Broadband Connectivity (for) Africa Bill Dale Executive-Global Capacity International & Special Markets Telkom SA

Outline “Afrolinque” - Benefits to Africa Capacity for Africa Expanding Africa’s Broadband Capacity

“AFROLINQUE” BENEFITS TO AFRICA

Africa’s Need for Global Connectivity Liberalisation of African market. Limitation on economic growth & foreign investment. High cost and lack of broadband, reliable connectivity. Evolution of internet, VOIP, mobile market & integrated network solutions. Africa’s dependence on others for transit of voice phone traffic. The Africa Telecommunication market has undergone widespread changes to its regulatory environment over the past 5 years. A large number of the economies have opened for competition, introduced cellular operations, IP related services, opened the VAN sector for competition, etc. Perhaps most importantly is that huge advances were made creating stable economic environments that are conducive to foreign investment and business in general when compared with the situation of 5 years ago. What has always plagued the potential of huge economic growth & foreign investment on the continent is Africa’s inability to provide reliable broadband connectivity at affordable cost. Such connectivity is essential for the provision of data services and integrated network solutions that is demanded for the development of the commercial & industrial sectors of the region’s economy. In the recent past (1-2 years) we have noted a huge surge in internet services, IP services, Mobile market exploding in countries like Nigeria, Tanzania, DRC, South Africa (to mention only a few). All of these developments acted as drivers for the need to have state-of-the-art cost-effective global connectivity. Africa’s dependence on transit services from BT, FT, AT&T and others to meet its inter-regional connectivity requirements has however resulted in a huge outflow funds that rendered Africa unable to underwrite and expand its own global broadband global communications network.

Afrolinque (SAT-3/WASC/SAFE) Landing Points 1. Portugal 2. Alta Vista (Spain) 3. Senegal 4. Côte d'Ivoire * 5. Ghana * 6. Benin 7. Nigeria 8. Cameroon 9. Gabon 10. Angola 11. Melkbosstrand 12. Mtunzini 13. Reunion 14. Mauritius 15. India 16. Malaysia 1 2 3 15 6 4 5 7 16 8 9 SAT-3/WASC 10 SAFE 14 13 SAT-2 11 12 * : Regeneration station

SAT-3/WASC/SAFE -Technical Specification System length : 27850km System bandwidth : SAT-3/WASC : 20Gb/s initially 120Gb/s ultimately SAFE : 10Gb/s initially : 130Gb/s ultimately Equivalent of 5.8 m (SAT-3/WASC) & 6.3 Million (SAFE) simultaneous telephone calls. 34 major global operators invested $670m System design life of 25 years. Telkom is the network administrator

Benefits for Africa Initiated, owned & operated by Africans. Retention of revenue on the continent. Transfer of essential skills & technology. Global & regional positioning resulted in optimum funding portfolio. Providing secure and reliable broadband connectivity. Global state-of-the-art connectivity underlying key to foreign investment. Initiated, owned and operated by Africans. No longer totally dependent on European and other operators for transit of inter-regional requirements. This obviously enables the retention of significant revenue to the continent that in the medium to long term can release additional funding to many other sectors of the region’s economy where it is so much needed. African operators have received intensive training on some of the world’s most advance telecommunication technology. We have the interesting situation with SAT-3/WASC/SAFE that by far the biggest part of the system is operated & maintained by Africans on behalf of European, American & Asian investors. Positioning the system as both a regional and global connectivity solution resulted in an optimum funding portfolio where 54% of the project cost is subsidised by foreign investment. The system is technically configured to be highly reliable and secure . Global state-of-the-art broadband connectivity is key to foreign investment and sustainable business operations on the continent.

Capacity For Africa

Telkom Satellite investments Intelsat – approximate 1.16% holding Inmarsat – approximate 0.3% holding New Skies – (value $5.6M) Satellite systems currently used by Telkom: Intelsat New Skies PanAmSat EuropeStar Intelsat and Inmarsat potential share price confidential until IPO, so value not stated here 8.1 Million for voice and data and 27.9 million Dollars for Broadcast are our yearly costs for satellite capacity $36 Million total Telkom is the 5th largest purchaser on Intelsat capacity among all global carriers.

Correspondent relationship with international operators Global destinations African destinations

Carriers in the African market Direct links into Africa Direct links into SADC

VoIP Established Voice Over Internet Protocol (VoIP) Point of Presence (PoP) in London Attracting voice minutes destined for RSA and Africa from “Emerging” Carriers Traffic Outgoing from RSA on “LCR” basis Established Telkom SA as VoIP Clearinghouse Deploying VoIP with African Carriers More Global VoIP PoPs in plans The VoIP Leader in Africa

Telkom’s Capacity Plan for Africa Afrolinque Satellite / Fibre solutions Intelsat partnership Wireless broadband Network hubbing IP roll-out SAIX (Internet connectivity)

EXPANDING AFRICA’S BROADBAND CAPACITY

SAT-3/WASC/SAFE + EAST EAST AFRICAN CABLE SAT-3/WASC SAFE East: Landing Points 1. Portugal 2. Alta Vista (Spain) 3. Senegal 4. Côte d'Ivoire 5. Ghana 6. Benin 7. Nigeria 8. Cameroon 9. Gabon 10. Angola 11. Melkbosstrand 12. Mtunzini 13. Reunion 14. Mauritius 15. India Malaysia 1 5 6 7 9 10 3 4 2 8 11 12 13 14 15 16 SAFE SAT-3/WASC EAST AFRICAN CABLE So what is still lacking on the continent in terms of connectivity? In this regard I am pleased to announce that Telkom South Africa has embarked on a feasibility study a few weeks ago to determine the market viability of this link. East: South Africa + Mozambique + Tanzania + Zanzibar + Kenya + Madagascar

East Africa Cable Proposal? 3 Primary route configurations are being considered. Route 1 : South Africa to Kenya with landings at Mozambique, Madagascar, Tanzania & Zanzibar. Route 2 : Same as Route 1 with extended termination in Djibouti instead of Kenya. Route 3 : Same as Route 1 with extended end termination in India (Cochin) with intermediate landings in Seychelles & Maldives. Primary route configurations that are being considered includes a basic configuration between South Africa & Kenya with landings at Mozambique, Madagascar, Tanzania & Zanzibar. Please to announce that we have embarked on a feasibility study some time ago.

Project Status & Investment Interest Project cost estimated to range from US$110 Million (Kenya) up to US$200 Million (India). Innovative financing solutions based on SAT-3/WASC/SAFE experience. Telkom traffic forecast & feasibility study currently ongoing. Telkom decision to further pursue the concept scheduled for 4th Quarter 2002. Significant interest expressed by potential investors and landing point operators. 1. Project cost is estimated to range from US$1100 Million (kenya) up to US$200 Million for a configuration landing in India. 2. From our experience with SAT-3/WASC/SAFE, we believe that innovative financial solutions is available that will make the project affordable for operators in the region whilst simultaneously maintaining ownership and control of its management. A Telkom feasibility and traffic forecast study was initiated recently and is currently ongoing. We expect to have decision on whether to continue the promotion of the concept by 4th quarter 2002. Significant interest was expressed from all of the proposed landing point parties, including India, Maldives, Seychelles, Kenya, Mozambique, Tanzania and Zanzibar.

Thank You