INDIA Operating Indicators 225 Market Highlights 226 Broadband Pay-TV Industry Economics 226 Market Analysis 227-234 Key Pay-TV & Broadband Companies: Operating Indicators 235-236 Hathway Cable & Datacom 235 DEN Networks Limited 235 IndusInd Media & Communications (InCable) 235 Siti Cable Network 235 You Broadband India Private Limited 235 Ortel Communications 235 Digicable Network (India) Private Limited (incl. Fastway Transmission Pvt. Ltd.) 235 Asianet Satellite Communications 235 Dish TV India 236 Tata Sky 236 Sun Direct TV (P) Ltd 236 Reliance Digital TV 236 Bharti Telemedia (Airtel Digital TV) 236 Videocon d2h 236 DD Freedish 236 NXT Digital 236 (Continued overleaf)
INDIA (continued) Key Pay-TV & Broadband Companies: Financial Indicators 237 Hathway Cable & Datacom 237 DEN Networks Limited 237 Siti Cable Network 237 Ortel Communications 237 Dish TV India 237 Tata Sky 237 Sun Direct TV (P) Ltd 237 Reliance Digital TV 237 Bharti Telemedia (Airtel Digital TV) 237 Videocon d2h 237 DD Freedish 237 India Pay-TV & Broadband Market Model: Historicals & Forecasts 238-242
INDIA Operating Indicators ECONOMIC INDICATORS Y/E DEC. 2015 Population (mil.) 1,259.3 Total Households (HH) (mil.) 277.0 Nominal GDP (US$ bil.) 2,182.6 Nominal GDP Per Capita (US$) 1,688.4 Real GDP Growth (%) 7.3% Average Exchange Rate (Rs:US$) 64.0 MAJOR MEDIA INDICATORS Y/E DEC. 2015 TV Households (TVHH) (000) 175,013 % Penetration/Total Households (%) 63.2% Total Net Advertising Revenue (US$ mil.) 7,164.7 % of Nominal GDP (%) 0.3% Total Net TV Advertising Revenue (US$ mil.) 3,050.9 % of Nominal GDP (%) 0.1% % of Total Net Advertising Revenue (%) 42.6% TELECOMMUNICATIONS INDICATORS Y/E DEC. 2015 Fixed Line Subscribers (000) 25,518 % Penetration/Households (%) 9.2% Mobile Subscribers (000) 912,056 % Penetration/Population (%) 72.4% PAY-TV INDICATORS Y/E DEC. 2015 Total Pay-TV Subscribers (000) 145,041 % Pay-TV Penetration/TV Homes (incl. subs that subscribe to multiple platforms) (%) 79.5% Digital Pay-TV Subscribers (000) 80,369 % Digital Subs Penetration/TV Homes (incl. subs that subscribe to multiple platforms) (%) 42.6% % Digital Subs Penetration/Pay-TV Subs (%) 53.5% Pay-TV ARPU/Month (US$) 3.2 Total Pay-TV Industry Revenue (US$ mil.) 8,497.1 Net Pay-TV Advertising Revenue (US$ mil.) 2,984.7 Pay-TV Subscription Revenue (US$ mil.) 5,512.5 Annual Pay-TV ARPU as a % of GDP Per Capita (%) 2.3% BROADBAND INDICATORS Y/E DEC. 2015 Total Broadband (BB) Internet Subscribers (000) 136,550 Fixed (Cable, xdsl, FTTx) (000) 16,550 Wireless (000) 120000 % Fixed BB Penetration/Total Households (%) 6.0% % Wireless BB Penetration/Population (%) 9.5% Fixed BB ARPU/Month (US$) 7.9 Fixed BB Subscription Revenue (US$ mil.) 1,527.8 SUMMARY PAY-TV & BROADBAND INDICATORS Y/E DEC. 2015 Total Industry Revenue (Pay-TV & Broadband) (US$ mil.) 10,024.9 % Pay-TV (%) 84.8% % Broadband (%) 15.2% Total Industry Revenue as % of GDP (%) 0.5% Pay-TV % (%) 0.4% Broadband % (%) 0.1% Notes: 1. Economic Indicators from IMF, Government of India and consensus economist estimates 2. Major Media Indicators from Media Partners Asia research; advertising data calculated by Media Partners Asia, based on analysis of media owners and data from TAM Media Research (AdEx India) and GroupM 3. Telecommunications Indicators based on data from Trai and telecom carriers 4. Pay-TV & Broadband Indicators from Media Partners Asia research and company data and Trai 5. Advertising estimates are net, calculated after discounts and excluding agency income 2016 Media Partners Asia, Ltd. All rights reserved Asia Pacific Pay-TV & Broadband Markets 2016 225
INDIA Market Highlights»» Market metamorphosis. The economy expanded by 7.3% in real terms over 2015. Future growth should remain strong, which will support solid gains in the pay-tv industry. Digital cable deployment continued its rollout in Phase III markets, while DTH also made significant inroads. BARC s expansion into rural markets has recalibrated TV ratings, capturing lowerincome viewership on regional free-to-air channels. The new BARC ratings has helped India s only free satellite platform, Prasar Bharati s Freedish, generate strong growth. Reliance Industries 4G service Jio, which accesses over 300 live channels, has the potential to disrupt. Several alternative platforms are also emerging, including Headend-in-the-Sky (HITS) services and a variety of OTT offerings. The pay-tv sector needs more capital, and is likely to undergo further consolidation. The government permitted 100% FDI in DTH, cable networks, mobile TV and HITS businesses in Nov. 2015.»» Pay-TV outlook. The pay-tv industry generated US$8.5 bil. in sales in 2015, and is on course to reach US$9.4 bil. in 2016. MPA projects a 9% CAGR to 2021 as total industry sales top US$14.5 bil., growing thereafter to ~US$18 bil. by 2025. Pay- TV penetration, including multiple subs in a home, should remain stable at ~80% of TV homes over 2016-25, although digital pay-tv subs are projected to grow from 93 mil. to 129 mil. over the same period. Cable will remain pay-tv s largest platform, but its share of pay-tv subs is expected to decline from 70% in 2015 to 60% in 2025, as DTH attracts the majority of new subscribers. By 2025, 30% of pay-tv subs will still be on analog networks.»» Broadband outlook. The growth of broadband will foster non-linear consumption. All major broadcast networks are investing meaningfully in online video platforms. India will remain a primarily wireless broadband market with the adoption of 3G and 4G technologies, although fixed broadband growth (cable Docsis and fiber) will provide a strong foundation for premium long-form and HD video services. Mobile broadband penetration will surge from 14% per capita in 2015 to 58% by 2025, as fixed broadband household penetration grows from 6% to 14% over the same period. Broadband Pay-TV Industry Economics 2011 2016 2021 2025 % CAGR 2016-21 % CAGR 2016-25 TV Homes (000) 147,893 181,114 206,480 222,330 2.7% 2.3% % Pen./Total HH (%) 59.9% 63.8% 66.5% 69.0% PAY-TV Pay-TV Subs (000) 123,242 151,574 175,923 183,416 3.0% 2.1% Cable (000) 93,742 102,292 107,693 110,643 1.0% 0.9% Analog (000) 88,742 58,150 52,574 54,438 Digital (000) 5,000 44,142 55,119 56,205 DTH (000) 29,500 49,282 68,230 72,773 6.7% 4.4% % Pay-TV Pen./TVHH (incl. subs that subscribe to multiple platforms)* (%) 82.0% 80.2% 81.7% 79.0% % Analog/TVHH (%) 60.0% 32.1% 25.5% 24.5% % Digital/TVHH (%) 22.0% 48.1% 56.2% 54.6% % HD Digital (%) 0.3% 4.9% 8.8% 9.7% Pay-TV ARPU/Month (US$) 2.8 3.3 4.1 4.5 4.1% 3.3% BROADBAND Total Broadband Internet Subs (000) 13,306 192,260 650,473 829,799 27.6% 17.6% Fixed (Cable, xdsl, FTTx) (000) 12,841 17,460 28,340 44,330 Wireless (000) 465 174,800 622,133 785,469 % Fixed BB Pen./Total HH (%) 5.2% 6.2% 9.1% 13.8% % Wireless BB Pen./Population (%) 0.04% 13.8% 47.3% 58.1% Fixed Broadband ARPU/Month (US$) 2.8 3.3 4.1 4.5 4.1% 3.3% INDUSTRY REVENUE SUMMARY Total Pay-TV Industry Revenue (US$ mil.) 5,925 9,372 14,540 17,983 9.2% 7.5% Subscription (US$ mil.) 3,971 5,938 8,520 9,805 7.5% 5.7% Analog (US$ mil.) 2,904 1,612 1,281 1,320 SD (US$ mil.) 1,003 3,561 5,460 6,244 HD (US$ mil.) 19 656 1,604 2,024 VAS (DVR, VOD, NVOD/PPV, TVE) (US$ mil.) 44 109 176 218 Advertising (US$ mil.) 1,955 3,434 6,019 8,178 11.9% 10.1% Fixed Broadband Sub Revenue (US$ mil.) 1,236 1,595 3,253 6,253 15.3% 16.4% Total Fixed Broadband Pay-TV Industry Revenue (US$ mil.) 7,161 10,967 17,793 24,236 10.2% 9.2% * Analysis assumes ~10-20% of DTH subs also subscribe to cable Source: MPA research estimates Asia Pacific Pay-TV & Broadband Markets 2016 226
