Pay TV Market Share

PT MNC Sky Vision Tbk.
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 Indonesia’s pay TV market is estimated to reach almost 8 million subscribers by 2023, equaling to only 17% of TV
households
 2x the size of 2013
In thousand subscribers
9,000
Subs
%Pen/TV-HH
8,000
14%
7,000
11%
6,000
15%
16%
16%
17%
17%
17%
17%
17%
12%
12%
9%
7%
5,000
7%
5%
4,000
1%
2%
2%
3%
3%
3,000
4,708
2,000
5,308
5,831
6,313
6,718
7,023
7,272
7,483
7,667
2%
4,008
-3%
3,175
2,437
1,000
453
637
739
868
1,125
1,666
-
-8%
2006
2007
2008
2009
2010
2011
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
2020E
2021E
2022E
2023E
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 (2013)
In USD
In thousand subs
100
32
95
Satellite
Cable
800
80
IPTV
717
63
60
5,955
51
4,580
40
31
3,416
1,240
1,572
786
1,095
146
5,245
1,060
2,749
20
1,536
1,455
235
792
10
336
8
5
829
32
-
19
16
11
533
418
32
11
9
6
0
Source: Media Partners Asia 2014
6
Indonesia has the lowest pay TV penetration rate of TV household in the Asia Pacific (2013)
120%
100%
100%
89%
80%
80%
66%
53%
60%
52%
40%
27%
20%
13%
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 2013-2018E)
16%
15%
14%
12%
9%
10%
8%
5%
6%
5%
4%
4%
4%
3%
2%
1%
1%
Hongkong
Singapore
0%
Indonesia
Philippines
Malaysia
China
Korea
India
Thailand
Source: Media Partners Asia
7
Company Milestones
Total subscribers (in thousands)
Total subscribers in Sep 2014 = 2.53 million
3000
2,528
2500
July 2012:
IPO @ Rp 1,520/shr
2011:
MPEG-4 rollout
2,300
2000
2009:
Launch of Indostar II satellite; migrated
subscribers to Galaxy and Venus packages
1,720
1500
1,163
1000
805
604
500
2006:
Name change to MNC Skyvision
479
9
0
2008:
Introduced Top TV to target low/middle class
Opened sales and services offices in 43
cities
28
30
56 109
192
306
2001:
Bhakti Investama acquired 51% of Indovision
and became major owner. Less than 30k
subscribers
9
Brands
Strategy

Launched in 1994

Middle & upper-middle class

Cities & urban areas

38% market share (#1 in Indonesia)

Approx. 121 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

12% market share (#3 in Indonesia)

Approx. 72 int’l and local channels
10
Private consumption is a
key growth driver…
100%
… and continues to increase
at a robust pace …
125
125
121
118
119
5.50%
117
50%
115
113
112
BBB-
7
BB+
6
BB
5
BB-
4
B+
3
B
2
B-
1
Baa3
7
6Ba1
5Ba2
4Ba3
3B1
5.00%
111
25%
8
8
6.00%
123
75%
… while Indonesia’s sovereign risk
have markedly improved
2B2
109
0%
'11
'12
'13
105
4.50%
'11
'12
'13
1B3
0
3
-0
May
Jun-03
Jul- 03
3
g- 0
Au
p-03
Se
Oct -03
3
-0
Nov
c -03
De
Jan-04
b-04
Fe
4
Mar- 0
r -04
Ap
4
-0
May
Jun-04
Jul- 04
4
g- 0
Au
p-04
Se
Oct -04
4
-0
Nov
c -04
De
Jan-05
b-05
Fe
5
Mar- 0
r -05
Ap
5
-0
May
Jun-05
Jul- 05
5
g- 0
Au
p-05
Se
Oct -05
5
-0
Nov
c -05
De
Jan-06
b-06
Fe
6
Mar- 0
r -06
Ap
6
-0
May
Jun-06
Jul- 06
6
g- 0
Au
p-06
Se
Oct -06
6
-0
Nov
c -06
De
Jan-07
b-07
Fe
7
Mar- 0
r -07
Ap
7
-0
May
Jun-07
Jul- 07
7
g- 0
Au
p-07
Se
Oct -07
7
-0
Nov
c -07
De
Jan-08
b-08
Fe
8
Mar- 0
r -08
Ap
8
-0
May
Jun-08
Jul- 08
8
g- 0
Au
p-08
Se
Oct -08
8
-0
Nov
c -08
De
Jan-09
b-09
Fe
9
Mar- 0
r -09
Ap
9
-0
May
Jun-09
Jul- 09
9
g- 0
Au
p-09
Se
Oct -09
9
-0
Nov
c -09
De
Jan-10
b-10
Fe
0
Mar- 1
r -10
Ap
0
-1
May
Jun-10
Jul- 10
0
g- 1
Au
p-10
Se
Oct -10
0
-1
Nov
c -10
De
Jan-11
b-11
Fe
Mar- 1
r -11
Ap
-1
May
Jun-11
Jul- 11
g- 1
Au
p-11
Se
Oct -11
-1
Nov
c -11
De
107
03
04
05
S&P
Note: Data represents % of GDP Expenditure
Source: Badan Pusat Statistik


