1. PRESENTATION TO PARLIAMENTARY PORTFOLIO COMMITTEE ON THE CONVERGENCE BILL BY SENTECH LIMITED
27th May 2005

2. TEAM Chief Operating Officer: Mr Gladwin Marumo
Executive: Regulatory & Government Mr Dingane Dube
Manager: Office of the CEO Mr Thabo Komane
Specialist: Government Relations Mr Matime Nchabeleng
Specialist: Policy & Licensing Ms Dimakatso Qocha
Head of Technology Management Mr Deon Conradie
Cliffe Dekker Attorneys Ms Janet Mackenzie

3. WHY CONVERGENCE?
Enables delivery of content on various platforms and receiving devices
Triple play: ability to offer bundles of ICT services (voice, Internet access and broadcasting services)
Move from push to pull content delivery
User demand of content delivery any time any where any platform
Create once, distribute many

4. WHY CONVERGENCE?
To remove the inhibitors placed by Telecommunications Act
Different networks can deliver the same services and content - they must be able to do so
Increase teledensity

5. WHY CONVERGENCE? Interactivity requirements (broadcasting)
Multiple services on single device (eg. DVB on Handheld)
Lower access cost
Improved functionality
More efficient spectrum usage
Content on demand

6. INTERNATIONAL TRENDS Country Licensing Regime Australia
Country
Licensing Regime
Australia
Carrier licence and carriage service provider
European Union
General authorization regime
India
Unified licensing
Japan
Simple registration/ notification
Malaysia
Converged licensing for national operators
Singapore
Facilities-based and service-based licensing

7. SOUTH AFRICAN SITUATION
Need to cater for cultural, social and public interest concerns unique to South Africa
Section 192 of the Constitution
Explain what have to be retained, repealed & changed

8. CURRENT SCENARIO ORIGINATION TRANSPORT DESTINATION
BROADCASTING (Broadcasting Act, IBA Act, ICASA Act, Sentech Act)
Broadcasters
Broadcast Content
Signal Distribution
(Sentech, Orbicom etc.)
TV & Radio Sets
End Users
ENHANCED DATA SERVICES (Telecommunications Act, ECT Act, ICASA Act)
VANS,
ISP, etc
Information Services
Telecommunication Networks
(Telkom, SNO, Sentech, WBS, USAL’s)
Computers &
Data Terminals
End Users
VOICE / DATA CONVEYANCE SERVICES (Telecommunications Act, Icasa Act)
Voice / Data / Video
Fixed Networks (Telkom, SNO, Sentech, USALs)
Voice / Data Terminals
End Users
Mobile / Wireless Networks (MCOs, Sentech, USALs)

9. COMMON CARRIER STATUS Common carrier status is in the public interest
Need to migrate to digital broadcasting
Universal access to broadcasting services
Economies of scale
Likelihood of cherry picking
Migration:
Analogue: one service per channel per frequency, tied to broadcaster
Digital: number of services per channel (frequency), tied to SD
Common carrier: to ensure smooth transition (universal access)

10. POST CONVERGENCE ORIGINATION TRANSPORT DESTINATION
Communications Services (Convergence Act)
Service
Providers
(Broadcasters
VANS, ISP’s
etc)
Application
Services
Content
Information
Network
Facilities
Customer
Premises
Equipment
End Users

11. INHIBITORS IN SENTECH’s LICENCES
The Bill must remove all inhibitors & restrictions imposed on Sentech :
Prohibition on carriage of switched voice (Multimedia Services Licence)
Restriction on the provision of international services directly to end users (Carrier of Carriers Licence)

12. REGULATORY DISTINCTION BETWEEN BROADCASTING AND MULTIMEDIA

13. REGULATION OF ANTI-COMPETITIVE CONDUCT
Regulatory imbalances must be addressed -
Licenses must be technology neutral
Level playing field
Special licence terms & conditions for operators with significant market power

14. REGULATION OF COMPETITION
ICASA responsible for ex-ante regulation
Regulation of access, interconnection and facilities leasing obligations, including pricing
Regulation of charges and imposition of cost orientated charges and rates on SMP licensees
Imposition of special licence terms and conditions on licensees with significant market power

15. REGULATION OF COMPETITION
Competition Authorities responsible for ex-post regulation -
Abuse of dominance
Horizontal prohibited practices
Vertical prohibited practices
Specific rules need to be formulated for the communication sector
margin squeeze, discriminatory and exclusionary conduct

16. ICASA OR COMPETITION AUTHORITY?
Competition Authorities and ICASA must be jointly responsible for the regulation of mergers –
Competition Authorities responsible for competition
ICASA responsible for licensing

17. FUNDING THE REGULATOR
Independence
Proposal
Maximum of 1% of annual turn-over
USF

18. THE EXECUTIVE – POLICY
The Minister authorised to make policies and the following is in the public interest and is not unconstitutional -
Policy
Setting of framework for individual licence applications
Determination of radio frequency spectrum policy

19. TRANSITIONAL PERIOD During transition
Inhibitors to convergence contained in the Telecommunications Act and any licence should be of no force and effect
90 days license re-application period imposed on existing licensees must be removed
Licensees should not required to re-apply

20. TRANSITIONAL PROCESS
Transitional process must cater for -
Status of existing regulations
Status of pending litigation or complaint proceedings before ICASA or the courts
Continued validity of type approvals, supplier registrations and other similar authorisations
Status of pending licence applications

21. GENERAL
Assignment of broadcasting radio frequencies to the signal distributor under a digital environment
Resellers and content services must not be licensed – light touch!

22. Thank you