Siti Networks Limited · NSE:SITINET
Siti Networks — Q1 FY2018 Earnings Presentation
34 slides from Siti Networks's earnings presentation, August 2017
Slide 1: SITI Networks Limited Q1FY18 Investor Presentation
SITI Networks Limited Formerly known as SITI Cable Network Limited BSE : 532795 | NSE : SITINET | Bloomberg : SCNL:IN | Reuters : SITI.NS www.sitinetworks.com Q1FY18 Investor Presentation 1 SITI Networks Ltd. Confidential 1
Slide 2: Disclaimer
Disclaimer 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 SITI Networks Limited (SITI Networks) about its business and the indust
Slide 3: Contents
Contents Slno Section Pg no 1 Industry Overview 4 2 Company Overview 13 3 Strategy 22 4 Financials & Operating Metrics 26 3
Slide 4: Industry Overview
werwoREs Industry Overview oo | GROUP
Slide 5: Size of Digitization Opportunity
Size of Digitization Opportunity Subscriber Universe, 193 Mn TV Universe Phase 1 Phase 2 Phase 3 & Contiguous areas Phase 4 (18 mn) (22mn) (48mn) (105mn) 31st Oct 2012 Implementation Date (Delhi and Mumbai) 31st Mar 2013 31st Jan 2017 31st March 2017 15th Feb 2013 (Kolkata) DD Terrestrial, Free Dish
Slide 6: Pay TV Market Trends
Pay TV Market Trends Households Growth Trend Key Drivers 203 175 181 On-going Digitization 171 145 147 TV Subscriber ARPU at ~USD4-5 HD penetration at ~1.5% Nascent OTT adoption Wireline Broadband Penetration at 5% CY15 CY16 CY21E Fragmented Industry: 4 national MSOs, 1281 over all TV HH
Slide 7: Revenue Construct
Revenue Construct Current status of MSO Realization Current Cable Market MSO Revenue Size (INR/ Month/ Phase 1 Phase 2 Phase 3 Phase 4 Subscriber) INR24,000 Crores INR5000 Crores Consumer ARPU, paid ~175-200 <175 250+ Tax 225+ Tax to LCO (All Inclusive) (All Inclusive) LCO to MSO ~136 ~90-110 ~46-65
Slide 8: Digital Cable vs. DTH
Digital Cable vs. DTH Parameter DTH Digital Cable Number of Channels 370-380 500 Local Channels No Yes Up-linking/ Down-linking Wired technology gives Signal Quality leads to 10-15% signal loss better signal Resistance to being affected by adverse weather Low High Broadband Cross Sell No Yes Custome
Slide 9: Broadband: India is an opportunity with pent-up Potential
Broadband: India is an opportunity with pent-up Potential! Low Internet Penetration Low Average Internet Speeds ~30% 52% 71% 88% 92% 91% Source : TRAI, Internet Live Stats Source : Akamai With 1 billion Mobile Subscribers And a Young Population 41% : < 20 years 50% : 20-59 years Source : TRA
Slide 10: India will follow global pattern of High Video Consumption
India will follow global pattern of High Video Consumption Video to be 76% of Usage by 2020 …projected to grow 36% CAGR till 2020 …on a dominant HD Content Online Video Consumption Growth 102 Million DVDs equivalent Internet Traffic 2015 Internet Traffic 2020 Non- Video 2014 Non- 24% Video Video 202
Slide 11: What does the Customer Need?
With exploding Internet Consumption ,coupled with Video Usage, what does the Customer Need ? Customer Needs Locations of accessing Internet in India 1 High Speed of 6% Cyber Café Access Only Wireline School/College 12% 6x of average mobile broadband speeds Broadband / On the Go 15% WiFi can provide
Slide 12: SITI Networks targeting ~20% conversion of base by 2021
SITI Networks targeting ~20% conversion of base by 2021 India Internet connections Wireline Subscribers By Technology Internet Subscribers 2.2% per 100 population 5% 7.0% DSL 14.0% Rural 15 Dial Up Ethernet/ LAN 14.9% 61.9% Cable Modem Urban 71 95% Fibre & Leaseline Total 33 Wired Wireless Fixed Wir
Slide 13: Company Overview
werwoREs Company Overview oo | GROUP
Slide 14: SITI Networks: A Pioneer in Indian Cable TV Distribution
SITI Networks: A Pioneer in Indian Cable TV Distribution 13.2 Mn 11.6 Mn 220, 000 580 1.62 Mn 240,000 Digital Cable Broadband Broadband Cable Universe HD Subscribers locations Presence Subscribers Homes Passed Subscribers Multi-System Operator (MSO) providing Digital/ Analog Cable TV and Broadband S
Slide 15: SITI Networks: Present across the country
SITI Networks: Present across the country 15
Slide 16: On a progressive growth path
On a progressive growth path 1994 Cable business started by promoters 2006 Wire and Wireless (India) Ltd. Incorporated 2007 Implemented CAS in metros of Delhi, Mumbai & Kolkata ; Listed on the stock exchanges 2008 Initiated mass Digitization through HITS Services 2009 Right Issued of INR45
Slide 17: Promoter Group - Corporate Structure
Promoter Group - Corporate Structure Launched in 1926, the Parent Group (“Essel Group”) completed 90 years recently; One of India's leading business houses, with a dominant vertically integrated presence in Media and entertainment Leading producer, aggregator and distributor of Indian programmin
Slide 18: An Experienced Management Team leads the Company
