Pay TV Market Share

PT MNC Sky Vision Tbk.
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 Indonesia’s pay TV market is estimated to reach 8.7 million subscribers by 2020, equaling to only 21% of TV households
 Almost 3x the size of 2012
In thousand subscribers
10,000
Subs
%Pen/TVHH
9,000
18%
19%
20%
21%
19%
16%
8,000
16%
14%
7,000
12%
6,000
13%
9%
8,691
7%
5,000
8,221
5%
4,000
3,000
22%
1%
1%
1%
2%
2%
3%
7%
7,687
3%
4%
7,065
6,340
1%
5,471
2,000
-2%
4,376
1,000
265
317
465
650
749
873
2004
2005
2006
2007
2008
2009
-
1,132
1,676
10%
2,442
3,118
-5%
-8%
2010
2011
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
2020E
Source: Media Partners Asia
4
Population (2012)
A Young Population : 80% - Below 50yr
3%
Millions
1,361
What are the macro drivers?
 A large & young population
13%
29%
1,223
 200mn people below age of 50
 A rising middle class
244
95
69
 Strong economic growth driven
29%
29
23
5
by domestic consumption
26%
0-14
Source: MPA 2013
30-49
50-69
Source: Indonesia Bureau of Statistics 2012
Completed Education Level
NA
22%
15-29
Monthly Household Expenditure (Rp1,000)
University 4% Academy
3%
Senior High
29%
E <600
5%
D 601900
13%
A1 3500
6% A2 25013500
9%
 Only 4% of population has
university degrees
 Indonesians prefer to watch TV
than to read, watching 5 hours
of TV per day.
C1 12511750
26%
Junior High
19%
Source: Indonesia Bureau of Statistics 2012
 40mn TV household
B 17512500
20%
C2 9011250
21%
Elementary
23%
70+
Source: Nielsen Media Research
5
Asia Pacific’s Pay TV subscribers (2013)
Asia Pacific’s Average Pay TV Monthly ARPU (2012)
In USD
In thousand subs
120
104
100
1,194
IPTV
Cable
80
Satellite
62
880
60
131
50
5,149
43
5,989
122
3,330
785
3,265
1,571
29
610
40
5
305
1,385
2,808
1,089
44
894
1,523
477
20
33
827
398
536
18
15
14
12
8
6
0
Source: Media Partners Asia 2013
6
Indonesia has the lowest pay TV penetration rate of TV household in the Asia Pacific (2013)
120%
100%
100%
86%
80%
80%
66%
60%
51%
49%
40%
28%
20%
11%
9%
Philippines
Indonesia
0%
Korea
Hongkong
India
Singapore
Malaysia
China
Thailand
Indonesia has the highest projected pay TV subscriber growth in the Asia Pacific (CAGR 2012-2016E)
30%
28%
24%
25%
20%
20%
20%
18%
18%
13%
15%
10%
6%
3%
5%
1%
0%
Indonesia
Thailand
China
India
China
PHP
Korea
Malaysia
Singapore
HK
Source: Media Partners Asia
7
Company Milestones
Total subscribers (in thousands)
Total subscribers in Mar 2014 = 2.4 million
2500
2,300
2000
July 2012:
IPO @ Rp 1,520/shr
2011:
MPEG-4 rollout
1,720
1500
1,163
1000
2009:
Launch of Indostar II satellite; migrated
subscribers to Galaxy and Venus packages
2008:
Introduced Top TV to target low/middle class
Opened sales and services offices in 43
cities
805
604
500
2006:
Name change to MNC Skyvision
479
306
9
28
30
56 109
192
2001:
Bhakti Investama acquired 51% of Indovision
and became major owner. Less than 30k
subscribers
0
9
Brands
Strategy

Launched in 1994

Middle & upper-middle class

Cities & urban areas

38% market share (#1 in Indonesia)

Approx. 117 int’l and local channels
1. Continue to acquire new subscribers and retain existing
subscribers
2. Create differentiation through new channels, attractive &
value-for-money packages and value-added services
3. Conduct aggressive marketing activities to educate the
market on the pay TV proposition and enhance our brands

Launched in 2008

Middle & lower middle class

Rural areas & FTA blank spots

25% market share (#2 in Indonesia)

Approx. 49 int’l and local channels
5. Increase up-selling programs to increase ARPU

Launched in 2008
6. Actively participate in anti-piracy programs

Middle & lower middle class,
4. Expand in-house distribution channels and explore new
channels
skewed to movies & entertainment
lovers

11% market share (#4 in Indonesia)

Approx. 72 int’l and local channels
10
1
Favorable macroeconomic and industry outlook in Indonesia
2
#1 Pay TV operator, with top-of-mind brand awareness and compelling content portfolio
3
Dominant market share and ability to leverage on economies of scale
4
Reliable nationwide coverage via S-band satellite-based technology
5
Large, diversified and in-house distribution network
6
Strong management with solid execution track record and prudent financial policies
11
Private consumption is a
key growth driver…
… and continues to increase
at a robust pace …
100%
… while Indonesia’s sovereign risk
have markedly improved
6.0%
150.0
75%
5.0%
100.0
50%
25%
'09
'10
Private
Capitalformation
NetExports
'11
'12
Government
Stocks
Note: Data represents % of GDP Expenditure
Source: ADB

