Download - Dth business in pakistan
Table of Contents
1. About Islamabad Consulting 2. The Global DTH Market 3. The Landscape in Pakistan 4. Lessons from the Indian DTH Experience 5. Indian DTH Marketing practices 6. The Pakistan Opportunity 7. Analysis of the Market 8. GTM strategy outline 9. Product Packaging 10. Potential Revenues 11. Business Model 12. Sales Management 13. Keys to Success 14. The First 90 days
Zulfiqar Qazilbash www.isbconsult.com
About Islamabad Consulting
Small boutique consultancy firm focusing on: • Market research and go
to market strategy • M&A and new markets
advisory • Project feasibility • Program management • Training and certifications For more information www.isbconsult.com
Zulfiqar Qazilbash
The Global Pay TV Market
Market size of DTH • Approaching $100B • Approaching 250M subs Competition • Cable TV • IPTV • OTVV Key trends • US and Europe market is
now mature • Growth coming from
emerging markets • Latin America • APAC • MEA
• Most growth driven by device connectivity and Telco service bundles
GLOBAL Average TV viewing = 4-5 hours/day
Pay TV Subscription Revenue = $250B
TV Hardware = $125B
TV Gaming Revenue = $30B
Subscription revenue just one component of overall revenue!
TV Advertisement = $200B
Nearing 1 Billion Pay TV Subs
Other Revenue
Zulfiqar Qazilbash www.isbconsult.com
The Landscape in Pakistan
CABLE TV: • Limited licensed coverage @Rs 450/month
• 25,000 FTTH by Nayatel. With HD • 50,000 HFC by Worldcall and Wateen. No HD.
• DWN provides wireless cable service in large urban. No HD.
• Remaining are unlicensed (as low as Rs 100/month in rural areas). No HD (480p).
• Analog to digital conversion in process (2016-17)
IPTV: • PTCL provides smart TV @Rs. 450/month. No HD.
INDIAN DTH: • Expensive and illegal option @Rs 600 – 1500/month
Subscription Service Volume*
Avg. Sub/month
Active Months
Year Revenue *
Cable TV 12 250 9 27,000
Indian DTH 3 750 9 20,250
TOTAL* 47,250
* In PKR Millions
DTH is positioned to enhance TV experience
for majority of urban and rural population
• Rs 45 Billion annual TV Ad market • Nascent but fast growing e-commerce and e-
services market driven by smart phone penetration
Zulfiqar Qazilbash www.isbconsult.com
Lessons from the Indian DTH Experience
Key Learning • South Asian market values price above all – growth is limited
by affordability of target population • Customer acquisition cost keeps operations in red during
growth phase • Ability to raise debt becomes a key driver of growth • Churn is lower compared to Telcos (less than 2%/mo.)
Missed Opportunities • VAR revenue is small and operators still searching for the
Killer App • Operators focused late on developing an advertisement
market
250
125 80
55
Households TV Homes DTH Subs Active Subs
Millions of HouseHolds ARPU 150 INR
Major Costs % of Revenue
Operations <50%
Programming Cost
<45%
Sales & Marketing
<15% (Ad spend 5%)
Taxation 30%
All operators took 7 or more years to break even: • 30% EBITA • 10% PAT
Typical customer stays with
operator 8-10 years
Operators took 12-20 months to first 1M subs Breakeven occurred at around 6M subs
Zulfiqar Qazilbash www.isbconsult.com
Indian DTH Marketing Practices
Operator Brand Association
Dish TV First mover
Sun TV Cost effectiveness
TATA Sky Customer service
Video Con Technology
Airtel Digital clarity
Reliance Big TV
VAS
Survey of India consumer priorities: 1. Price 2. Program choices 3. Reception 4. Tech support 5. Customer service 6. Technology
360 Marketing
Bollywood Actors as
Brand Ambassadors
Mobile DTH fitted vans
for rural areas
TV Set & Telecom
Dealership Alliances
Zulfiqar Qazilbash www.isbconsult.com
The Pakistan Opportunity
Move the role of TV from that of simple entertainment to a major enabling appliance for all major household aspirations and needs
A properly designed
interactive TV can function
as a semi literate
person’s PC
VAS drivers Urban Semi Urban Rural
Aspirations Wants to follow global trends
Wants the urban experience
Enhance quality of life
Package • Latest Technology
• Latest OTT apps
• Edutainment content Urban theme
• Window into the world
• Eliminate travel costs
Brand Personality
New and Trendy
Fashionable and Cosmopolitan
Friendly and Easy to Use
Content Type Example
Fresh global content
Refreshed urban context and themes
Services & Education
Organized content can eliminate the clutter, confusion and frustration associated with unguided internet browsing for less sophisticated users
Zulfiqar Qazilbash www.isbconsult.com
Analysis of the Market
Bargaining power of Suppliers
Bargaining power of Customers
Threat of Substitutes