1.
*Data in USD billion dollars over constant price
Source: Badan Pusat Statistik
06
07
Fitch
08
09
10
0
11
Moody's
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
11
Brand Awareness
100%

77%
74%
70%

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
1.
Source: Prompt Research 2014
69%
47%
Marketing & Brand Awards
Best Innovation in Marketing (2008, 2009, 2011, 2012)
Best Experiential Marketing (2010, 2011, 2012)
Top Brand (2008, 2009, 2010,2011, 2012, 2013, 2014)
Indonesia Best Brand Award (2011, 2012,2013)
Most Admired Companies (2010, 2011, 2012, 2013,
2014)
Net Promoter Customer Loyalty Award (2010, 2012)
Digital Marketing Award In Social Media (2011, 2012)
Call Center Award (2010, 2012)
Customer Satisfaction Award (2012)
Original Brand Award (2012, 2013, 2014)
Best New Issuer Award(2013, 2014)
Service Quality Awards (2014)
Solo and Jogja Best Brand Index (2014)
Satria Brand Award (2014)
12
Movies (13)
News (11)
GE & Variety (30)
Oriental (3)
HD (5)
Kids (9)
Sports (6)
Religion (2)
Toddlers (3)
Local FTA (12)
Documentary (9)
Lifestyle (14)
Music (5)
Exclusive channel
Total Channels: 122
Exclusive Channels: 34
MNC Exclusive: 20
13
NO.
CHANNEL
NO.
CHANNEL
1.
Cartoon Network
11.
MNC Infotainment
2.
Disney Jr.
12.
Celestial
3.
Disney Channel
13.
MNC Entertainment
4.
S-One
14.
Vision 3 Baby
5.
MNC Shop
15.
CBeebies
6.
MNC Sports 1
16.
MNC News
7.
Fox Movies Premium
17.
NGC Wild
8.
AXN
18.
MNC Drama
9.
MNC Sports 2
19.
Cinemax
10.
MNC Kids
20.
History
Source: AGB Nielsen Report
14
No.
Kids
No.
Movies
No.
International
1.
Cartoon Network
1.
Fox Movies Premium
1.
KBS
2.
Disney Jr.
2.
Celestial
2.
Arirang
3.
Disney Channel
3.
Cinemax
3.
DW-TV A+
No.
Entertainment
No.
Sports
No.
Lifestyle
1.
S-ONE
1.
MNC Sports 1
1.
MNC Infotainment
2.
AXN
2.
MNC Sports 2
2.
MNC Food & Travel
3.
MNC Entertainment
3.
Fox Sports 2
3.
MNC Lifestyle
No.
Documentary
No.
News
No.
Music
1.
NatGeo Wild
1.
MNC News
1.
Channel V
2.
History
2.
MNC Business
2.
MNC Music
3.
BBC Knowledge
3.
CNN International
3.
Trace
Source: AGB Nielsen Report
15
Dominant Position in Indonesia’s Pay TV Industry
39.96% CAGR in Subscribers (2007 - Dec 2013)
IDV
MNC Sky Vision 74.6%
Top TV
2,528
Oke V
2,300
Others 15,6%
402
First Media
9.8%
MNC Sky Vision
is the market
leader of Pay-TV
in Indonesia
1,163
804
480
306
Total Number of Indonesia Pay TV Subscribers as per
Jun 2014: 3.35 MN
Source