INDIA Market Analysis Macro Summary We highlight key trends in the economy and the pay-tv industry:»» A robust domestic economy. Real GDP grew 7.3% in 2015, and is expected to accelerate to 7.5% in 2016 as normal monsoons return and domestic consumption further strengthens. The country has become the largest destination of greenfield FDI globally (US$63 bil. versus ~US$57 bil. for China). Higher government infrastructure spending, especially in rural areas, mitigates downside risks associated with any slowdown in private capital investment. The IMF forecasts GDP growth to gradually grow to 7.8% in 2021.»» A strong ad market. The improving economy boosted the ad market, with total advertising and TV advertising both up by almost 11% in 2015. TV is the biggest ad medium, with a 43% share of ad spend. Pay-TV accounted for 94% of TV advertising in 2015. MPA forecasts indicate that pay-tv advertising will grow by 15% in 2016, expanding thereafter by a 12% CAGR from 2016-21.»» FDI liberalized but taxation remains onerous. The government permitted 100% FDI in DTH, cable networks, mobile TV and headend in the-sky (HITS) businesses in Nov. 2015. Platform profitability, however, has been hurt by additional taxes, including a service tax increase from 12% to 14%, as well as environmental and infrastructure levies equaling 1% of revenues. Entertainment taxes were raised in certain states, including Delhi. With larger cable digitalization phases rolling out, DTH and cable companies have been granted some tax reprieves, although this benefit was negated in 2015 by a 5% depreciation of the rupee. The sector still needs capital and additional incentives, including tax relief.»» Significant headroom for linear pay-tv. India s pay-tv industry added 4.6 mil. new subs during 2015. Total industry subs grew to 145 mil., ~80% penetration of TV homes. Average pay-tv ARPUs were only US$3.2, with 45% of pay households still on analog networks. Historically, DTH has driven much of digital pay-tv growth. At end-2015, DTH subs totaled 44 mil., while digital cable subs totaled 36 mil. Digitalizing India s 65 mil. analog subscribers is a major opportunity for cable, DTH and other emerging alternative pay-tv platforms. MPA forecasts that 70% of India s pay- TV base will be digitalized by 2025. Pay-TV Market»» Progress on cable digitalization. Despite resistance from several states, more than 85% of TV homes in phase III markets (i.e. remaining urban centers not covered by phases I and II) have been digitalized. Digital cable has done well to attain a 30% share in phase III areas, which tend to be DTH strongholds. More than 50% of cable headends in phase III markets provide feeds to contiguous towns, some of which fall under phase IV. These locations should be digitalized earlier than initially expected. In price-sensitive regions, free satellite (i.e. Prasar Bharati s DD Freedish), poses a challenge to private DTH players. Freedish recently transitioned to a new satellite, GSAT-15, and is aggressively expanding its suite of channels.»» New pricing reforms to determine pay-tv economics. More than 50% of India s pay-tv households are now digitalized. As digital pay-tv s market share grows, existing wholesale tariff rates linked with non-addressable systems are becoming increasingly irrelevant. In Jan. 2016, the Telecom Regulatory Authority of India (TRAI) introduced a consultation paper that recommends an overhaul of wholesale and retail TV channel pricing. A new pricing framework, likely to be announced in the third quarter of 2016, will have a major bearing on future ARPUs and pay-tv economics.»» Cable needs additional capital. After four years of cable digitalization, national MSOs have yet to recoup their initial investments. Leading MSOs are fully leveraged. As of FYE March 2016, consolidated gross debt for the top three MSOs totaled US$600 mil., or 5.1x their annual operating profits. Asia Pacific Pay-TV & Broadband Markets 2016 227
INDIA Leading MSOs and members of the All India Digital Cable Federation (AIDCF) have taken several joint decisions to improve the prospects for digital cable, addressing churn, pricing, packaging and prepaid services. Set-top box (STB) subsidies were reduced for example, lowering industry subscriber acquisition costs from Rs1,100 (US$17.2) per sub at the time of digitalization in phase I markets to Rs300 (US$4.7) per sub in phase III. The cable industry is estimated to have deployed 10 mil. STBs in phase III markets by end-2015. Net realizations to MSOs in phases I and II remained below par in 2015, at Rs100 (US$1.6) and Rs80 (US$1.3) respectively. MSOs introduced a simplified two-tier packaging and repricing strategy in early 2016 to address this issue. Operators in these markets offer a Hindi-centric pack (Hindi GECs, movies, free-to-air channels) averaging at Rs330 (US$5.2) per month, and a premium plan (with additional English content) at Rs425 (US$6.6) per month. This repricing should improve net realizations for MSOs to Rs120-125 (~US$1.9) per month in both phase I and phase II areas. MSOs have also decentralized their subscriber management systems from the distributor to the LCO level, which improves LCO accountability and efficiency. Following Siti Cable s introduction of its OYC (own your customer) online application, Hathway launched Hathway Connect, a dedicated portal for LCOs, which enables online activation for new customers (e-caf) as well as package management, payment options and other key functions. Improved functionality makes it easier for MSOs to resolve payment issues.»» Top MSOs driving STB deployment. India s top three MSOs have deployed 25 mil. STBs, which