1.
Baa3
BB+
Ba1
BB
Ba2
BB-
Ba3
B+
B1
B
B2
B-
B3
03
0%

4.0%
50.0
BBB-
0.0
04
05
06
07
08
09
10
11
3.0%
'09
'10
Source: ADB
'11
'12
Source: Bloomberg
One of Asia's largest and most rapidly growing middle class of over 93 million in 2009 1, doubling from 45 million in
1999, with strong growth momentum in private and household consumptions
Sovereign bond is rated as Investment Grade, highlighting a strong policy framework and positive outlook for the
economy
Source: ADB
12
Marketing & Brand Awards
Brand Awareness
Best Innovation in Marketing (2008, 2009, 2011,
2012)
84.1%
Best Experiential Marketing (2010, 2011, 2012)
63.4%
Top Brand (2008, 2009, 2010,2011, 2012, 2013)
61.4%
Indonesia Best Brand Award (2011, 2012,2013)
51.5%
Most Admired Companies (2010, 2011, 2012,
2013)
Net Promoter Customer Loyalty Award (2010,
2012)
Call Center Award (2010, 2012)
Digital Marketing Award In Social Media (2011,
2012)
37.1%
 Extensive market research and communications are
critical components of MNC Sky Vision’s strategy
 MNC Sky Vision is a recognized market leader for
innovative marketing and branding
Customer Satisfaction Award (2012)
Original Brand Award (2012, 2013)
1.
Source: Brand Performance Survey 2013 (MARS)
Best New Issuer Award(2013, 2014)
13
Movies (12)
News (11)
GE & Variety (29)
Oriental (3)
HD (5)
Kids (8)
Sports (6)
Religion (2)
Toddlers (3)
Local FTA (12)
Documentary (9)
Lifestyle (13)
Music (5)
Exclusive channel
Total Channels: 118
Exclusive Channels: 31
MNC Exclusive: 19
14
NO.
CHANNEL
NO.
CHANNEL
1.
Cartoon Network
11.
MNC Infotainment
2.
Disney Jr.
12.
MNC Lifestyle
3.
Cinemax
13.
S-One
4.
MNC Sports 1
14.
AXN
5.
HBO Hits
15.
MNC Muslim
6.
Cbeebies
16.
Disney XD
7.
Disney Channel
17.
Fox Movies Premium
8.
MNC Shop
18.
MNC Entertainment
9.
MNC Sports 2
19.
YoYo TV
10.
MNC Kids
20.
MNC News
Source: AGB Nielsen Report
15
No.
Kids
No.
Movies
No.
International
1.
Cartoon Network
1.
Cinemax
1.
KBS
2.
Disney Jr.
2.
HBO Hits
2.
Arirang
3.
CBeebies
3.
Fox Movies Premium
3.
Australian Network
No.
Entertainment
No.
Sports
No.
Lifestyle
1.
S-ONE
1.
MNC Sports 1
1.
MNC Infotainment
2.
AXN
2.
MNC Sports 2
2.
MNC Lifestyle
3.
MNC Entertainment
3.
Star Sport
3.
MNC Food & Travel
No.
Documentary
No.
News
No.
Music
1.
NatGeo Wild
1.
MNC News
1.
MNC Music
2.
BBC Knowledge
2.
MNC Business
2.
Channel V
3.
National Geographic
3.
CNN International
3.
Trace
Source: AGB Nielsen Report
16
Dominant Position in Indonesia’s Pay TV Industry
Orange 3.2% Others 1%
NexMedia 2.6%
39.96% CAGR in Subscribers (2007 - Dec 2013)
MNC Sky Vision
has a
leading 74%
market share
Aora 2.3%
TelkomVision 8.3%
IDV
Top TV
Oke V
2,406
2,300
1,720
First Media
9.6%
1,163
MNC Sky Vision 73.8%
• Indovision 37.7%
• Top TV 24.8%
• Okevision 11.3%
804
480
306
Total Number of Indonesia Pay TV Subscribers as per
Dec 2013: 3.12 MN
Source




306
2007
26
604
76
335
204
516
631
752
454
2008
2009
2010
2011
377
774
804
1175
1225
2013
Mar-14
583
173
88
351
933
2012
Media Partners Asia (April 2014)
Largest subscriber base representing about 74% market share
Subscriber of 1,866,604 as of Mar 2013 and 2,406,023 as of Mar 2014
One of the lowest content costs; highest bargaining power on pricing, minimum guarantees & exclusivity
Subscriber base provides scale to increase ARPU and profitability going forward
17
Pay TV Market Share
End of 2012
Pay TV Market Share
End of 2013
NexMedia,
2.0%
Aora, 7.0%
TelkomVision,
9.0%
NexMedia, 2.6%
Others, 1.0%
Orange, 3.2%
Aora, 2.3%
Others , 0.2%
TelkomVision,
8.3%
First Media,
10.0%
First Media, 9.6%
MNC Sky
Vision, 71.0%
MNC Sky Vision,
73.8%
1.
2.
3.
Indovision : 38%
Okevision : 9%
TopTV
: 24%
1.
2.
3.
Indovision : 38%
Okevision : 11%
TopTV
: 25%
18
S-Band DTH Broadcasting Capability

