Caribbean Broadcast Market

T&T Pay TV Market Today Currently 182k Pay TV HHs as at end of Q3 Growth of less than 3% over last 2 years Represents just over 50% penetration Expansion to 60% of 350k HHs by 2016 is realistic Increase in actual HHs from 185k in 2011 to 210k Equates to only 25k growth in new Pay TV HHs in next 4 years

T&T Pay TV Market 2020 With PAY TV penetration increase to 70% in 2020 Maxed out at 245k Pay TV HHs Four relatively strong should still exist in Trinidad, and 2 in Tobago More than a typical U.S. city Interestingly all use different Technology Is there room for an additional Pay TV player?

Broadcast Market 9 Licensees competing for $120 million TT in Advertising Revenue in 2012 FTA advertising pie unlikely to increase significantly in light of continued audience fragmentation Number of National players to shrink to 6 or less by 2016 Other stations to become niche markets, e.g. Synergy, Gayelle, WI Sports No new traditional broadcaster interest Opportunity for content providers to emerge

Switchover Target Market Based on earlier assumptions, 140k HHs will require STBs in 2016 Broadcasters will be left with transmission infrastructure which may not be fully amortized Who pays? How will burden be shared? Will broadcasters invest in HD technology? What is the cost of establishing new signal distributor?

Case for a Broadcast Cooperative for Signal Distribution Surviving licensees will be able to fit on one signal distribution system Establishing a Cooperative ensures maximum efficiency for existing broadcasters with no mark-up Broadcasters able to engage in better long term planning Consumers will find traditional broadcasters in same place Incremental DTT spectrum can be used for niche providers and potential new content providers

Determination of Future Spectrum Use Once transition is completed and market is stabilized, regulator can look at use of additional DTT spectrum in 2016 By then more realistic picture of Pay TV and Broadcast Markets would have emerged An offer of spectrum at that stage will give potential bidders a much better opportunity to determine the feasibility of the market Other Mobile and Broadband applications will be an option

Caribbean Markets Primarily a Government decision in markets with dominant Government owned TV stations St.Kitts and Grenada examples Start by assuming transition of existing Government owned TV station Use capacity to attract new providers or ancillary services Get consumer to pay so that it is self financing (e.g. Barbados STV) Will depend on extent of Pay TV competition in each market Most markets have one dominant Pay TV provider Satellite offers the best option for competition with minimum capital infrastructure