account for 65% of total cable STB deployment: Hathway. With a reach of 12 mil. homes, Hathway is a leading MSO. As of Dec. 2015, Hathway digitalized 80% of its footprint and will become the first major MSO to digitalize its entire network. Hathway is focusing on improving net realizations for its cable business and building scale in its high-arpu broadband business. Den. Den reaches 13 mil. homes, skewing to phase III and IV markets. As digitalization commenced in these markets, Den deployed 1.7 mil. STBs in 2015. In early 2016, Den diluted its stake in several non-core assets, including a 55% holding in a football franchise. It has also exited distribution JV Star-Den. There is speculation that Siti Cable may acquire Den s core video business. Siti Cable. Siti Cable has 12.2 mil. households, with 7.9 mil. digital subs. With a US$100 mil. promoter-backed funding plan, Siti s management intends to expand the business organically as well as through acquisitions. With broadband, Siti plans to invest US$45 mil. per year over several years to establish an efficient hybrid Docsis 3.0 broadband infrastructure.»» R-Jio: The elephant in the room. Reliance Industries soft-launched R-Jio in Dec. 2015, bundling its 4G offering with free and unlimited voice, video, data and SMS under its own brand of Lyf smartphones. As of June 2016, R-Jio had over 1 mil. 4G subs with free access to eight R-Jio premium apps, including Jio Play, its live TV service. Jio Play has over 300 live channels, including offerings from all the major broadcasters. Most of Jio s 4G subs are active users of Jio Play. While R-Jio has yet to unveil its pricing and bundling plans, the product has the potential to disrupt traditional pay-tv distribution in urban markets.»» Free-to-air impacts DTH. In 2015, the DTH pay-tv sector added 11 mil. gross subs, and 3 mil. net active subs. Active subs totaled 44.2 mil. Active HD subs grew from 4 mil. to 6 mil., as appropriate tiering helped boost uptake. HD services, which costs US$2/month, also helped drive up ARPUs 10%, to US$4.1. DTH revenues grew from US$1.7 bil. to US$2.0 bil. during the year. Asia Pacific Pay-TV & Broadband Markets 2016 228
INDIA BARC s rural TV ratings measurement has prompted the launch of numerous free-to-air channels targeting rural audiences on Freedish, the government s free satellite platform. Freedish, with 96 channels, is gaining traction in phase III and IV markets, particularly in Uttar Pradesh, Bihar, Madhya Pradesh, Rajasthan and West Bengal. To compete more effectively, leading DTH operators introduced entry packs at Rs99 (US$1.5) per month in 2015. While uptake of these packs has been muted, they can potentially increase subs growth, albeit with lower ARPUs. Historically, the primary drivers for ARPU growth have been repriced SD packs and HD services. Going forward, valueadded services (VAS) will increasingly differentiate pay platforms and drive ARPU expansion. In an evolving non-linear video ecosystem, leading DTH operators aspire to aggregate both linear and on-demand content. Tata Sky, Videocon d2h and Airtel Digital should launch hybrid set-top boxes in the latter half of 2016, allowing integration with domestic and international OTT operators. India s top DTH players should generate positive free cash and net profits over 2016-17. Key trends at the top four operators are summarized below: Dish TV. Dish TV saw healthy gross subscriber additions in 2015, gaining market share. ARPU growth was modest. Dish TV is expected to generate Rs 5 bil. (US$78 mil.) in free cash for FYE March 2017, which should finance a significant portion of its incremental capital expenditure. Airtel. Airtel s DTH revenues grew by 16% in 2015, primarily due to strong subscriber additions. ARPUs grew 7% during the year. Sustaining similar levels of growth will be challenging as it penetrates deeper into rural markets, although it is accruing benefits of operating leverage, with an 11.1 mil. net subscriber base. Ebitda grew by 65% during the year to Rs9.3 bil. (US$145 mil.) with an effective 34% margin. Tata Sky. Tata Sky leads the DTH industry in subscribers and revenues. It also owns a 55% subscriber share in the expanding HD segment. Its premium urban subs, however, could become vulnerable to OTT video aggregators. Videocon d2h. A successful Nasdaq listing in 2015 has strengthened Videocon d2h s balance sheet. Improving profits over 2016 should reduce the company s net-debt to Ebtida ratio, from 4x pre-ipo to less than 2x. While subscriber growth slowed in 2015, nearly 60% of its existing subscribers are on the basic pack. As a result, upselling to higher-arpu packs is feasible.»» Shifting sands in channel broadcasting. In 2015, the pay-tv channels sector generated US$4.2 bil. in aggregate revenue, up 14% Y/Y. The revenue mix stood at 70:30, skewed in favor of ad sales. Maintaining strong future growth will require channel operators to manage several structural changes, including: (1) Increased importance of rural markets under BARC s new TV ratings system; (2) Changing norms on channel pricing; (3) A rise in OTT video services. Pay-TV channel advertising revenues grew 11.2% in 2015 to ~US$3 bil., despite a ratings blackout during the migration to the new measurement system. Hindi general entertainment remains dominant, with over one third of TV ad spend. Regional channels are gaining share, thanks to the measurement of rural audiences. Affiliate fees for broadcasters reached US$1.3 bil. in 2015 (US$731 mil. from DTH; US$543 mil. from cable). Digital cable contributed 80% of cable subscription revenues for pay-tv channels. Despite strong growth, channel distribution remains in flux. Asia Pacific Pay-TV & Broadband Markets 2016 229