Threat of new entrants
Competitive Rivalry
• Potential shortage of satellite transponders • High cost of content till sales volumes pick up • Many options for STBs including local manufacture
• Customers are very price sensitive • First mover generally will have some advantage
• Cable TV is inferior • GPON triple play is more expensive • PTCL IPTV is not as yet well regarded • Online TV and Video has yet to take hold in Pakistan
• Capital Intensive business will limit new entrants • However at this early stage, cant be ruled out • Later first mover advantage and loyalty programs can deter
• 3 licenses will have similar offerings due to license conditions • Rivalry in choice urban areas may lead to price war
Zulfiqar Qazilbash www.isbconsult.com
GTM Strategy
Illegal Indian DTH
connections
inferior Cable connections
Free TV and no TV
connections
Accelerate growth by first targeting lower hanging fruit
Create product bundles after detailed market
segmentation and profiling
Build the largest distributor dealer network
Premium Rs 1000-1500
Value Rs 500-Rs 999
Budget Rs 100-Rs 499
• Kids • Students • Professional • Housewife • Retired
• Wholesale/Franchise • Corporate • Consumer • Multi dwelling • Carriage
Urban Semi Urban Rural
• Entertainment • News • Sports • Education • Health • Fashion • Lifestyle
Zulfiqar Qazilbash www.isbconsult.com
Product Packaging
Self Actualization
Esteem/Respect
Love and Belonging
Safety/Security Needs
Physiological Needs Marriage Agriculture Healthcare
Police Education
Legal E-Gov
Chic Flics Disneyland
Religion
Fashion News
Associations
Lifestyle Skill development
Trade
Maslow’s Pyramid of Needs
Premium
Value
Budget
Urban
Semi Urban
Rural
Proper design of the 5 thematic channels and VAS services will become a Competitive differentiator as well as aid in developing the new DTH Adv market
Zulfiqar Qazilbash www.isbconsult.com
Potential Revenues
Year in Operation 1 2 3 4 5 6 7
Cable TAM (millions) 12.0 12.6 13.2 13.9 14.6 15.3 16.1
Growth 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
DTH Penetration 1.0 5.0 7.0 8.5 10.0 11.5 13.0
Growth 400% 40% 21% 18% 15% 13%
DTH Market share 8.3% 39.7% 52.9% 61.2% 68.6% 75.1% 80.8%
Company Share 50% 50% 50% 50% 50% 50% 50%
Subs 0.5 2.5 3.5 4.25 5 5.75 6.5
Growth 400% 40% 21% 18% 15% 13%
ARPU 450 405 365 328 295 266 239
Decline 10% 10% 10% 10% 10% 10%
Sub Revenue 2,700 12,150 15,309 16,731 17,715 18,335 18,654
VAR Contribution 1% 5% 10% 15% 18% 22% 25%
VAR Revenue 27 608 1531 2510 3189 4034 4663
Growth 2150% 152% 64% 27% 27% 16%
Ad Contribution 1% 5% 8% 11% 13% 15%
Ad Revenue 122 765 1338 1949 2384 2798
Growth 530% 75% 46% 22% 17%
Total Revenue 2,727 12,879 17,605 20,579 22,852 24,752 26,115
Growth 372% 37% 17% 11% 8% 6%
in USD 26.0 122.7 167.7 196.0 217.6 235.7 248.7
Zulfiqar Qazilbash www.isbconsult.com
The Business Model
Customer Acquisition
Installation
Recharge
After Sales Support
DTH Licensee
Distributor
Dealer Customer
Call Center
BUILD A COMPETIITIVE ADVANTAGE OR ELSE OUTSOURCE
Zulfiqar Qazilbash www.isbconsult.com
Sales Management
Zonal Regional Area National
National Sales Head
Zonal Director
North
Zonal Director Central
Zonal Director
South
Sales Executive
Regional Sales
Manager Service
Executive
FOS
Mgmt Trainees
Billing system
CRM
Dash boards
Regional Service
Manager
Zulfiqar Qazilbash www.isbconsult.com
Keys to Success
Critical Indicator Need to have Prefer to build
Subscriptions Revenue Growth
VAS Revenue Growth
Advertisement Revenue Growth
1. Build out distributor partnerships and dealer network
2. Raise debt to acquire new customers
3. Optimize operations 4. Build content partnerships
and service bundling Business Complexity
Technology
Regulatory Framework
Customer Service
Content and bundling
Partnerships
Product Packaging
Dealer Distributor Network
Market Research
and Segmentation
Business Analytics
And Dashboards
Zulfiqar Qazilbash www.isbconsult.com
The First 90 days
1. Get debriefing from
stakeholders
Understand what the stake holders want to achieve with the
business
2. Assess institutional
capacity
Benchmark process against selected international references
3. Develop 5 year strategic
plan
Get vision and fund allocations approved by the board
4. Create business plan
Annual Programs,
targets, budget
Provide monthly
milestones
HR development
plan
Define expected ROI
for each program
5. Create Operational
plans
Workflows and process SOP
Monitoring and evaluation
Design KPIs and simplified dashboards)
Schedule staff trainings
Tender for consultancies
Zulfiqar Qazilbash
Q&A?
www.isbconsult.com
Zulfiqar Qazilbash www.isbconsult.com