1. Presentation to Parliamentary Portfolio Committee on Telecommunications & Postal Services 14 November 2014

2. The Purpose of Broadband Infraco Slide 2 DTPS Vision 2020 100% of South Africans will have access to broadband services at 2.5% less of the populations average monthly income NDP Broadband Infraco’s purpose is in line with the NDP of establishing national, regional and municipal fibre-optic network to provide the backbone for broadband access. Broadband Infraco operates on the premise that national backhaul, provincial backhaul and districts backhaul require state intervention, thus allowing private investment to lead the way in the access market. SA Connect Broadband Infraco’s roll-out of long distance backhaul fibre to underserviced areas will enable provincial governments to leverage such broadband infrastructure and services for economic growth, job creation initiatives and poverty reduction efforts. Digital Readiness BBI boast an open access network and supports public and private investments in the telecommunications sector. Delivery of 28 PoP to underserviced areas. Broadband Impact Economic Metrics: For every 1% increase in broadband penetration GDP increases by R4.83bn For every R1 spent on broadband society benefits R2.53 Digital Opportunity Skills and institutional capability Internship Programme (10 interns) Broadband Infraco Staff: Average age of 34 years Digital Development Broadband roll out is aligned to national government programmes. Aggregation of public sector demand (SITA 10 year contract Enterprise development and localisation Digital Future Long term collaboration of existing infrastructure providers: Eskom Transnet Freight and Rail PRASA Provincial government WACS – consortium DFA

3. Slide 3 Broadband policies and regulations Broadband Infraco Act  The ECA Amendment Act, limits the operational scope of Class ECS licences to district municipalities only and given Broadband Infraco’s national operations, the Class ECS licence is not a viable option  2010  issued with ECNS licence  2014  applied for ECS licence  Explore partnership with other SOC’s within DTPS ICT Policy Review Committee  2012  requested membership to PRC while under DPE  November 2014  requested membership to PRC  USAASA has finalised its National Strategy and the Funding Manual  Broadband Infraco supported the USAASA MTEF application USAASA ICT Policy Review Panel Infrastructure & Services Sub-Committee  Broadband Infraco is actively participating in the Infrastructure and Services Committee of the Panel

4. Shareholder Capitalisation Broadband Infraco is a significant investor in the 5.1Tbits/s West Africa Cable System (WACS) Project. The cable connects South Africa (SA) to the United Kingdom (UK), with landing stations in Portugal and along the west coast of Africa. Lower cost, sustainable and efficient international bandwidth; Positions SA for future economic growth as it connect SA to key global knowledge economies of the world. Swaziland: Created new route that goes through Pietretief then Mahamba Namibia: Created new route Aries, Schuibsdrift then Onseepkans Mozambique: Kamedien to Komatipoort on the TFR fibre Zimbabwe: Soekmekaar to Beitbridge SADC CONNECTIVITY Duff to Stanger to Zinkwazi then Athene North Station to Durban : creation of parallel link Oribi, Eros & Kokstad Increase capacity on the Golden triangle i.e. 38 PoP and Fibre deployment Internet Protocol: Scalable network: Ermelo to Geluksplaas then Witbank Provisioning services to Secunda Welkom Bethlehem to Sorate Megawatt to Bloemfontein deployment of fibre Uniondale, Louterwater then Melkhout Grahamstown alternative route connecting Rhodes university NSN, Belabela, to Modimolle, then Polokwane WACS CONNECTIVITYEXPANDING ACCESS ENABLING GOVERNMENT Connected Government through SITA. This was to have the South Ring between Gauteng, Kwa-Zulu Natal Western Cape. Testing Equipment Monitoring system Transmission equipment Broadband Infraco Implementation as at 2012 WACSESKOM (assets) R377 300 000 TRANSNET (assets) R34 163 000 SELF BUILD R779 011 000 OFFICE & COMPUTER EQUIPMENT R13 955 000 R1, 8 billion R440 534 000 Resultant Network 12 681km of fibre 144 PoP Slide 4

5. Slide 5 What does each axis represent? Customers Revenue Cost of Sales A significant growth of our customers from 1 to 14, including signing SITA as an anchor client Decline in 2013 due to the end of Rights of Use (ROU) with Neotel. More customers acquired and a positive trend is expected. Efficient management of Cost of Sales. Consolidated Customers, Revenues & Cost of Sales Customers, Revenue and Cost of Sales

6. Delivery of Mandate and outcomes Delivery of Mandate As at 31 March 2012As at 31 March 2013 As at 31 March 2014 Year to Date Kms of Fibre 12681km 12793km (112km added) 13 000 KM Geographic Coverage Access Points 144 152162 PoPs SADC Connectivity 4 PoPs 5 PoPs (Beitbridge PoP added) Connected all SADC neighbouring countries (Ramatlabama connected) International Access Only SADC WACS connected national terrestrial network Business Operations None Insourcing completed, OSS/ BSS designed. Implemented Phase 1 of the ERP system. User requirements specifications for Phase 2 in progress Security around 54 Mesh NoneOne (1) site secured (Athene site). Thirteen (13) sites planned for this next financial year. IP Update to date IP/MPLS on Golden Triangle No expansion - currently using Ethernet over SDH as workaround. Expansion to 3 priority provinces planned for this year (Limpopo, Mpumalanga and Eastern Cape) Slide 6

