Siti Networks Limited · NSE:SITINET
Siti Networks — Wire and Wireless India — Investor Presentation (November 2006)
32 slides from Siti Networks's investor presentation, November 2006
Slide 1: Wire and Wireless India Limited Corporate Presentation
Wire and Wireless India Limited India’s Leading Cable TV Company Corporate Presentation November 2006
Slide 2: Index
Index 1 Slide No. Â About WWIL 2 Â TV market size 7 Â Competitive scenario 9 Â Our business model 12 Â Our plans 18 Â Investment summary 20 Â Annexure 22 Ready for triple play www.zeetelevision.com WWIL Oct 2006 HK
Slide 3: About WWIL
About WWIL 2 Â WWIL is India’s largest Multi System Operator (MSO) in cable industry. Â WWIL is taking over the cable business of Siti Cable, a 100% subsidiary of Zee Telefilms Ltd through demerger route. Â WWIL is present in 35 cities of India. Operates 52 headends. Â It operates through set of 400
Slide 4: How was WWIL formed
How was WWIL formed 4 Â WWIL is formed through demerger route by splitting cable business of Siticable which is a 100% subsidiary of Zee Telefilms Ltd. Â Appointed Date of Demerger is March 31, 2006. Â Reasons for restructuring: Large opportunity emerging in cable industry, hence strategic busines
Slide 5: WWIL shareholding
WWIL shareholding 5 Wire and Wireless to issue 1 Eq. Shareholders share of WWIL for every 2 Eq. shares of ZTL ZTL to De-merge Cable ZTL Business to WWIL 100% Subsidiary Siti Cable to De-merge its Wire and SITI Cable Cable Business to Wireless WWIL To the shareholder of Siti Cable : WWIL to issue 1 P
Slide 6: WWIL shareholding
WWIL shareholding 6 Proposed Structure Others 7% Mutual Funds 15% Promoters 45% FIIs 33% www.zeetelevision.com WWIL Oct 2006 HK
Slide 7: TV Market Size
TV Market Size 7  Existing revenue of $4 bn on cable 3X of Ad spends!  Fragmented market  Poised for digitization Driven by ` Technology – DTH, Telcos ` Regulatory - CAS ` Customer need for better quality www.zeetelevision.com WWIL Oct 2006 HK
Slide 8: How does it translate into market size
How does it translate into market size 8 Â There would be an estimated 89 million (excluding DTH) homes connected to cable by 2011, accounting for 59% of the total television households in that year. Â ARPU expected to be Rs 470 (USD 10) in 2011. Lower than comparable economies, where it is currentl
Slide 9: Competitive scenario
Competitive scenario 9  There are 8 large MSOs in cable arena and 7,000 independent headends serving 40,000. LCOs  These independent headends control 70% of the market  Besides WWIL - Hathway, Incable, Sumangali, Ortel are existing large MSOs Hathway has presence in Mumbai, New Delhi , Chennai,
Slide 10: CAS acting as a catalyst
CAS acting as a catalyst 10 Current system Under the CAS regime Share of Revenues Pre CAS Post CAS En Local Cable Operators 80% 25% E nc cry pte ry p d sig MSO's 5% 30% na ed t l l Broadcasters 15% 45% s igna l s igna s ign al pte d pt e d MSO Enc ry Need set top box Enc ry to decrypt pay Decrypted
Slide 11: Digital cable economics
Digital cable economics 11 Current Scenario for LCO’s Scenario for LCO’s in the CAS regime Assuming 1000 direct subscribers @ Rs. 200 ARPU (Rs) Assuming 1000 direct subscribers @ Rs. 200 ARPU (Rs) Monthly Revenue (1,000 X Rs. 200) 2,00,000 Monthly Revenue Payment to MSO (200x Rs 230) 46,000 - Free t
Slide 12: Our business model
Our business model 12  Past  Present Local Cable Operators (LCOs) takes Analog : Acquisition and Partnership feed from WWIL (MSO) Model LCOs collect subscription from end user ` Acquisition of 51% interest in LCO LCOs pay fees to MSO based on ` Direct acquisition of subscribers from existi
Slide 13: Progress and Status
Progress and Status 13  Analog acquisitions underway MSO Acquisition ` Completed 7 MSOs in Lucknow, Shimla, Agra, Nagpur ,Pune Jalgaon, Indore ` Under negotiation 15 MSOs in Meerut, Allahabad, Jaipur, Noida, Kohlapur, etc. 0.25 mn subscribers acquired / under-acquisition in over 10 cities  Dig
Slide 14: Convergence
Convergence 14 For the last mile, three interest groups are vying for centre-stage TELCO Primary Expertise: Who will be Voice on Copper the “Lord of - Extremely difficult the Wires” to upgrade to video Triple Play ( 1 Conduit 3 services) CABLE ISP Primary Expertise: Primary Expertise: Video (on coax
Slide 15: Comparison of Access Technology
Comparison of Access Technology 15 Public sector telco’s (twisted Private sector (Fibre to the Kerb) Cable operator (RF/IP) copper) Fibre(large Telephone bandwidth) Exchange Twisted copper - DSL Fibre - ADSL 2+ Ethernet cable Coax cable (100 mbps) 4 GBPS Ethernet cable (100 mbps) Â ADSL2 + signals g
Slide 16: WWIL Competitive Advantage
WWIL Competitive Advantage 16 Â Subscriber Headstart Existing largest MSO Â Three-pronged growth Strategy Analog Cable – acquisition / partnerships ` WWIL plan to increase its subscriber base significantly by aggressive customer acquisition (through LCO partnership – LCO manages network) ` LCO P
Slide 17: WWIL Competitive Advantage
WWIL Competitive Advantage 17 Â Product and Service superiority secure customer relationship Services would included 150+ digital channels, 50+ analog channels One service provider – Multiple services ` High speed broadband internet ` Video on demand ` Pay per view ` EPG ` Digital video record
Slide 18: Our plans: Subscriber ramp-up
Our plans : Subscriber ramp-up 18 City Rollout 80 (No of Cities) 66 66 66 60 42 Â WWIL targets to roll out in 66 cities 40 35 within three years. 20 0 Year 1 Year 2 Year 3 Year 4 Year 5 Cumulative Subscribers 12 (mn) 9.6 10 7.7 3.2 8 Â Three pronged subscriber growth 2.2 5.4 strategy: 6 3.4 1.2 4 1.
