1. PRESENTATION TO SELECT COMMITTEE ON LABOUR AND PUBLIC ENTERPRISES ON THE CONVERGENCE BILL BY SENTECH LIMITED 31 AUGUST 2005

2. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 2 TEAM Specialist: Government RelationsMr Matime Nchabeleng Specialist: Policy & LicensingMs Dimakatso Qocha Specialist: TechnologyMr Chris Johnson Senior Transmitter ManagerMr Frank Creese Team LeaderMr Peter Vamvadelis Mr Cameron Valentine Mr Johan Scholtz

3. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 3  TELECOMMUNICATIONS MEANS: ANY TRANSMISSION, EMISSION OR RECEPTION OF SIGNS, SIGNALS, WRITINGS, IMAGES AND SOUNDS OR INTELLIGENCE OF ANY NATURE BY WIRE, RADIO, OPTICAL OR OTHER ELECTROMAGNETIC SYSTEMS.(1)  A BROADCASTING SERVICE MEANS: A RADIO COMMUNICATION SERVICE IN WHICH THE TRANSMISSIONS ARE INTENDED FOR DIRECT RECEPTION BY THE GENERAL PUBLIC. THIS SERVICE MAY INCLUDE SOUND TRANSMISSIONS, TELEVISION TRANSMISSIONS OR OTHER TYPES OF TRANSMISSION.(2)  IT MEANS: ALL THE EQUIPMENT, PROCESSES, PROCEDURES AND SYSTEMS USED TO PROVIDE AND SUPPORT INFORMATION SYSTEMS (COMPUTERISED AND MANUAL) WITHIN AN ORGANISATION AND THOSE REACHING OUT TO CUSTOMERS AND SUPPLIERS.(3) REF: Source 1&2 ITU Radio Regulations - Articles1 - Edition of 2001 Source Newton’s Telecom Dictionary - The Official Dictionary of Telecommunications Networking and Internet DEFINITIONS

4. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 4 DEFINITION OF CONVERGENCE  THE ACKNOWLEDGEMENT OF THE BLURRING DISTINCTION OF TELECOMMUNICATIONS, BROADCASTING, COMPUTERS AND DATA NETWORKS  THE PROVISION OF COMMUNICATIONS SERVICES OVER THE SAME NETWORK, VOICE AND DATA TRANSMITTED OVER THE SAME NETWORK  BROADCASTING, TELECOMMUNICATIONS, COMPUTERS AND INTERNET OVER THE SAME NETWORK

5. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 5 ASPECTS OF CONVERGENCE 1. LEGAL 2. TECHNICAL 3. COMMERCIAL 1. SINGLE REGULATOR 2. CONVERGENCE FRAMEWORK (a) POLICY (b) LEGISLATION (c) REGULATIONS REGULATING CONVERGENCE

6. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 6 ADVANTAGES/BENEFITS OF CONVERGENCE (Digital Technology) 1. DIGITISATION 2. BRIDGING THE DIGITAL DIVIDE 3. INTERNET PENETRATION - PROVIDING INFORMATION, VIDEO AUDIO, PRIVATE DATA, ETC. - AT MPCC’S, SCHOOLS, CLINICS 4. INTRODUCING COMPETITION AND CHOICE 5. LOWERING OF PRICES (ECONOMY OF SCALE)

7. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 7 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

8. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 8 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

9. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 9 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

10. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 10 INTERNATIONAL TRENDS CountryLicensing Regime AustraliaCarrier licence and carriage service provider European Union General authorization regime IndiaUnified licensing Japan Simple registration/ notification Malaysia Converged licensing for national operators Singapore Facilities-based and service- based licensing

11. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 11 CONVERGENCE MAPPING:LICENSING CONTENT SERVICES PROVIDERS APPLICATION SERVICES PROVIDERS NETWORK SERVICES PROVIDERS (OPERATORS) COMMUNICATION SERVICES (Convergence Act)

12. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 12 SOUTH AFRICAN SITUATION  Need to cater for cultural, social and public interest concerns unique to South Africa  Section 192 of the Constitution

13. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 13 CURRENT SCENARIO End Users TV & Radio Sets Signal Distribution (Sentech, Orbicom etc.) Broadcast Content Broadcasters BROADCASTING (Broadcasting Act, IBA Act, ICASA Act, Sentech Act) DESTINATIONTRANSPORTORIGINATION End Users Computers & Data Terminals Telecommunication Networks (Telkom, SNO, Sentech, WBS, USAL’s) Information Services VANS, ISP, etc ENHANCED DATA SERVICES (Telecommunications Act, ECT Act, ICASA Act) Mobile / Wireless Networks (MCOs, Sentech, USALs) End Users Voice / Data Terminals Fixed Networks (Telkom, SNO, Sentech, USALs) Voice / Data / Video VOICE / DATA CONVEYANCE SERVICES (Telecommunications Act, Icasa Act)

14. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 14 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

15. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 15 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)

16. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 16 REGULATORY DISTINCTION BETWEEN BROADCASTING AND MULTIMEDIA

17. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 17 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

18. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 18 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

19. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 19 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

20. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 20 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

21. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 21 FUNDING THE REGULATOR Independence Proposal Maximum of 1% of annual turn-over USF

22. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 22 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

23. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 23 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

24. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 24 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

25. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 25 GENERAL Assignment of broadcasting radio frequencies to the signal distributor under a digital environment Resellers and content services must not be licensed – light touch!

26. DD/mr/Select Comm-Labour & Public Ent –31 Aug 2005 26 Thank you