Holds exclusive license for broadcasting using Sband spectrum

Clear reception and resilience to heavy
rainstorms that are common in Indonesia

C-band or Ku-band used by competitors more
susceptible to service outages

Complete coverage of Indonesia’s 13,700 islands,
over 9.8 million square kilometers

Higher EIRP1 enables smaller reception disk
compared to C-band

Best-in-class technology and exclusivity of Sband provides competitive advantage
DTH Transmission Process
1. Effective Isotropic Radiated Power
19
Why DTH Works in Indonesia
Pay TV Market Share
2011

DTH is the dominant pay TV platform with
81% market share

The only platform providing complete
coverage across Indonesia

Cable is hampered by infrastructure and
geographical challenges


3%
9%
13%
19%
7%
81%
84%
DTH
IPTV to grow, but infrastructure is
inadequate for wide-scale rollout
2015E
2013E
Cable TV
84%
IPTV
Source: MPA estimates
DTH Competitive Advantages
DTH
DTH market share is expected to grow
further by 84% until 2015
Cable
IPTV
Country-wide Coverage
Rural Coverage
HD Bandwidth
20
Network of 100 Branch Offices Across Indonesia
 Majority of new customers are sourced
through in-house channels,
 Greater control, lower commissions and
stringent customer verification
Branch office
Sulawesi
Kalimantan
Papua
Sumatera
Sumatra
Maluku
Java
 Competitors rely primarily on external
dealers for subscriber acquisition
About 80% of New Subscribers Are Acquired Through In-House Channels
D2D
Call Center
Sub-get-Sub
83%
Stores
Club
Dealers
Corners
17%
21




Largest pay TV operator in Indonesia in terms of subscriber base, with 74% market share1
Established in 1988; provides pay television services through Indovision ,Top TV brands and also Okevision
Nationwide coverage using Direct-to-Home (“DTH”) S-band satellite-based network
118 local and international channels and 31 exclusive channels
Operational and Financial Snapshot
1.
Subscribers
2,406,023 (As of March 2014)
Subscriber Growth
39.96% CAGR Dec 2007 to 31 Dec 2013
ARPU / Churn Rate
IDR 111,283 / 1.31% (March 2014)
Revenue
IDR 775 Bio (Mar 2014)
EBITDA
IDR 303 Bio (Mar 2014)
According to Media Partners Asia Limited (“MPA”)
23
Total revenue (Rp billions)
Mar 2013
Revenue
TV Advertising, 4.7%
3,020
Mar 2014
TV Advertising,
5.2%
Others, 0.1%
Others, 0.3%
2,394
1,412
1,738
Program
Retransmission
Services, 95.2%
775
2010
2011
2012
2013
Program
Retransmission
Services, 94.5%
Mar 2014
EBITDA (Rp billions) and EBITDA margin (%)
EBITDA
EBITDA Margin
1,214
41.9%
1,002
41.9%
40.0%
728
522
303
2010
2011
2012
2013
Mar 2014
39.0%
37.0%
2010
2011
2012
2013
Mar 2014
Source: Company information
24
Total debt / EBITDA1
Net debt2 / EBITDA1
2.74
2.96
2.35
2.31
2.13
2.19
2010
2011
2012
2013
2011
2012
2013
Mar 2014
Mar 2014
Debt / Total capitalization3
63%
1.89
1.19
1.54
2010
1.9
EBITDA1 / Interest
64%
62%
9.26
59%
41%
5.68
4.81
5.51
3.55
2010
2011
2012
2013
Mar 2014
2010
2011
2012
2013
Mar 2014
Source: Company information
1.
2.
3.
EBITDA = Operating profit + D&A
Net Debt = Gross Debt - Cash - Short Term Investments
Total capitalization = Debt + Total book equity
25
Mar 2013
Mar 2014
5%
0%
2%
3%
92%
5% 0%
DTH-Digital
DTH-Digital
Commercial Sales
Commercial Sales
TV Ad Sales
TV Ad Sales
Others
Others
93%
26
IDR Billions
Mar-13
Mar-14
% Change
Revenues
696
775
11%
Operating Expenses
573
708
24%
Adjusted EBITDA
294
303
3%
33
136
312%
Net Income

Revenue rose by 11% from Rp696 billion as of Mar 2013 to
become Rp775 billion as of Mar 2014, in line with the
increase of number of subscribers from 1.8 million subs in
Mar 2013 to 2.4 million subs in Mar 2014
IDR billions
+11%
775
696
+3%
312%
294
303
136
33
Pendapatan/Revenue
EBITDA
Laba Bersih/Net Income
27