Slide 19: What would this lead to
What would this lead to 19 Â Financial Evaluation WWIL: On a high growth trajectory Business to grow from 1.6bn ($ 2006 2012 CAGR (%) 35.5mn) in 2006 to Rs.35bn ($ 761mn) in 2012 WWIL - Subscribers (HH mn) 0.8 9.6 51 EBIDTA margins of 25% by 2012 on - Sales (USD mn) 33.6 761 68 gross revenue bas
Slide 20: Investment summary
Investment summary 20 Â Indian Cable – a US$ 4 billion business, transforming and growing at a rapid pace Third largest TV market in the world (112 mn TV households), expected to grow at 7- 8% over the next 5 years Huge potential arising from ` Conversion of terrestrial to cable ` Analog cable t
Slide 21: Listing timelines
Listing timelines 21  Bombay High Court approved the demerger  Filing of demerger scheme with RoC  Application to SEBI through designated Stock Exchanges for Listing  Allotment of Shares: Record date likely in December 2006  Expected to get listed by Feb, 2007 Opportunity getting unbundled www.
Slide 22: Annexures
Annexures
Slide 23: Zee overview
Zee overview 23  Zee Telefilms Limited (Zee.BO, Zee.NS) is India’s largest vertically integrated media and entertainment company encompassing the content-to-consumer value chain; television content, broadcasting, cable networks, films and music  Among the most popular entertainment brands of India
Slide 24: Current Structure of various businesses
Current Structure of various businesses 24 Current Corporate Structure Promoter Group Shareholders 100% ASC Enterprises Ltd. Zee Telefilms Limited 100% 100% 33% 100% DishTV (DTH) Siticable (cable) Zee News Ltd. * Global Content Business SMS, Mktg & Sales for DTH News & Regional Business  ZTL held 3
Slide 25: Proposed structure of various businesses
Proposed structure of various businesses 25 Structure 1 Structure 2 Structure 3 Structure 4 ZTL Shareholders ZTL Shareholders ZTL Shareholders ZTL Shareholders 100% 100% 80% 57% Zee Telefilms Limited Wire and Wireless (India) Ltd. Zee News Limited ASC Enterprises Limited Global Content Business # Ca
Slide 26: Past financials
Past financials 26 Â WWIL has a Networth of Rs 2.0 billion and Loan funds of 1.0 billion. WWIL Financials www.zeetelevision.com WWIL Oct 2006 HK
Slide 27: Parallel plant for RF + IP
Parallel plant for RF + IP 27 www.zeetelevision.com WWIL Oct 2006 HK
Slide 28: Distribution system
Distribution system 28 www.zeetelevision.com WWIL Oct 2006 HK
Slide 29: HITS structure
HITS structure 29 HITS STRUCTURE Decoder Encoder Rec eiv er HPA Rec eiv er Rec eiv er UPCONV. Rec eiv er QPSKMOD Rec eiv er Rec eiv er T RANSMO D ANALOG HEADEND Decoder Encoder CO MBINER M IRD Encoder U Cable Network X CAS 1 CAS 2 Digital Digital Digital Digital Decoder Decoder Decoder Decoder 1 CAS
Slide 30: Headend in the sky (HITS)
Headend in the sky (HITS) 30 Â HITS – New technology The cable industry has entered an era of demand for quality services on one hand and ever-intensifying competition from cable operators on the other side. It is most suitable mode of C&S TV for large residential complexes and townships. Â Simpli
Slide 31: Glossary
Glossary 31  ARPU: Average Revenue Per User  C & S TV : Cable & Satellite TV  CAS: Conditional Access System  DTH: Direct to Home satellite broadcasting service  DVR: Digital Video Recorder  FTA: Free to Air service  LCO: Local Cable Operator  MSO: Multi System Operator  NRS: National Reade
Slide 32: Disclaimer Thank You
Disclaimer 32 Some of the statements made in this presentation are forward-looking statements and are based on the current beliefs, assumptions, expectations, estimates, objectives and projections of the directors and management of Wire and Wireless India Limited (WWIL) about its business and the in
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