7. Broadband Infraco alignment to Broadband Policy Targets AreasOutcomeInitiatives Northern Ring Upgrade Limpopo Mpumalanga Capacity increased for 160 Gbps -> 480Gbps MTS upgrade Eastern Cape, KZN, Gauteng & Western Cape, Northern Cape From 40 Gigs to between 80 Gig – 120 Gig SADC All 6 neighbouring countries Capacity 155 Mbps – 40 Gigs Renewed 40% of obsolete transmission equipment Broadband Policy Target Broadband access in Mbps User Experience 50% at 5 Mbps 2016 8 895 kms of fibre 158 PoPs nationally R50 billion Slide 7 What has Broadband Infraco done

8. Slide 8 Transformation and Enterprise Development  Broadband Infraco runs a graduate internship programme that targets the development of scares Network Engineering skill-pool in South Africa to meet current and future industry needs.  The first intake was in January 2010, with three successful follow- up groups to date.  Of these, 6 interns have been absorbed into permanent employment.  There are currently 10 interns recruited in 2013, to complete the programme in December 2014. Young women in ICT/Engineering Enterprise & Supplier Development Spend on BWO R11.4 mil YTD Spend on BYO R1.2 mil YTD 2014 Indirect jobs created 7 YTD Basadi in Telecoms The program aims at transforming the Telecommunication Sector through the empowerment of Black Women, Youth and Small Medium and Micro Enterprises (SMME) Nationally. Date of roadshow 06 th Jun 201313 Jun 201327 th Sep 2013 Venue of Roadshow Indaba Hotel Nafcoc offices, KZN Polokwane Royal Hotel No. of delegates who attended 15347111 No. of women registered + 4001315

9. Slide 9 Strategic ObjectiveKPITarget Ensure Business Sustainability & Network Saleability (60%) Network performance rebates paid as percentage of gross revenue ≤3% Company Sustainability Cash at the end of the year≥R100 mil Measure EBIDTA based on budget ≥(116.6) mil Overall increase in capacity sold at STM-1 equivalent in the Golden Triangle, Northern Ring and other routes 10% increase (113 STM-1) Network Improvement (20%) Extend the network and enable the connection of the 2nd anchor customer (Cell C 75 services by 1 Jan 2015 Mandate Delivery Establish new open access PoPs5 PoPs by 31 December 2014 Establish a laboratory at Broadband Infraco premises Fully functional Lab by 31 March 2015 Economic Transformation (20%) Training spend as percentage of payroll3 Socio-economic transformation Increase in number of engineers in training per annum 10 Increase in number of direct jobs createdbaseline+2% (3 employees) Increase in number of indirect jobs created 10 Allocation of BBBEE budget discretionary spend70% Percentage increase on black owned entities spend40% spend of BBBEE Percentage spend of Youth Owned entities10% spend of 40% spend on BOE Percentage spend of Women Owned entities10% spend of 40% spend on BOE Amount spend on People with disabilities owned entities 300000 CSI projects completedInteractive whiteboards and internet facilities and Maths equipment Shareholder Compact 2014/15

10. Significant projects: SITA and Cell C Slide 10 SITA The State Information Technology Agency (SITA) has appointed Broadband Infraco to provision and manage 54 SITA Next Generation Network (NGN) 1GE services for a period of 10 years, commencing on the 1st of August 2014. ProvinceFibre (KM)PoP Northern Cape9.08 KM - Western Cape23.84 KM1 Eastern Cape64.68 KM - Free State9.69 KM1 North West14.47 KM - KZN32.9 KM - Gauteng73.7 KM- Limpopo13.09 KM- Mpumalanga10.55 KM- Cell-C Cell C appointed Broadband Infraco to provision 125 Broadband services for 5 years effective 1 June 2014. Broadband Infraco has to extend its existing network via fibres to Cell C and terminate it directly at the Cell C premises. ProvinceFibre (KM)PoP Northern Cape1.5 KM - Western Cape190 KM- Eastern Cape87 KM 1 Free State43 KM- North West100 KM - KZN114 KM - Gauteng174 KM1 Limpopo6 KM- Mpumalanga65 KM- Both projects: Expand the network and enable access Enable independence from Neotel Provide coverage in all 9 provinces 3 rd Party metro networks are being utilised to avoid duplications

11. Slide 11 Challenges and Mitigation  Securing funding  Autonomy of the network  Attracting critical and core skills  Role of Non ICT SOCs with ICT assets  Coordination of provincial, district, metro and municipality broadband roll out Challenges  Ongoing Engagement with the Department on funding support  Reprioritization of Capital Projects to manage cash flow: Capex revised from R529 to R386 million  Submitted R170 mil short term government guarantee application to Executive Authority  A memorandum of Investment submitted to the DBSA. This is meant to solicit a funding structure for commercially viable projects.  Broadband Infraco intends to apply for a subsidy in terms of section 88(1)(b) of the ECA Amendment Act of 2014  Develop a compelling employee value proposition  Develop a commercial model for engaging the non ICT SOC’s  Propose a framework for engaging Provincial and local government efforts Mitigations

12. Slide 12 Thank You