INDIA Under BARC, the ranking of India s top 10 TV channels has changed to include some free-to-air and regional channels. Major networks are launching free-to-air and regional channels to recapture audience share. In already digitalized high- ARPU markets, faster internet speeds at affordable prices are fostering the growth of non-linear video services. All major broadcast networks have rolled out OTT platforms, which primarily function as catch-up services. Advertising is OTT s primary revenue stream, as scarce payment infrastructure limits subscription revenue. Carriage and placement fee (C&P) payouts to cable and pay-dth platforms have remained steady, despite digitalization. In 2015, the total C&P payout was estimated at US$360 mil., up 4% year-on-year. Some broadcast networks are reevaluating the subscription business model and in some cases, like Sony Pal and Aaj Tak, are converting to free-to-air. India s pay-tv market will likely skip the multi-tv monetization phase, as niche genres such as kids, music and English GE and movies have started to gravitate towards OTT. International revenues for channels, which MPA does not model, totaled US$330 mil. in 2015. As linear growth slows in key international markets, digital products will contribute a larger share of incremental international revenues and help undercut piracy. Key trends among domestic majors include: Star. Star s portfolio of national and regional entertainment channels performed well in 2015. The network completed its integration with Maa TV and unveiled regional HD channels in four languages. Underscoring its commitment to sports, Star acquired licenses to launch 10 regional sports channels. Hotstar gained traction in the OTT AVOD segment, and also added an SVOD tier with HBO content. Zee. For FYE March 2016, Zee generated 29% advertising growth while retaining 25%-plus operating margins. The network s near-term outlook remains strong, although operating gains will be partly offset by integration losses at Hindi GE channel &TV, ongoing sports investments, movie production expenses and launch costs for new digital products. Zee has enhanced its focus on international markets, operating 10 local channels across Africa, the Middle East, Russia and Southeast Asia. Zee s international channels generate US$50 mil. in ad revenue. Network18. In 2015, Network18 solidified its channel portfolio through several HD and regional channel launches. The network bridged some missing genre gaps, with forays into Hindi movies and English GE. In early 2016, the entertainment segment housed under Viacom18 launched Voot, an AVOD service. The company is contemplating an SVOD kids offering. In the near term, the group will launch several news-focused digital products. Sony. Sony India s Indian Premier League (IPL) arrangement with ESPN is working well on TV and digital. However, 2016 will be a critical year for the network, as IPL rights come up for renewal. Sony is also looking to expand its regional entertainment channel portfolio, securing five regional channel licenses under the SAB brand. A joint venture with the BBC, meanwhile, adds an infotainment offering to the network.»» Emergence of alternative platforms. Changes in the distribution landscape, together with gaps in traditional pay-tv services, are fostering the growth of new platforms: Headend-in-the-sky (HITS). Currently, Jain TV group (JainHITS) and Hinduja Ventures (NXT Digital) are two active HITS operators in India. The Hinduja Group launched its HITS platform, NXT Digital, in Sept. 2015. Since launch, the platform has been well received by industry stakeholders and started to see a steady pick-up in subscriber volumes. However, delays in issuing digital cable licenses, together with ambiguity over the government s new channel pricing policy, have stalled the growth for NXT Digital s passive/white label business (where cable Asia Pacific Pay-TV & Broadband Markets 2016 230
INDIA operators negotiate content agreements directly with broadcasters). Despite these bottlenecks, NXT Digital still anticipates high demand, and has confirmed orders for 4 mil. STBs. DD Freedish. India s only free satellite platform, Freedish has expanded its channel offering from 64 to 96 channels from mid-2015 to mid-2016. The platform has transitioned to a new satellite, GSAT-15, and will upgrade to MPEG- 4 compression technology in late 2016. The upgrade will allow Freedish to boost its channel offering to 250 by 2017-18. BARC s measurement of rural markets make Freedish a critical free-to-air platform. Mandatory digitalization in rural markets has also helped Freedish add more homes, with an active base estimated at 18-20 mil. homes. Consequently, the platform s carriage fee demands have increased by 50% on average year-on-year. Over-the-top (OTT). India s OTT video market is nascent, generating ~US$145 mil. in revenue in 2015. Rapid growth in digital infrastructure positions the sector for growth, anchored to rising smartphone penetration, increasing numbers of broadband subs and faster internet speeds. Online video market dynamics favor advertising over subscription revenue for the foreseeable future. Online video platforms enjoy significant operational autonomy and have started to attract strategic and financial capital. Numerous new players with deep pockets, both domestic and global, entered the market in 2015-16. Pay-TV Market Forecast MPA projects that 70% of India s pay-tv market will be digitalized by 2025. On-ground enforcement of the government s cable digitalization program, additional FDI and the emergence of alternative platforms will help drive digital subscriber growth. Key assumptions and trends include:»» Quantifying India s pay-tv market. According to MPA, the pay-tv industry generated US$8.5 bil. in sales in 2015. This figure is expected to grow at an 8% CAGR to US$18 bil. in 2025, as pay-tv subs grow from 145 mil. in 2015 to 183 mil. by 2025. Pay-TV penetration, including multiple subs in a home, will remain stable at ~80% of TV homes. Digital pay-tv subs will grow from 80 mil. in 2015 to 129 mil. by 2025. Adjusted for multiple subscriptions, digital penetration of pay-tv subs will trend towards 69% by 2025, versus 54% in 2015. Digital conversion will facilitate a gradual increase in blended pay-tv monthly ARPUs, from US$3.2 in 2015 to US$4.5 in 2025. Analog will still account for 30% of pay-tv subs by 2025.»» Prospects for DTH and cable. India s pay-tv industry added 4.6 mil. net new subscribers in 2015. Much of this growth was driven by DTH, which had a 65% share of net new additions. MPA estimates that active DTH subs will grow from 44 mil. in 2015 to 73 mil. by 2025. HD s share of DTH will increase from 14% in 2015 to 23% by 2025. DTH ARPUs should grow from US$4.1 in 2015 to US$5.4 by 2025, due to greater uptake of HD, higher-value packs and value-added services. Cable will remain the biggest pay-tv platform, although its share of pay-tv subs is expected to decline from 70% in 2015 to 60% in 2025. MPA projects that total digital cable subs (including HITS) will reach 56 mil. by 2025. Digital cable conversion will climb from 36% in 2015 to 51% by 2025. Digital cable ARPU will increase from US$3.6 in 2015 to US$5.7 by 2025. Overall cable ARPU, which includes analog services, will rise from US$2.9 in 2015 to US$3.9 in 2025. Asia Pacific Pay-TV & Broadband Markets 2016 231