26
604
76
335
1,720
351
204
774
583
173
88
516
752
454
631
306
2007
2008
2009
2010
2011
838
933
2012
1175
1288
2013
Sep-14
Media Partners Asia (July 2014)
Largest subscriber base representing about 75% market share
Subscriber of 2,528,346 as of Sep 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
16
Pay TV Market Share
As of June 2014
Others,
15.6%
First
Media,
9.8%
Pay TV Market Share
End of 2013
MSKY,
74.6%
Others ,
16.6%
Pay TV Market Share
End of 2012
First
Media,
9.6%
Others ,
19.0%
MSKY,
73.8%
First
Media,
10.0%
MSKY,
71.0%
17
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
18
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


19%
81%
DTH
IPTV to grow, but infrastructure is
inadequate for wide-scale rollout
2018E
2013
Cable TV
DTT
IPTV
Source: MPA estimates
DTH Competitive Advantages
DTH
DTH market share is expected to grow
further by 84% until 2015
Cable
DTT
IPTV
Country-wide Coverage
Rural Coverage
HD Bandwidth
19
Network of 100 Branch Offices Across Indonesia
 16 new branches added in early 2014
Branch office
Sulawesi
 Majority of new customers are sourced
through in-house channels,
 Greater control, lower commissions and
stringent customer verification
Kalimantan
Papua
Sumatera
Sumatra
Maluku
Java
 Competitors rely primarily on external
dealers for subscriber acquisition
82% of New Subscribers Are Acquired Through In-House Channels
D2D
Call Center
Sub-get-Sub
82%
Stores
Club
Dealers
Corners
18%
20




Largest pay TV operator in Indonesia in terms of subscriber base, with 75% 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
122 local and international channels and 34 exclusive channels
Operational and Financial Snapshot
1.
Subscribers
2,528,346 (As of Sep 2014)
Subscriber Growth
39.96% CAGR Dec 2007 to 31 Dec 2013
ARPU / Churn Rate
IDR 101,314 / 1.26% (9M 2014)
Revenue
IDR 2,436 Bn (Sep 2014)
EBITDA
IDR 919 Bn (Sep 2014)
According to Media Partners Asia Limited (“MPA”)
22
Total revenue (Rp billions)
Sep 2013
Revenue
Sep 2014
3,020
2,394
1,412
2010
2,436
1,738
2011
2012
2013
Sep 2014
EBITDA (Rp billions) and EBITDA margin (%)
EBITDA
EBITDA Margin
1,214
1,002
41.9%
41.9%
919
40.0%
728
522
2010
38.0%
37.0%
2011
2012
2013
Sep 2014
2010
2011
2012
2013
Sep 2014
Source: Company information
23
Total debt / EBITDA1
Net debt2 / EBITDA1
2.74
2.96
2.35
2.31
2.13
2.37
1.54
2010
2011
2012
2.14
1.19
2013
Sep 2014
Debt / Total capitalization3
63%
1.9
2010
2011
2012
2013
Sep 2014
EBITDA1 / Interest
64%
62%
63%
41%
9.01
5.68
4.81
5.51
3.55
2010
2011
2012
2013
Sep 2014
2010
2011
2012
2013
Sep 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
24
Sep 2013
Sep 2014
COMMERCIAL
3%
TV AD
4%
JOINING FEE &
SALES DSD
1%
DTH
92%
TV AD
COMMERCIAL 5%
3%
JOINING FEE &
SALES DSD
0%
DTH
92%
25
IDR Billions
Sep-13
Sep-14
% Change
Revenues
2,230
2,436
9%
Operating Expenses
1,865
2,256
21%
919
919
0%
(223)
(28)
87%
Adjusted EBITDA
Net Income

Revenue rose by 9% from Rp2,230 billion as of Sep 2013 to
become Rp2,436 billion as of Sep 2014, in line with the
increase of number of subscribers from 2.1 million subs in
Sep 2013 to 2.5 million subs in Sep 2014
IDR billions
+9%
2,436
2,230
919
919
87%
(223)
Pendapatan/Revenue
EBITDA
(28)
Laba Bersih/Net Income
26