Mobile TV to cars the original offer August 2009 2009 RaySat Broadcasting Corporation. All rights reserved. AT&T and the AT&T logo are property of AT&T Intellectual Property 1
Introduction AT&T CruiseCast SM Live satellite TV for mobile consumers Designed for passengers in: cars, SUVs, trucks, RVs, boats Live television, the #1 form of media, joins phone, text and Internet in the car Direct-to-Car satellite television ( DTC ) greatly expands the satellite TV market 30 million home satellite installs new target installs: 250 million vehicles Nationwide service launched June 2009, scalable, operational mass-market infrastructure Utilizes innovative proprietary technologies well positioned to be adapted by auto OEMs Used only $30 million to create a fully operational, national television service Exclusively provided by RaySat Broadcasting Corporation Founded in July 2007: AT&T, Inc. and RaySat, Inc., a provider of in-motion antennas 2
Investment highlights 1 st mover in the massive addressable market for in-vehicle satellite television service Fully operational service, adding initial subscribers, commencing marketing activities Unique technology addresses aftermarket and OEM requirements AT&T partnership, brand and marketing power Highest quality video and largest selection of content vs. expected competition Unlimited expansion capabilities (content, services) Clear distribution strategy with large base of existing partners Leadership team of industry veterans from satellite and mobile content companies 3
In-vehicle: the largest untapped TV market AT&T and RBC commissioned 2 comprehensive studies, both indicate market demand McKinsey & Co. study highlight: 66% of current /likely RSE users see AT&T CruiseCast as favorable 38% would buy service DoT estimates 25mm RSEs in 2009 Frost & Sullivan study highlight: 55% of respondents interested in live TV for their vehicle Includes 23% of respondents that are very interested 4
AT&T CruiseCast The Service Replicating the at-home television experience to maximize customer acceptance 22 premium channels of live television covering all age groups and interests Standard program guide and RF remote control 20 channels of satellite radio One package currently available: $28 per month, discounts for 1 or 3 year plans Subscribers purchase the AT&T CruiseCast viewing system, current MSRP $1,299, target $999 in early 2010 Kids, Tweens & Teens Family & Entertainment Sports News & Weather 5
How we do it Operate our own private broadcasting network Teleport and headend located at Intelsat s world-class Mountainside, MD facility Lease transponders on geo-stationary satellites Aggregate content from premium providers Broadcast nationwide signal optimized for Direct-to-Car service Supply proprietary in-vehicle television systems (receiver and antenna) Training and support of car dealerships and 12-Volt installers Simple 1 hour installation process Manage provisioning and customer service Mass-market ready provisioning system, 6 months of trial and testing Supported by Synchronoss, provides same functionality for AT&T s iphone service and Oracle ERP system 6
Service activation 1 Customer signs up online, or calls 866-800-9030 to provide personal information, credit card info, and programming features desired. 6 Entitlements (EMMs) addressed customer s unique SIM card are broadcast on every satellite transponder. The EMMs identify which programming the subscriber is entitled to watch. Mountainside, MD Provides Fiat-Shamir public key proof of authenticity to the SIM. 2 Installer completes installation of antenna and receiver in vehicle and calls 866-410-4437. 3 4 Installer enters user ID and PIN (received upon passing online certification test), then enters the STB ID, SIM Card ID, and the contact phone number used by the customer for service sign-up. The contact phone number is used to look up the customer and determine which channels they have ordered. 7 8 SIM Card SIM card and main chip in receiver are paired when device is added so communications over the internal bus is encrypted. CruiseCast Receiver w/ ST 5202 Receiver gets the EMMs and the SIM ignores all packets not uniquely addressed to it. It stores entitlements (programming rights) defined for the user. The subscriber system has now been activated over the air minutes after installation is complete! 5 Harmonic MUX NDS CA Headend (ECMG) NDS Signature Server ECMG & MUX encrypt A/V content (with help of Signature Server) for uplink to the satellite. 7
Competitive advantage: The Technology Our industry-changing Ku-band micro-antennas Traditional Direct-to-Home satellite antennas: useless in mobile environment Existing vehicle antennas: too large (36, ~50 lbs.), expensive ($3,000 to $4,000 installed) Solution: MMIC chips (Monolithic Microwave Integrated Circuits) Results: the T7 Micro-Antenna Small form factor - horizontal design, 4 high x 9 diameter Low manufacturing costs Signal reception across the continental United States Virtually unlimited bandwidth capabilities for new content and, the OEM T9 Micro-Antenna Same high quality video reception and nationwide coverage Only 0.5 high x 7.5 length, can fit inside rooftops and spoilers Current R&D targeting manufacturing cost reductions 8
Competitive advantage: The Technology (cont d) Our in-vehicle receiver (the set-top box ) brings the living room experience to the car Full program guide, RF remote in the car: the most comfortable mobile environment Compact 8 x 6 form factor fits easily in trunk or under a seat Patent-pending interleaving transmission protocol and buffer in the receiver allows service continuity (2 mins.) when the antenna loses line-of-sight with the satellite 9