INDIA Broadband Market Rapid adoption of wireless broadband will drive broadband growth. In 2015, the broadband industry added 51 mil. net new subs, taking the overall subscriber base to 137 mil. India s internet speeds have steadily improved to an average of 2.8 Mbps across mobile and fixed broadband in late 2015. Wireless broadband represents 88% of the market, and is mainly used for low-bandwidth tasks, including short-form video. The next phase of internet consumption will be attributed to long-form online video and other bandwidth-heavy applications which require a robust broadband infrastructure. Wireless operators, which largely depend on voice services, have started reviving fixed broadband ambitions, either organically or through strategic buyouts of internet service providers (ISPs). India s wireless broadband subscriber base, at 120 mil. in 2015, is expected to grow to 785 mil. by 2025, with 4G gaining significant traction. Most cable MSOs are upgrading their infrastructure to deliver broadband, which will lift uptake of fixed broadband. While the fixed broadband base was stable at 17 mil. subs in 2015, it is expected to grow steadily to reach 44 mil. subs, 14% household penetration, by 2025. Wireless Broadband India will remain predominantly a wireless broadband market, riding on 3G and recently launched 4G services. Telecom incumbents Airtel, Idea and Vodafone have launched 4G services. R-Jio which has a pan-india 4G spectrum license, will also commercially launch 4G services in the second half of 2016. The introduction of 4G is leading to a surge in data traffic. At the same time, telcos remain under pressure to sustain their voice businesses. Operators are optimizing their networks by offloading data traffic from wireless spectrum to wireline networks, primarily based on fiber optics, with only the last mile of wireless infrastructure used to transfer data. Vodafone has invested in You Broadband and acquired fiber backhaul to optimize its network. Additionally, Vodafone will look to enter the lucrative fixed broadband home business by acquiring last mile networks. After releasing additional spectrum in March 2015, TRAI is planning to auction over 2200 MHz of spectrum which will include 4G in Sept. 2016. The telecom industry has criticized spectrum rates as being too expensive. Whether this derails spectrum auctions remains to be seen. Key players in mobile broadband include: R-Jio. Owned by Reliance Industries Ltd (RIL), R-Jio is one of the largest holders of liberalized spectrum across the 800/1800/2300 MHz bands, and is set to launch 4G services in a phased manner in late 2016. RIL has already invested ~US$22 bil., buying spectrum and laying ~250,000 km of fiber infrastructure. R-Jio will offer bundled services to customers, including high-speed data and other digital services such as video conferencing, HD streaming and discounted VOD. The uptake of bundled offerings remains to be tested in India, as consumers have plenty of a-la-carte services from various operators to choose from. Moreover, while R-Jio s launch has been delayed twice, incumbent operators have already rolled out 4G services and are strengthening their 3G networks. Bharti Airtel. Bharti Airtel has become a pan-india 4G service operator across 22 circles through spectrum auctions and acquisitions. Recently, Airtel bolstered its spectrum holding by acquiring additional spectrum from Videocon and Aircel. Ahead of R-Jio s launch, Airtel has the highest number of wireless broadband (3G/4G) towers, at 105,000, as well as a ~210,150 km fiber network. Under the Wynk brand, Airtel offers entertainment services like music, movie and games. Airtel s Wynk Movies also serves as a super-app by aggregating content from five different online video services. Asia Pacific Pay-TV & Broadband Markets 2016 232
INDIA Other incumbent telcos Idea Cellular and Vodafone India have also launched 4G services, but they lag behind Airtel and R-Jio in 4G spectrum. Vodafone India only has 4G services in five circles and plans to spend US$3 bil. to acquire data spectrum in upcoming auctions. Likewise, Idea Cellular, which has 4G spectrum in ten cities, plans to spend US$1.5 bil. in auctions to maximize its footprint. Idea has tied up with Hungama Digital for music content, Eros Now for movies and Zee s Ditto TV for linear television content. Operators are also investing in providing connectivity to their customers through WiFi hotspots. BSNL has already set up 500 WiFi hotspots, with plans for 40,000 by 2018. R-Jio is aggressively rolling out its public WiFi, Jionet, across India. Fixed Broadband India s fixed broadband penetration remains low. Telecom operators like BSNL and Airtel have largely used digital subscriber line (xdsl) technology to provide fixed broadband services. However, xdsl subscribers are declining due to speed limitations and deteriorating copper plants. Operators are also exhausting copper plant capacity. For the cable industry, broadband has shown real promise in terms of bolstering ARPUs. This, combined with lower bandwidth costs (as opposed to high content costs on cable TV), translates to superior per-subscriber economics and relatively robust margins. To provide high-speed internet to their customers, various MSOs have chosen next-generation data over cable services interface (Docsis) and gigabit passive optical network (GPON) fiber-to-the-home (FTTH) network architectures. In addition, certain MSOs are deploying hybrid GPON-Docsis networks, replacing amplifiers with remote cable modem termination systems (CMTS) to reduce network noise and latency. India has ~2.5 mil. cable broadband subs. The cable industry has yet to recoup a large part of its capital deployed from its primary TV business. MSOs face stiff competition from a largely unorganized LCO market, which owns the last mile and provides Ethernet LAN based internet services. A government-promoted Digital India program aims to connect 250,000 local administrative regions (Gram Panchayats or GPs) via a fiber network for affordable broadband. It is behind schedule however, with right-of-way (RoW) being one of its biggest hurdles. Other issues, such as material supply constraints, labor availability and a fragmented approach towards project implementation, have added to the difficulties. As of early 2016, 80,000+ km fiber had been laid, covering only ~36,740 GPs. Key players in India s fixed broadband market include: BSNL. The Indian state-owned telco has a ~60% share of the fixed broadband market. Due to an erosion in xdsl subs, the operator is upgrading to next-generation copper technologies (VDSL and G.Fast). BSNL is also migrating to fiber-based networks that offer higher speeds and greater bandwidth. In order to compete with private fixed broadband operators, BSNL has upgraded its minimum broadband speed to 2 Mbps from 512 Kbps, at no extra cost. Hathway. India s leading MSO had 627,000 cable broadband subs at a US$10.5 ARPU at end-2015. While Hathway is upgrading its network to Docsis 3.0, it has soft-launched GPON-FTTH in Kolkata. In early 2016, the company invested US$44 mil. in its network. It currently has 3.3 mil. broadband homes passed. Asia Pacific Pay-TV & Broadband Markets 2016 233
