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Vikram KaushikManaging Director & CEO
Tata Sky Ltd.
In India it has taken DTH 5 years to get to 6 million plus subscribers!
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0.5
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0.5
1
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Aug-06
Oct-06
Dec-06
Feb-07
Apr-07
Jun-07
Aug-07
Oct-07
Dec-07
Feb-08
Apr-08
Millio
ns (S
ubs.
)And Tata Sky crossed 2 Million subscribers in And Tata Sky crossed 2 Million subscribers in 20 months… the fastest subscriber ramp-up 20 months… the fastest subscriber ramp-up ever by a DTH platform ever by a DTH platform
The Indian Telecom miracle took 6 years to reach half the DTH number
Wireless Subscriber GrowthSource : COAI Data
INDIA… 165 Mn Pay TV HHs by 2015
46%
61%
84% 90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2006 2011 2015
Pay TV Penetration/TV HH
• Penetration will double
• Revenues will quadruple
Source :MPA report, March 2007
320%18.44.3USD Bn.Growth20152005
PAY TV REVENUES
320%18.44.3USD Bn.Growth20152005
PAY TV REVENUES
0.06 0.18 0.75 1.9254.8
9.8
15
20.9
26.1
30.4
33.836.2
37.6
0
5
10
15
20
25
30
35
40
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Year
Subs
crib
ers
(Mill
ions
)
2007 to 2015…Growth of 683 %
Source : MPA report , March 2007
The DTH category is expected to grow by 680% or so in the next 7 or 8 years!
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)
• Rise in Disposable Incomes 75% percent rise in per capita income ( 1990 – 2007)
Source: NCAER
• 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
But , the Indian market is changing
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
Monetising volumes. Improving ARPU.
Reach1
Brand Building
VAS2 Customer Service3
• National coverage (Urban & Rural)
• Subscriber Mgmt
Payment, Renewals, Recoveries
• Focus on Interactive Services
• PPV• Alerts • Red Button
promos• New
Innovations
• Outstanding Customer Service at all Touch Points
24/7 Call CenterLanguage supportEngineering
support
Value4• ‘Value’ for money
brand
• Quality content• Relevant
packaging• Exclusive / Niche
content
Innovation
Tata Sky’s Approach
Execution
Tata Sky…setting new standards
DOING IT DIFFERENTLY
• “To get to the bottom of the pyramid, start at the top”
• Make technology aspirational to early adopters
• 1 Mn subscribers in 1 year… fastest ever in the world
Upper
Middle
Low
24x7 Call Centres, Over 800 associates, supporting 11 languages
Technology…partnerships with global leaders
3000 engineers across India
Professional installations across the country
EXECUTION
CUSTOMER SATISFACTION…best in class performance scores
Durable Sector Telecom Sector
Norms Best In Class Norms Best In
ClasseQ Index 75 86 74 86
Commitment Share 66 62
Vulnerable Share 9 9
Tata Sky
88
88
3
Comparison with global industry norms & global best in class scores
Source :AC Nielsen Customer Satisfaction study , April 2007
Partnership with Global Partnership with Global Leaders…Leaders…
the dish will also have a different look
Tata Sky+Tata Sky+……taking digital TV taking digital TV to the next levelto the next level
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
Play the volume gameAddress the mass market with a volume-led strategy
Value based pricing will be the key to success
Innovate to differentiateAdoption of global success…Red button applications
Payment modesInteractive programming
New VAS & Products ( PVR)Execute Effectively
Address market complexity Rapid scale up
To Make Most Of This Opportunity, we need to…
Engage and advise the government / Regulator Develop a pragmatic regulatory framework
Correct current policy anomalies
In SumWhat 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 marketIn 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