Comparison of other in-vehicle technologies SERVICE DESCRIPTION ISSUES MediaFLO USA Sirius Backseat TV Uses 6 MHz of 700 MHz band spectrum, wholesales to mobile operators 2008 announced in-vehicle plans Three channels of kids TV Second antenna/receiver]required Optimized for phones, not 10 displays ~25 channels maximum (lack spectrum) Terrestrial network, major markets only Low video bit-rate (~200 kbps) Limited to 3 kids channels ICO Global Comm. DVB-SH mobile video service, announced commercial launch in 2009 10 15 premium channels 20 MHz of 2 GHz S-band spectrum (cannot scale to more channels) Expensive infrastructure (G1 satellite + costly terrestrial repeater network) ATSC free-to-air digital video broadcasting for local market television content Portable cache and carry video content 10
Marketing and distribution Core initial marketing channel: Aftermarket through car dealers and 12-volt retailers Over 700 car dealerships and 12-volt retailers, growing every day Aftermarket needs value-add product to replace commoditized satellite radio and GPS Big-box electronics retailers are next Exciting marketing agreements completed, launching today and in Q3 2009 Crutchfield catalog summer issue: 3 million audience AT&T U-verse catalog: 7.4 million audience AVIS/Budget Group: 50 units in select markets, targeting 1,000 by year-end Every aspect of the business has been coordinated to produce the OEM solution Currently in discussions / testing with: Mercedes Benz, BMW, Ford, GM and Audi/VW 11
12 AT&T co-marketing
13 Sample marketing literature
Research and development in progress Embedded antenna for the OEM market Size reduction advancements for the T7 roof mount antenna Cost reduction advancements for both the antennas and the receiver (set top box) New service offerings Location-based mapping and advertising GPS traffic and weather Two-way vehicle diagnostics and trouble resolution Future 2-way capabilities in the form of terrestrial (AT&T 3G resell) and satellite Premium movie content 14
Satellite TV On Wheels: Ku versus Ka Ku band advantages: Continent coverage Single teleport Lower rain fade (broadcast ACM does not work) BUT: 2 TV channels for 47 dbw transponders (25 cm antenna) Ka band advantages Regional, country by country coverage (focused service) Local channels (per country or big city) Rev share model for an operator Stronger EIRP = smaller antennas For 10% of the capacity, 25cm antenna, an operator can have 20-30 multiplexed SD channels In the future - Single antenna for Broadband and TV Proprietary and Confidential
SatixFy Catniss ASIC Catniss is a full DVB S2/X implementation Symbol rates 100Ksps to 500Msps Full blockage protection STB on chip Full mobile antenna controller (gyro, motor controllers) Capable of 1-way (mobile TV, Satellite Radio) or 2-way Enable a single chip antenna controller/stb implementation Ka, Ku, C and L-band support Initial production chips in Q3 2014
Proprietary and Confidential The New versus the Old Self installed
Automotive infotainment offering Go-To-Market strategy Product offering Self installed Mobile TV Equipment cost to channels - $199 Equipment cost to end users at POS - $299 Service fee (20 TV channels) -$9.95 or $14.95 (or $499 with 2 year of service) Go-To-Market Aftermarket National distributor 12V retail Mom & Pop; CAR Toys New car dealers High End OEM High End SUV GM900: Escalade; Yukon; Denali; Suburban; Tahoe RV Companies Maritime Quantities Year 1 Year 2 Year 3 Year 4 Year 5 Aftermarket 5,000 25,000 100,000 200,000 300,000 OEM 50,000 250,000 Proprietary and Confidential
Proprietary and Confidential Example: Satellite TV on Wheels in Middle East 10 Mbps 10% of beam EIRP G/T = +3 db/ k Size = 25 cm
#3: Satellite Radio Example: Satellite Radio in Europe Modulator Modulator Modulator 1 Mbps 1 stream = 10% of SuperStream time slots 10% of beam EIRP G/T = -3 : -5 db/ k Size = 8-10 cm Different languages in different countries Proprietary and Confidential
Low cost Satellite Radio Integrated Mobile Radio : Low cost <$75 BT/FM wireless transmission to Car Radio Powered from Car Battery Proprietary and Confidential Item Cost Ant +Assembly 15 LNB 7 Rec Chain 6.1 Ka Modem 14.8 RF/BT/sensors 7 Power circuits + others 11.6 Production(15%) 9.2 Total off factory 70.7
Proprietary and Confidential Satellite Radio Satellite provider view Aftermarket and later OEM 1 Mbps = 30-40 radio channels 100 for the equipment, 5 a month As alternative, 199 for the product and 2 years of service IF we could reach a market size of 1M in a country like France or Germany and the satellite operator gets 10%, potential of getting 20M for 2 years out of 10% of 8 beams. Lucrative.
Proprietary and Confidential Motivation #4 : Mobile Broadband Full broadband coverage, in motion: Cellular and satellite (when no adequate cell coverage) Single bill from, say, T-mobile or sprint: $10/GB (Current price) Safety and security (OnStar coverage issue) Possible bundle with mobile TV Vertical markets: RV, Boats, Limo, trucks Next generation: Consumer offering (3-5 years) Requires low cost COTM antenna integrated with BUC and Modem with satellite/cellular operation
Example: Mobile Broadband in the US The Concept 100 Mbps Full rate 10% of EIRP G/T = +5 db/ k Size = 40 cm Tx Path Rx Path WiFi Cellular antenna Mobile terminal W ATSC/MH ASIC Mobile BB Mobile TV Sat radio HSPA 3G/4G module To car audio system Car CPU/IP system Flash DDR Proprietary and Confidential
Summary Interesting market pursued by 10 companies in the last decade Each one had it s own advantages and disadvantages Big market waiting to be pursued Satellite TV on Wheels book Expect next attack in 2014/2015