INDIA Siti Cable. Siti s broadband business is at a nascent stage, with 132,000 subs on 0.9 mil. homes passed. Siti plans to transform itself into a broadband company by investing US$45 mil. in broadband annually. It is targeting 3 mil. broadband homes passed by 2017, and 10 mil. homes passed by 2020. At a 20% homes passed conversion rate, Siti has the potential to capture 2 mil. broadband subscribers. There is also ample headroom for ARPU growth from the current level of US$9.4 per month. In the next 12 months, MPA expects the following key trends to play out:»» Lower base pack pricing. Telco incumbents have started to offer 4G services at 3G prices, with more aggressive pricing expected with the launch of Jio s 4G services. Fixed broadband operators will calibrate internet access prices to increase data usage. Operators will encourage customers to sample broadband by introducing lower-cost plans, along with budget-friendly top-ups to boost broadband usage.»» Integration with OTT. Broadband operators will focus on VAS to improve subscriber uptake and product differentiation. Cable MSOs will likely partner with OTT players and launch hybrid boxes that bundle OTT and broadband services. Many telecom operators already offer voice, data and content bundles to attract and retain customers.»» More capital, rich valuations. Fixed broadband assets have started to attract financial and strategic capital at rich valuations. ACT Fibernet received a US$500 mil. valuation for its 0.8 mil. subs from private equity firms TA Associates and Indian Value Fund Advisors (IVFA). Vodafone India, which is contemplating entering the residential fixed broadband business, acquired You Broadband at a US$63 mil. valuation. Asia Pacific Pay-TV & Broadband Markets 2016 234
INDIA Key Pay-TV & Broadband Companies: Operating Indicators COMPANY PLATFORM KEY SHAREHOLDERS KEY PEOPLE SUBS BY SERVICE MONTHLY ARPU BY SERVICE WEBSITE Hathway Cable & Datacom (Hathway) Cable TV Broadband (HFC Cable, Docsis 3.0) Rajan Raheja Group Jagdish Kumar G Pillai, MD & CEO Cable Paying Subs: 6,800,000 Digital Cable TV: 9,600,000 Cable Broadband: 567,000 (Dec. 2015) Digital Cable TV: US$3 Cable Broadband: US$11 (Dec. 2015) hathway.com Den Networks Limited Cable TV Broadband (Docsis 3.0) Sameer Manchanda Sameer Manchanda, Chairman & MD Digital Cable TV: 8,500,000 Cable Broadband: 76,000 (Dec. 2015) Digital Cable TV: US$3 Cable Broadband: US$12 (Dec. 2015) dennetworks.com IndusInd Media & Communications (InCable) Cable TV Broadband (HFC Cable, GPON) Hinduja Ventures Tony D Silva, MD & CEO Digital Cable TV: 2,600,000 Cable Broadband: 35,939 (Dec. 2015) Digital Cable TV: US$3 Cable Broadband: US$6 (Dec. 2015) incablenet.com Siti Cable Network Cable TV Broadband (Docsis 2.0, Docsis 3.0, EoC) Cyquator Media Services Pvt Ltd (Essel Group) VD Wadhwa, CEO Digital Cable TV: 6,800,000 Cable Broadband: 107,000 (Dec. 2015) Digital Cable TV: US$3 Cable Broadband: US$9 (Dec. 2015) siticable.com You Broadband India Private Limited Broadband You Mauritius (backed by TRG Management LP) EVS Chakravarthy, CEO Broadband: 510,483 (Dec. 2015) n/a youbroadband.in Ortel Communications Cable TV Broadband (Docsis 2.0, Docsis 3.0, MEN, EoC) Metro Skynet Ltd Bibhu Prasad Rath, President & CEO Analog Cable TV: 426,427 Digital Cable TV: 132,339 Broadband: 67,709 (Dec. 2015) Analog Cable: US$2 Digital Cable: US$3 Broadband: US$6 (Dec. 2015) ortelcom.com Digicable Network (India) Private Limited (incl. Fastway Transmission Pvt. Ltd.) Cable TV Broadband (EoC, GPON) Steller Interactive Media Private Limited Jagjit Singh Kohli, MD & CEO Digital Cable TV: 3,700,000 Cable Broadband: 45,288 (Dec. 2015) Digital Cable TV: US$3 Cable Broadband: US$7 (Dec. 2015) digicable.in Asianet Satellite Communications Cable TV Broadband (EoC, Docsis 2.0, Docsis 3.0, FTTH) Rajan Raheja Group G. Sankaranarayana, President & CEO Digital Cable TV: 1,140,000 Analog Cable TV: 130,000 Cable Broadband: 163,092 (Dec. 2015) Digital Cable: US$3 Broadband: US$10 (Dec. 2015) asianet.co.in Continued overleaf Asia Pacific Pay-TV & Broadband Markets 2016 235
INDIA Key Pay-TV & Broadband Companies: Operating Indicators (continued) COMPANY PLATFORM KEY SHAREHOLDERS KEY PEOPLE SUBS BY SERVICE MONTHLY ARPU BY SERVICE WEBSITE Dish TV India DTH Satellite Direct Media Distribution Ventures Pvt Ltd Subhash Chandra, Chairman DTH Gross Subs: 20,980,000 (Dec. 2015) DTH: US$3 (Dec. 2015) dishtv.in Tata Sky DTH Satellite Tata Sons Harit Nagpal, CEO DTH Gross Subs: 17,560,000 (Dec. 2015) DTH: US$5 (Dec. 2015) tatasky.com Sun Direct TV (P) Ltd DTH Satellite Sun TV R Mahesh Kumar, CEO DTH Gross Subs: 10,300,000 (Dec. 2015) DTH: US$3 (Dec. 2015) sundirect.in Reliance Digital TV DTH Satellite Reliance ADA Group Anil Ambani, Chairman DTH Gross Subs: 4,960,000 (Dec. 2015) DTH: US$4 (Dec. 2015) reliancedigitaltv.com Bharti Telemedia (Airtel Digital TV) DTH Satellite Bharti Airtel Shashi Arora, CEO DTH Gross Subs: 16,400,000 (Dec. 2015) DTH: US$4 (Dec. 2015) airtel.in Videocon d2h DTH Satellite Videocon Anil Khera, CEO DTH Gross Subs: 14,950,000 (Dec. 2015) DTH: US$3 (Dec. 2015) videocond2h.com DD Freedish DTH Satellite Prasar Bharati Corporation Ashok Jha, Deputy Director General (Engineering) DTH Gross Subs: 20,000,000* (Dec. 2015) n/a dddirectdth.com NXT Digital HITS Hinduja Ventures Limited Tony D Silva, CEO Digital Subs: 22,000 (Dec. 2015) n/a nxtdigital.in Notes: * MPA Research Estimates All financial data based on average exchange rate of US$1 = Rs64 Source: Company Data; MPA analysis 2016 Media Partners Asia, Ltd. All rights reserved Asia Pacific Pay-TV & Broadband Markets 2016 236
INDIA Key Pay-TV & Broadband Companies: Financial Indicators COMPANY FYE REVENUE (US$ MIL.) EBITDA (US$ MIL.) % MARGIN Hathway Cable & Datacom Mar. 2016 325 61 19% Den Networks Limited Mar. 2016 197 20 10% Siti Cable Network Mar. 2016 186 47 25% Ortel Communications Mar. 2016 29 8 26% Dish TV India Mar. 2016 478 160 33% Tata Sky Mar. 2016 698 175 25% Sun Direct TV (P) Ltd Mar. 2016 180* n/a - Reliance Digital TV Mar. 2016 70* n/a - Bharti Telemedia (Airtel Digital TV) Mar. 2016 456 156 34% Videocon d2h Mar. 2016 446 123 28% DD Freedish Mar. 2016 23* n/a - Note: * MPA Research Estimates All financial data based on average exchange rate of US$1 = Rs64 Source: Company Data; MPA analysis 2016 Media Partners Asia, Ltd. All rights reserved Asia Pacific Pay-TV & Broadband Markets 2016 237
