Siti Networks Limited · NSE:SITINET
Siti Networks — Q4 FY2017 Earnings Presentation
30 slides from Siti Networks's earnings presentation, June 2017
Slide 1: SITI Networks Limited Q4FY17 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 Q4FY17 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 15 3 Strategy 21 4 Financials & Operating Metrics 25 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- Wired technology gives Signal Quality linking leads to 10-15% better signal signal loss Resistance to being affected by adverse weather Low High Two Way communication No Yes Broad
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: Drivers of Internet Consumption are getting in place
Drivers of Internet Consumption are getting in place…. 1 2 3 Dropping Smartphone Prices and Rapidly growing E-commerce An ‘always online’ Youth, strongly increasing screen sizes, driving Adoption, fuelled by a flurry of connected on Social Media Upgrades to Smartphones world-class start-ups India 4G
Slide 11: 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 12: Majority of Internet Consumption in India happens within Home
Studies indicate majority of Internet Consumption, including Mobile, in India is happening within Home Locations of accessing Internet in India Fixed Broadband is best suited to leverage this Opportunity ! Cyber Café 6% School/College 12% Internet Traffic Dispersion by Access Medium, 2015 On the Go
Slide 13: What does the Customer Need?
With exploding Internet Consumption ,coupled with Video Usage, what does the Customer Need ? Customer Needs 1 High Speed of Access Only Wireline 6x of average mobile broadband speeds Broadband / WiFi can provide 2 Low Cost per GB ($/GB) Hi-speed WiFi Access for Laptops , Tablets , 1/5th of mobile br
Slide 14: 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 per 100 population 5% 2.0% 6.9% DSL Rural 13 14.2% Dial Up Ethernet/ LAN 14.9% 62.0% Cable Modem Urban 69 95% Fibre & Leaseline Total 31 Wired Wireless Fixed Wir
Slide 15: Company Overview
werwoREs Company Overview oo | GROUP
Slide 16: SITI Networks: A Pioneer in Indian Cable TV Distribution
SITI Networks: A Pioneer in Indian Cable TV Distribution 13.2 Mn 10.0Mn 160, 000 580 1.61 Mn 228,000 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 Se
Slide 17: On a progressive growth path
On a progressive growth path 1992 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 18: Promoter Group - Corporate Structure
Promoter Group - Corporate Structure Launched in 1976, the Parent Group (“Essel Group”) is one of India’s leading business houses, with a dominant presence in Media India's leading vertically integrated media and entertainment group Leading producer, aggregator and distributor of Indian progra
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 • SITI- DITTO; In- • Robust MSO MPEG4 STBs Management House OTT corporate • Presence across • Broadband Syste
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 1.3% 12.3% Foreign Institutions 5.5% 2.4% Acacia Partners 4.9% 73.6% Domestic Institutions Promoters Individuals Indian Companies Mutual Funds There has been fund infusion of INR6800
Slide 21: Strategy
werwoREs Strategy SEE GROUP
Slide 22: Video Strategy
Video Strategy Increasing Monetization Business Expansion Increasing ARPU Margin Expansion Best Customer Experience 22
Slide 23: Subscription: SITI well positioned to benefit from 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 Content FTA SD channels; Can take additional FTA channels in
Slide 24: Broadband Strategy: Enablers
Broadband Strategy: Enablers High Speed Broadband Network Unified Device (Modem + Wifi Router + OTT + IoT) Optimized Network layout , Unlimited Plans , Attractive Price Convert any TV to Smart TV, with non-linear Content overlay City Wide Wi-Fi Unified Mobile App 24 Un-fix the Broadband….carry it ac
Slide 25: Financials & Operating Metrics
Financials & Operating Metrics 25
Slide 26: Cable: Consistent improvement
Cable: Consistent improvement A PAN India Presence Digital Subs (Mn) 10.0 9.2 580 8.3 8.7 7.9 312 130 57 60 80 FY12 FY13 FY14 FY15 FY16 FY17 JFM'16 AMJ'16 JAS'16 OND'16 JFM'17 Subscription Income (INR Mn) ARPUs (INR) 1,600 1,475 50 1,352 26 40 1,263 23 1,109 76 78 78 82 103 103 103 105 JFM'16 AMJ'16
Slide 27: Broadband: Growing Strongly
Broadband: Growing Strongly Broadband Subscribers (000’s) Broadband Home Passess (Mn) 1.57 1.61 228 213 1.46 195 1.19 167 133 0.89 JFM'16 AMJ'16 JAS'16 OND'16 JFM'17 JFM'16 AMJ'16 JAS'16 OND'16 JFM'17 Broadband Income (INR Mn) ARPU (INR) 610 259 266 604 249 195 592 590 159 581 JFM'16 AMJ'16 JAS'16 O
Slide 28: FY Trends
FY 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% Broadband 5690, 47% Carriage 3001, 25% Activation Others 970, 8% FY14
Slide 29: 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 30: Thank You
werwoREs Thank You GROUP