Sentech Presentation to the Select Committee on Labour and Public Enterprises 7 March 2006

Sentech Team Gladwin MarumoChief Operating Officer Dingane Dube Executive, Government & Regulatory Affairs Marc D’OliveiraManager, Office of CFO Johan RaathExecutive, Office of COO

Agenda Commitments made in 2004 Multimedia Business –MyWireless –BizNet –VSat Broadcast Network –Digital Terrestrial Television –Regional TV CSI Financials Year Ahead

“The third world is under-developed mainly because it missed the industrial revolution, for whatever reason, slavery, colonisation etc. Unless it hops on the information superhighway and is part of the communication age, the 21st century will be a re-enactment of the 20th” Ron Bettig Professor of Communications 1990

Commitments made in 2004 Grow the Multimedia business Prepare the company for digitisation Increased coverage for broadcasting Continue as the State’s delivery partner –Education, Health and e-Government –Development of the Second Economy

Multimedia Business ICT Africa Awards Most Innovative Company in Africa

MyWireless Focus on customers and service delivery –My ADSL best Wireless Broadband service in SA –Stable network Launched in Nelspruit Launched MyWireless Flexi –Bandwidth-capped Launched bundled services

BizNet Service launched – 1 November 2005 Fixed Wireless service Provides guaranteed throughput service to Government and business –64kb/s to 2Mb/s –Ideal for the replacement/supplementing of leased lines Vital element of delivery to State

Vsat VStar still the service of choice –MPCC’s –Schools –State –Business Launched Vmesh –Interconnection of offices and head offices without need to transmit through a central hub

Broadcasting

Digitisation MTEF funding announced Sentech commences digitisation of television network(DTT) from 2006 Fast-track of network digitisation planned e-Services on DTT Sentech as the multiplex operator –The State’s broadcasting assets at the hub

Regional TV Possible to provide either analogue or digital network –Analogue will increase the burden for digitisation program Full coverage of planned TV 4 and 5 areas very difficult if not impossible with analogue –Frequency spectrum issues National Coverage for regional stations possible

Corporate Social Investment

BBQ Corporate Social Investment Award –Delivering services to communities and our people –Using the power of communications to uplift

Infrastructure

Infrastructure Projects EASSy SKA National Broadband Network –Wireless Access –National Fibre Capacity

EASSY Routing

Financials

Cash Flows for the 2005 Financial Year Cash utilised in operationR 118 Mil –Cash generated by operations R148 Mil –Net finance costs (R 32) Mil Cash utilised in investing activities(R 19) Mil –Assets acquired (R 35) Mil –Disposal of Assets R 27 Mil Cash generated from financing activitiesR 2 Mil –Interest bearing borrowingsR 2 Mil Net cash movementR 101 Mil

Financial highlights

The Year Ahead Begin fast-track Digitisation of TV network e-Government Expand national broadband business –Second economy Social investment EASSy implementation PSRCS

Media Briefings 6 February 2006 The Honourable Deputy President –Accelerated and Shared Growth Initiative “…, ICT infrastructure which includes the strategy to rapidly grow South Africa’s broadband network; implementation of a plan to reduce telephony costs more rapidly; the completion of a submarine cable project that will provide competitive and reliable international access, especially to Africa and Asia; …”

Media Briefings 6 February 2006 Economic, Investment and Employment Cluster’s report following the January 2006 Lekgotla. Macro-Economy and Infrastructure Development: The Honourable Minister of Trade and Industries Mandisi Mpahlwa “ The final infrastructure spend that the Public Investment focus group of the Cluster will focus on will be the roll-out of the Sentech Wireless Broadband Network under the auspices of the DOC. During 2006/7, the cluster is hoping to achieve the delivery of universal access, providing cost-effective connectivity that supports e-health and e- education services.”

Sentech is ready Fast network rollout –Job creation Rollout Sales and support (ongoing and sustainable) Stimulation of SMME’s Universal access a priority –Every broadband connection stimulates a potential micro-enterprise –Bridging the digital divide –Bring our communities and our youth into the information age

Requirements for broadband rollout Funding –Direct full State funding National Treasury and the budget –Partial State and partial loans IDC, DBSA, or Private institution Ring-fence the broadcasting national asset Sentech will move fast once funding is available.

National Budget Allocations Digitisation funding – first tranche in 2006/7 budget –Sentech will begin the process Insufficient MTEF allocation for full digitisation –Ongoing discussions Time is of the essence to meet the obligations for 2010.

The EASSy imperative Our country needs the additional bandwidth if we are to be able to meet the requirements of the SKA The EASSy cable will result in lower cost connectivity to the rest of the world –Lower communication costs Sentech ideally placed to manage the EASSy connectivity for the country on an open access basis – fair prices for all. Funding is now a priority to ensure SA is at forefront of process.

Delivery partner of the State National broadband rollout will broaden access to voice and data services –e-education –e-health Sentech as an SOE committed to remain a catalyst and enabler for the State to meet delivery objectives on a national basis.

Thank you