INDIA Pay-TV & Broadband Market Model: Historicals & Forecasts BASE INDICATORS Y/E Dec. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Population (000) 1,148,093 1,165,722 1,182,329 1,211,343 1,223,457 1,235,691 1,248,048 1,259,281 1,269,355 1,278,241 1,287,188 1,296,199 1,305,272 1,314,409 1,323,610 1,332,875 1,342,205 1,351,600 Total Households (HH) (000) 223,233 231,046 239,133 247,024 254,682 262,322 269,667 276,948 283,872 290,401 295,918 300,949 305,764 310,351 314,385 317,529 320,069 322,310 TV Households (TVHH) (000) 126,552 133,654 140,857 147,893 154,895 161,807 168,510 175,013 181,114 186,897 192,280 197,305 202,030 206,480 210,730 214,780 218,630 222,330 % TV Pen./Total HH (%) 56.7% 57.8% 58.9% 59.9% 60.8% 61.7% 62.5% 63.2% 63.8% 64.4% 65.0% 65.6% 66.1% 66.5% 67.0% 67.6% 68.3% 69.0% CABLE TV Y/E Dec. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Cable TV Subs (000) 83,156 87,501 91,183 93,742 95,744 97,597 99,303 100,891 102,292 103,543 104,693 105,768 106,768 107,693 108,543 109,318 110,018 110,643 Analog (000) 80,872 84,267 87,268 88,742 81,109 69,627 72,827 64,672 58,150 54,431 53,155 52,662 52,536 52,574 52,869 53,305 53,858 54,438 Digital (000) 2,284 3,234 3,915 5,000 14,635 27,970 26,476 36,219 44,142 49,112 51,538 53,106 54,232 55,119 55,674 56,013 56,160 56,205 SD (000) 2,284 3,234 3,915 5,000 14,635 27,970 26,476 36,219 44,142 49,112 51,538 53,106 54,232 55,119 55,674 56,013 56,160 56,205 HD [Note: HD is a subset of SD] (000) - - - 3 47 75 110 243 743 1,458 2,172 2,800 3,372 3,800 4,086 4,372 4,658 4,943 % Change (%) 6.9% 5.2% 4.2% 2.8% 2.1% 1.9% 1.7% 1.6% 1.4% 1.2% 1.1% 1.0% 0.9% 0.9% 0.8% 0.7% 0.6% 0.6% % Cable TV Pen./TVHH (%) 65.7% 65.5% 64.7% 63.4% 61.8% 60.3% 58.9% 57.6% 56.5% 55.4% 54.4% 53.6% 52.8% 52.2% 51.5% 50.9% 50.3% 49.8% Analog (%) 63.9% 63.0% 62.0% 60.0% 52.4% 43.0% 43.2% 37.0% 32.1% 29.1% 27.6% 26.7% 26.0% 25.5% 25.1% 24.8% 24.6% 24.5% Digital (%) 1.8% 2.4% 2.8% 3.4% 9.4% 17.3% 15.7% 20.7% 24.4% 26.3% 26.8% 26.9% 26.8% 26.7% 26.4% 26.1% 25.7% 25.3% Net New Cable TV Subs (000) 5,343 4,345 3,682 2,559 2,002 1,853 1,706 1,588 1,401 1,251 1,150 1,075 1,000 925 850 775 700 625 Analog (000) 3,864 3,395 3,001 1,474 (7,633) (11,482) 3,200 (8,156) (6,521) (3,719) (1,276) (493) (126) 39 295 436 553 580 Digital (000) 1,479 950 681 1,085 9,635 13,335 (1,494) 9,744 7,922 4,970 2,426 1,568 1,126 886 555 339 147 45 % Analog Pen./Cable TV Subs (%) 97.3% 96.3% 95.7% 94.7% 84.7% 71.3% 73.3% 64.1% 56.8% 52.6% 50.8% 49.8% 49.2% 48.8% 48.7% 48.8% 49.0% 49.2% % Digital Pen./Cable TV Subs (%) 2.7% 3.7% 4.3% 5.3% 15.3% 28.7% 26.7% 35.9% 43.2% 47.4% 49.2% 50.2% 50.8% 51.2% 51.3% 51.2% 51.0% 50.8% Addressable VOD Cable Homes (000) - - - - - - - - - - 52 106 217 358 696 1,036 1,404 1,686 As a % of Digital Subs (%) - - - - - - - - - - 0.1% 0.2% 0.4% 0.7% 1.3% 1.9% 2.5% 3.0% Monthly Unit Buy Rate - - - - - - - - 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Total VOD Units (000) - - - - - - - - - - 151 320 674 1,146 2,293 3,517 4,909 6,072 DVR Cable Subs (000) - 9 22 - - 1 4 15 30 50 60 70 80 90 100 110 120 130 As a % of Digital Cable Subs (%) - 0.01% 0.02% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% Addressable PPV/NVOD Cable Homes (000) - - 3,915 5,000 14,635 27,970 26,476 36,219 44,142 49,112 51,538 53,106 54,232 55,119 55,674 56,013 56,160 56,205 Monthly Unit Buy Rate - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Total PPV/NVOD Units (000) - - 4,698 6,002 17,576 33,604 31,822 43,550 53,097 59,100 62,044 63,958 65,340 66,434 67,130 67,566 67,770 67,852 TVE Subs (000) - - - - - - - - - - - - - - - - - - % TVE/Digital Cable TV Subs (%) - - - - - - - - - - - - - - - - - - Average Cable TV Subs (000) 80,485 85,329 89,342 92,463 94,743 96,671 98,450 100,097 101,592 102,918 104,118 105,231 106,268 107,231 108,118 108,931 109,668 110,331 Analog (000) 78,940 82,570 85,768 88,005 84,926 75,368 71,227 68,750 61,411 56,291 53,793 52,908 52,599 52,555 52,722 53,087 53,582 54,148 Digital (000) 1,545 2,759 3,575 4,458 9,818 21,303 27,223 31,347 40,180 46,627 50,325 52,322 53,669 54,676 55,396 55,843 56,086 56,183 SD (000) 1,545 2,759 3,575 4,458 9,818 21,303 27,223 31,347 40,180 46,627 50,325 52,322 53,669 54,676 55,396 55,843 56,086 56,183 HD (000) - - - 2 25 61 93 177 493 1,100 1,815 2,486 3,086 3,586 3,943 4,229 4,515 4,800 Average DVR Subs (000) - 5 16 11-1 3 10 23 40 55 65 75 85 95 105 115 125 Average TVE Subs (000) - - - - - - - - - - - - - - - - - - Cable TV ARPU/Month (US$) 2.6 2.6 2.7 2.7 2.8 2.7 2.8 2.9 2.9 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Analog (US$) 2.6 2.6 2.7 2.8 2.8 2.5 2.5 2.5 2.2 2.2 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Digital (US$) 2.5 2.5 2.6 2.7 3.0 3.2 3.4 3.6 4.0 4.2 4.4 4.6 4.8 5.0 5.1 5.3 5.5 5.7 SD (US$) 2.5 2.5 2.6 2.6 2.9 3.1 3.4 3.6 3.9 4.1 4.3 4.5 4.6 4.8 5.0 5.1 5.3 5.5 HD (US$) - - - 4.4 5.9 5.9 6.1 5.7 6.0 6.1 6.3 6.4 6.6 6.8 6.9 7.1 7.2 7.4 VOD (US$) - - - - - - - - - - 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.9 DVR (US$) - - - - - - - - - - - - - - - - - - PPV/NVOD (US$) - - 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 TVE (US$) - - - - - - - - - - - - - - - - - - % Change (%) 1.2% 2.3% 2.3% 1.8% 0.9% -3.0% 2.4% 3.7% 1.5% 7.1% 2.6% 3.9% 3.4% 3.1% 2.8% 2.5% 2.4% 2.2% Cable TV Sub Revenue (US$ mil.) 2,489.2 2,700.4 2,893.4 3,047.4 3,151.1 3,120.1 3,254.5 3,431.9 3,534.9 3,834.7 3,981.0 4,180.5 4,363.2 4,540.0 4,704.1 4,859.1 5,007.9 5,150.5 Analog (US$ mil.) 2,442.2 2,616.4 2,782.1 2,904.2 2,802.5 2,303.4 2,136.8 2,062.5 1,612.0 1,477.6 1,311.2 1,289.6 1,282.1 1,281.0 1,285.1 1,294.0 1,306.1 1,319.9 Digital (US$ mil.) 47.0 84.0 111.3 143.2 348.6 816.7 1,117.7 1,369.4 1,922.9 2,357.1 2,669.8 2,890.9 3,081.1 3,259.0 3,419.0 3,565.1 3,701.8 3,830.7 SD (US$ mil.) 47.0 84.0 109.4 140.7 339.7 798.6 1,097.7 1,339.1 1,864.9 2,250.8 2,505.9 2,670.4 2,807.3 2,937.7 3,059.8 3,172.7 3,275.1 3,368.8 HD (US$ mil.) - - - 0.1 1.8 4.3 6.8 12.0 35.4 81.0 136.9 192.2 244.4 290.7 327.1 358.7 391.4 425.2 VOD (US$ mil.) - - - - - - - - - - 0.1 0.3 0.5 0.9 1.9 3.0 4.2 5.2 DVR (US$ mil.) - - - - - - - - - - - - - - - - - - PPV/NVOD (US$ mil.) - - 1.9 2.4 7.2 13.8 13.2 18.3 22.5 25.3 26.9 28.0 28.9 29.6 30.3 30.8 31.2 31.5 TVE (US$ mil.) - - - - - - - - - - - - - - - - - - % Change (%) 9.5% 8.5% 7.1% 5.3% 3.4% -1.0% 4.3% 5.4% 3.0% 8.5% 3.8% 5.0% 4.4% 4.1% 3.6% 3.3% 3.1% 2.8% Cable TV Advertising Revenue (US$ mil.) 1,403.5 1,487.2 1,784.4 1,949.6 2,051.8 2,314.1 2,656.3 2,953.1 3,396.1 3,854.6 4,336.4 4,878.4 5,415.1 5,956.6 6,492.7 7,044.5 7,572.9 8,103.0 % Change (%) 15.8% 6.0% 20.0% 9.3% 5.2% 12.8% 14.8% 11.2% 15.0% 13.5% 12.5% 12.5% 11.0% 10.0% 9.0% 8.5% 7.5% 7.0% Total Cable TV Revenue (US$ mil.) 3,892.7 4,187.7 4,677.8 4,997.0 5,203.0 5,434.2 5,910.8 6,385.0 6,931.0 7,689.3 8,317.4 9,058.9 9,778.3 10,496.6 11,196.7 11,903.7 12,580.8 13,253.5 % Change (%) 11.7% 7.6% 11.7% 6.8% 4.1% 4.4% 8.8% 8.0% 8.6% 10.9% 8.2% 8.9% 7.9% 7.3% 6.7% 6.3% 5.7% 5.3% Asia Pacific Pay-TV & Broadband Markets 2016 238