An Experienced Management Team leads the Company Mr. Sidharth Balakrishna, Executive Director Mr. Anil Jain: Head- Finance Mr. Sidharth Balakrishna has over 13 years of experience in the Mr. Anil Jain has been associated with Essel Group for more energy, infrastructure and education sectors. In the
Slide 19: The SITI Competitive Advantage
The SITI Competitive Advantage 1 2 3 4 5 Country-wide Superior Systems & Strategic Efficient Access Technology Processes Alliances Execution • India’s largest • Using latest • OYC Subscriber • VNO tie up with • Robust MSO MPEG4 STBs Management BSNL to provide corporate • Presence across • Broadband
Slide 20: Sizeable free float and institutional ownership
SITI Networks has a sizeable free float and institutional ownership Shareholding Pattern Key Investors 872 Mn Shares 1.4% 12.1% Foreign Institutions 4.9% 3.0% Acacia Partners 5.1% 73.6% Domestic Institutions Promoters Individuals Indian Companies Mutual Funds FIIs Others There has been fund infusion
Slide 21: Video and broadband technology infrastructure
Video and broadband technology infrastructure 15 Digital Headends; Intra-city OFC and Coax Network of ~32,500 Kms covering ~ 580 locations Transport of Digital CATV signals on 1.2 Gbps links across the country; 354 IP Points Hybrid (DOCSIS+ GPON) Technology to offer Cable Broadband services Di
Slide 22: Strategy
werwoREs Strategy SEE GROUP
Slide 23: Video Strategy
Video Strategy Increase Collection efficiency by further Migrate implementing Prepaid model in high to Prepaid ARPU areas Monetize significant Phase 4 base Revenue Increase HD Subscriber base Enhancement In process of streamlining AMS channels Improve extraction from low utilized IP Cost i
Slide 24: Broadband Strategy
Broadband Strategy High Data consumption FTTx Contain Churn Simplified Plans Design and offer Adoption of FTTx Next-Gen SITI with focus on new plans with technology product on Neighbourhood long term higher speeds @1Gbps speed to digital WiFi to contracts. Plans and higher data improve convergence c
Slide 25: SITI well positioned to benefit from implementation of Tariff Order
SITI well positioned to benefit from implementation of Tariff Order Implementation of the network distribution model will shift the balance of power in favour of Distribution • Subscribers pay Phase neutral Minimum Rental of INR130 for 100 FTA SD channels; Can take additional FTA channels in bundles
Slide 26: Financials & Operating Metrics
Financials & Operating Metrics 26
Slide 27: Cable: Consistent improvement
Cable: Consistent improvement A PAN India Presence Digital Subs (Mn) 580 580 11.6 10.0 9.2 8.3 8.7 312 130 60 80 FY13 FY14 FY15 FY16 FY17 Q1FY18 AMJ'16 JAS'16 OND'16 JFM'17 AMJ'17 Subscription Income (INR Mn) ARPUs (INR) 1,700 1,600 1,475 25 28 1,352 15 1,263 10 50 50 26 40 78 78 82 82 103 103 105 1
Slide 28: Broadband: Steady Growth
Broadband: Steady Growth Broadband Subscribers (000’s) Broadband Home Passess (Mn) Broadband Income (INR Mn) 228 240 213 1.57 1.61 1.62 259 266 258 195 1.46 249 167 1.19 195 AMJ'16 JAS'16 OND'16 JFM'17 AMJ'17 AMJ'16 JAS'16 OND'16 JFM'17 AMJ'17 AMJ'16 JAS'16 OND'16 JFM'17 AMJ'17 DOCSIS ARPU improving
Slide 29: Broadband: Q1FY18
Broadband: Q1FY18 Uptake of Lock-in Plans* 30.2% • Increased share of customers on lock- 30% in plans to reduce churn. As of end- 25% June, 30% of new acquisitions were on lock-in plans as of June 2017 20% 15% • Price Laddering accrues significant 10% 10% increase in New Acquisition ARPU 5.0% 5.60%
Slide 30: Improving Operational Performance sequentially (Consolidated)
Improving Operational Performance sequentially (Consolidated) EBITDA (INR Mn) EBITDA - Net of STB Activation (INR Mn) 1,072 223 210 153 694 621 108 114 474 497 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Profit Before tax (INR Mn) 16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 -311
Slide 31: FY Revenue Trends
FY Revenue Trends Video Subscription (INR Mn) Broadband (INR Mn) 5690 970 4102 3536 2802 486 265 175 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Carriage (INR Mn) FY17 Revenue Split (INR Mn) 3001 679, 6% 2490 2568 2271 Subscription 1701, 14% 5690, 47% Broadband Carriage 3001, 25% Activation Others 970,
Slide 32: Consolidated Audited Balance Sheet
Consolidated Audited Balance Sheet (INR Lakhs) 2017 2016 A. Assets 1. Non-current assets (a) Property, plant and equipment 1,40,433.0 1,10,128.9 (b) Capital work-in-progress 41,109.4 51,131.3 (c) Goodwill 5,825.8 6,246.8 (d) Other intangible assets 24,880.1 22,488.0 (e) Intangible assets under devel
Slide 33: Management commentary from Executive Director
“SITI continues to hold a strong position in the market with record customer additions. We are well positioned to monetize this base from Q2 onwards and maintain a strong growth trajectory In Broadband, we will selectively expand our offerings and drive increased customer focus. We are also making s
Slide 34: Thank You
werwoREs Thank You GROUP