
VAS
• Focus on Interactive
Services
• PPV
• Alerts
• Red Button promos
• New Innovations
3
Customer
Service
• Outstanding Customer Service
at all Touch Points
24/7 Call Center
Language support
Engineering support
4
Value
• ‘Value’ for money brand
• Quality content
• Relevant packaging
• Exclusive / Niche 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
• 1 Mn subscribers in 1 year…
fastest ever in the world
Middle
Low
EXECUTION
Technology…partnerships
with global leaders
24x7 Call Centres, Over 800 associates,
supporting 11 languages
Professional installations across
the country
3000 engineers across India
CUSTOMER SATISFACTION…best in
class performance scores
Durable Sector
Telecom Sector
Tata Sky
Norms
Best In
Class
Norms
Best In
Class
eQ Index
75
86
74
86
Commitment
Share
66
62
88
Vulnerable
Share
9
9
3
88
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