INDIA Pay-TV & Broadband Market Model: Historicals & Forecasts DTH SATELLITE TV Y/E Dec. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 DTH Satellite Subs (000) 7,500 13,500 22,200 29,500 33,618 37,200 41,140 44,150 49,282 54,410 58,800 62,571 65,995 68,230 69,980 71,269 72,227 72,773 SD (000) 7,500 13,500 22,200 29,500 33,618 37,200 41,140 44,150 49,282 54,410 58,800 62,571 65,995 68,230 69,980 71,269 72,227 72,773 HD [Note: HD is a subset of SD] (000) - 5 74 500 1,480 2,550 4,005 6,061 8,114 9,652 10,969 12,289 13,573 14,467 15,211 15,791 16,270 16,543 % Change (%) 237.8% 80.0% 64.4% 32.9% 14.0% 10.7% 10.6% 7.3% 11.6% 10.4% 8.1% 6.4% 5.5% 3.4% 2.6% 1.8% 1.3% 0.8% % DTH Pen./TVHH (%) 5.9% 10.1% 15.8% 19.9% 21.7% 23.0% 24.4% 25.2% 27.2% 29.1% 30.6% 31.7% 32.7% 33.0% 33.2% 33.2% 33.0% 32.7% Net New DTH Subs (000) 5,280 6,000 8,700 7,300 4,118 3,582 3,940 3,010 5,132 5,128 4,390 3,771 3,424 2,235 1,751 1,289 957 546 DVR DTH Subs (000) - 101 260 401 609 810 991 1,109 1,323 1,455 1,541 1,649 1,736 1,761 1,780 1,806 1,832 1,858 As a % of DTH Subs (%) - 0.7% 1.2% 1.4% 1.8% 2.2% 2.4% 2.5% 2.7% 2.7% 2.6% 2.6% 2.6% 2.6% 2.5% 2.5% 2.5% 2.6% Addressable PPV/NVOD DTH Subs (000) 7,500 13,500 22,200 29,500 33,618 37,200 41,140 44,150 49,282 54,410 58,800 62,571 65,995 68,230 69,980 71,269 72,227 72,773 Monthly Unit Buy Rate 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 Total PPV/NVOD Units (000) 13,500 24,932 42,639 59,493 70,510 80,753 92,432 102,666 118,610 135,536 151,598 166,967 182,267 195,035 207,040 218,234 228,906 238,710 TVE Subs (000) - - - - - 100 190 205 226 253 275 297 317 335 349 360 365 365 % TVE/DTH Subs (%) - - - - - 0.3% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% Average DTH Subs (000) 4,860 10,500 17,850 25,850 31,559 35,409 39,170 42,645 46,716 51,846 56,605 60,685 64,283 67,112 69,105 70,625 71,748 72,500 SD (000) 4,860 10,500 17,850 25,850 31,559 35,409 39,170 42,645 46,716 51,846 56,605 60,685 64,283 67,112 69,105 70,625 71,748 72,500 HD (000) - 3 40 287 990 2,015 3,278 5,033 7,087 8,883 10,311 11,629 12,931 14,020 14,839 15,501 16,030 16,406 Average DVR Subs (000) - 51 181 331 505 710 901 1,050 1,216 1,389 1,498 1,595 1,693 1,749 1,771 1,793 1,819 1,845 Average TVE Subs (000) - - - - - 50 145 197 216 240 264 286 307 326 342 354 362 365 DTH ARPU/Month (US$) 3.1 2.9 2.9 3.0 3.2 3.5 3.7 4.1 4.3 4.5 4.6 4.7 4.8 4.9 5.0 5.2 5.3 5.4 SD (US$) 2.9 2.8 2.7 2.8 2.9 3.2 3.3 3.5 3.6 3.6 3.7 3.8 3.9 4.0 4.0 4.1 4.2 4.3 HD (US$) - 7.3 6.6 5.5 5.7 6.2 6.4 7.1 7.3 7.5 7.6 7.7 7.7 7.8 7.9 8.0 8.0 8.1 DVR (US$) - - - - - - - - - - - - - - - - - - PPV/NVOD (US$) 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 TVE (US$) - - - - - 0.8 0.8 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.6 % Change (%) 4.0% -5.1% -1.8% 3.9% 6.2% 11.4% 4.6% 10.4% 5.5% 4.0% 2.9% 2.6% 2.6% 2.3% 2.2% 2.0% 2.0% 1.8% DTH Sub Revenue (US$ mil.) 179.3 367.6 613.7 923.4 1,197.6 1,496.9 1,731.7 2,080.6 2,403.4 2,773.2 3,116.8 3,428.8 3,725.3 3,980.5 4,187.5 4,367.1 4,523.3 4,654.8 SD (US$ mil.) 170.0 350.1 580.9 862.8 1,080.3 1,290.0 1,411.1 1,575.0 1,696.5 1,879.6 2,068.7 2,238.1 2,391.0 2,521.8 2,628.4 2,721.7 2,803.2 2,874.7 HD (US$ mil.) - 0.2 3.1 19.0 67.8 149.4 253.6 431.4 620.8 794.8 937.0 1,067.7 1,199.4 1,313.5 1,404.2 1,481.3 1,547.0 1,598.6 DVR (US$ mil.) - - - - - - - - - - - - - - - - - - PPV/NVOD (US$ mil.) 9.3 17.3 29.7 41.6 49.5 57.0 65.6 73.2 85.0 97.6 109.7 121.5 133.3 143.3 152.9 162.0 170.7 178.9 TVE (US$ mil.) - - - - - 0.5 1.4 1.0 1.1 1.2 1.3 1.5 1.6 1.8 2.0 2.2 2.3 2.5 % Change (%) 252.0% 105.0% 67.0% 50.5% 29.7% 25.0% 15.7% 20.1% 15.5% 15.4% 12.4% 10.0% 8.6% 6.8% 5.2% 4.3% 3.6% 2.9% DTH Advertising Revenue (US$ mil.) - - 0.8 5.1 9.8 19.6 25.2 31.5 37.8 43.9 49.4 54.2 58.5 62.5 66.2 69.5 72.6 75.1 % Change (%) - - - 550.0% 92.3% 100.5% 28.5% 25.3% 19.8% 16.2% 12.5% 9.8% 7.8% 6.8% 5.9% 5.1% 4.3% 3.6% Total DTH Revenue (US$ mil.) 179.3 367.6 614.5 928.4 1,207.3 1,516.5 1,756.8 2,112.1 2,441.2 2,817.1 3,166.2 3,483.0 3,783.8 4,042.9 4,253.6 4,436.7 4,595.8 4,729.9 % Change (%) 252.0% 105.0% 67.2% 51.1% 30.0% 25.6% 15.9% 20.2% 15.6% 15.4% 12.4% 10.0% 8.6% 6.8% 5.2% 4.3% 3.6% 2.9% IPTV Y/E Dec. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 IPTV Subs (000) - - - - - - - - - - - - - - - - - - SD (000) - - - - - - - - - - - - - - - - - - HD [Note: HD is a subset of SD] (000) - - - - - - - - - - - - - - - - - - % of Total xdsl/fttx Broadband Subs (%) - - - - - - - - - - - - - - - - - - % IPTV Pen./TVHH (%) - - - - - - - - - - - - - - - - - - Net New IPTV Subs (000) - - - - - - - - - - - - - - - - - - Addressable PPV/NVOD IPTV Homes (000) - - - - - - - - - - - - - - - - - - Monthly Unit Buy Rate - - - - - - - - - - - - - - - - - - Total PPV/NVOD Units (000) - - - - - - - - - - - - - - - - - - TVE Subs (000) - - - - - - - - - - - - - - - - - - % TVE/IPTV Subs (%) - - - - - - - - - - - - - - - - - - Average IPTV Subs (000) - - - - - - - - - - - - - - - - - - SD (000) - - - - - - - - - - - - - - - - - - HD (000) - - - - - - - - - - - - - - - - - - Average DVR Subs (000) - - - - - - - - - - - - - - - - - - Average TVE Subs (000) - - - - - - - - - - - - - - - - - - IPTV ARPU/Month (US$) - - - - - - - - - - - - - - - - - - SD (US$) - - - - - - - - - - - - - - - - - - HD (US$) - - - - - - - - - - - - - - - - - - VOD (US$) - - - - - - - - - - - - - - - - - - DVR (US$) - - - - - - - - - - - - - - - - - - PPV/NVOD (US$) - - - - - - - - - - - - - - - - - - TVE (US$) - - - - - - - - - - - - - - - - - - % Change (%) - - - - - - - - - - - - - - - - - - IPTV Sub Revenue (US$ mil.) - - - - - - - - - - - - - - - - - - SD (US$ mil.) - - - - - - - - - - - - - - - - - - HD (US$ mil.) - - - - - - - - - - - - - - - - - - VOD (US$ mil.) - - - - - - - - - - - - - - - - - - DVR (US$ mil.) - - - - - - - - - - - - - - - - - - PPV/NVOD (US$ mil.) - - - - - - - - - - - - - - - - - - TVE (US$ mil.) - - - - - - - - - - - - - - - - - - % Change (%) - - - - - - - - - - - - - - - - - - Asia Pacific Pay-TV & Broadband Markets 2016 239