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

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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% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
PAY TV REVENUES

84% 61% 46%

90%

Penetration will double

Revenues will quadruple

2000

2006

2011

2015

Pay TV Penetration/TV HH
2005 USD Bn. 4.3 2015 18.4 Growth 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

35

33.8

2007 to 2015Growth of 683 %

30
Subscribers (Millions)
26.1

30.4

25
20.9

20 15 10 5 0
0.06 2003 0.18 2004 0.75 2005 4.8 1.925 9.8 15

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

Consumers 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

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

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

VAS

Customer Service

Value

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 Center Language support Engineering support

Value for money brand Quality content Relevant packaging Exclusive / Niche content

Brand Building

Monetising volumes. Improving ARPU.

Tata Skysetting new standards

Execution

Tata Skys 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
Technologypartnerships with global leaders Professional installations across the country

24x7 Call Centres, Over 800 associates, supporting 11 languages

3000 engineers across India

CUSTOMER SATISFACTIONbest in class performance scores

Durable Sector Norms eQ Index Commitment Share Vulnerable Share 75 66 9 Best In Class 86 Telecom Sector Norms 74 62 9 Best In Class 86 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 Leaders

the next level

Tata Sky+taking digital TV to

the dish will also have a different look

DTH in Indiakey 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 successRed 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