SA cellular market overview Dobek Pater Analyst BMI-TechKnowledge SA cellular market overview

Market share by subscriber base Market share by revenue From today onwards Cellular market growth 2001 - 2006 The market today & tomorrow (EoY - March) Operator 2002 2006 Market share by subscriber base Vodacom 59% 54% MTN 36% 32% Cell C 5% 14% Market share by revenue 63% 61% 34% 3% CAGR: Vodacom: 13.0% MTN: 10.8% Cell C: 48.0% Total market: 15.5%

3 operators - comparison Vodacom MTN Cell C market leader upgraded infrastructure/increased capacity & 1800 spectrum technology – investment in GPRS, less sophisticated billing platform continued success will require improved network capacity/quality & innovative “mobile data applications development” currently have high brand visibility, aggressive marketing campaign main challenge – limiting churn to Cell C expected to remain no. 2 player in SA technology – investment in GPRS, sophisticated billing platform, “Airborne” continued success will require improved domination of channels limited brand visibility, generic campaign – “Hello the future” main challenge – improving visibility and positioning of MTN brand; limiting churn to Cell C always no. 3 operator in SA market -expansion into Africa? currently rolling out their network – roam on Vodacom network new technology – investment in GPRS success will require innovative products & services, new bundles, aggressive marketing, domination of channels & “credibility” high brand visibility main challenge – churning subscribers from Vodacom & MTN

Revenue growth Revenue growth by operator Voice vs. data revenue growth Total market in 2006: R49bn (bigger than fixed line market) CAGR: Vodacom: 18.5% MTN: 17.6% Cell C: 31.0% - CAGR: voice: 16.7% data: 62.7% Data component of revenue: now: 3% in 2006: 12%

Strategies Vodacom MTN Cell C Appeal to wide range of users shifting focus partially to data i-mode type business plan for data (share revenue) Concentrate on high end business & SMME sector MTN keeps revenue generated on network Branding strategy Address young users now with hope of grooming them into high spenders later banking on voice Economies of scale Noticed Africa late, but aggressively moving in Must overcome elitist image Moved into Africa early and banking on it Disadvantaged by late market entry Must overcome problem with roll out Not likely to move into Africa

GPRS / 3G GPRS 3G slow uptake limited usage Africa (incl. SA) will be voice-driven for the near to medium-term future EDGE most likely introduced in SA shortly Key success factor deliver mass consumption content & multimedia at affordable prices 3G not likely to take root in Africa more likely scenario – 5G will be adopted in the future (5 - 10 years’ time)

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