1. Do not delete. To restore built-in colour schemes, open Title Master, double click these symbols and set as default. Electronic Communications Amendment Bill (B38 – 2007) As published in Government Gazette No. 30307 of 17 September 2007 Public Hearings on the Electronic Communications Amendment Bill [B38-2007] Presentation to the Portfolio Committee on Communications Committee 31 October 2007

2. Slide 2 Telkom Team Ms Mpumie Plaatjie, Senior Specialist: Stakeholder Management Dr. Andrew Barendse, Executive: Regulatory Strategy & Management Mr Graham Keet, Senior Specialist: Regulatory Compliance Mr Thando Lubanga, Senior Legal Advisor

3. Slide 3 Background SA telecom sector undergoing period of rapid change in terms of: –Licence conversion process –Market reviews –Africa’s satellite, terrestrial and undersea connectivity Bill makes provision for government to intervene on ICT infrastructure investments. The implications of these issues could alter network infrastructure and service provisioning in South Africa. Draft Broadband Infraco & ECA Amendment bills: –Telkom provided written and oral inputs to both processes. –Telkom noted objectives and expressed concerns on certain matters.

4. Slide 4 Summary of Telkom’s key arguments Distinction of roles between policy formulation and regulation (s2j of ECA). Align licensing of SOE’s with the licensing and regulatory framework set out in the ECA and as administered by ICASA. Subject such licensees to the same terms and conditions as all other licensees, as prescribed by the ICASA. Specific comments on the bill: –ECNS vs. ECS licenses –Licensing framework

5. Slide 5 The separate roles of the Minister and the Authority Section 2(j) of the ECA provides that: “The primary object of this Act is to provide for the regulation of electronic communications in the Republic in the public interest and for that purpose to provide a clear allocation of roles and assignment of tasks between policy formulation and regulation within the ICT sector” Any amendment to the ECA should reflect this separation of functions Not appropriate for Government to both set Policy Directions and determine the framework (e.g. the licence terms and conditions) Any Ministerial framework for licensing public entities should be aligned with the new ECA licensing framework being developed by the Authority

6. Slide 6 The licensing process should be clear for all licensees In terms of the ECA the Authority has been mandated to deal with licensing matters According to the existing ECA process, the Minister may issue the Authority with a Policy Direction to licence a new ECNSL (s5(6)), after which the Authority issues an ITA in the Gazette (s9(2)) Any party may bid on the invitation (an open process) It is not clear whether a different process is envisaged for public entities in terms of the Bill, and if so, how such a process will differ from the process provided in the ECA

7. Do not delete. To restore built-in colour schemes, open Title Master, double click these symbols and set as default. SPECIFIC COMMENTS ON THE BILL

8. Slide 8 Addition of s5(13)(a): Initiate and facilitate intervention by Government to ensure strategic ICT infrastructure investment Section 3(3) provides that any policy or policy direction on licensing must be permissible in term of the ECA Section 3(5) provides for consultation with Authority and a public process Telkom assumes that the Bill contemplates licensing of individual ECNSL only (i.e. infrastructure-based licensees) for the provision of infrastructure at wholesale rates to other operators, as indicated in the Memorandum on the Objects of the EC Amendment Bill (in GG30307) (“the Memorandum”) Telkom notes that the Memorandum contemplates the licensing of municipalities, presumably as ECNSLs. Such licensees should be subject to the same terms and conditions as all other ECNSLs, as prescribed by the Authority.

9. Slide 9 Addition of s5(13)(b): Provide for a framework for the licensing of a public entity by the Authority S8(1) of the ECA provides that the Authority must prescribe terms and conditions for all licensees A public process, launched by the Authority in terms of the ECA, to determine both standard and specific terms and conditions for all licensees has reached an advanced stage Any Ministerial framework should be aligned with the final framework applicable to other licensees Non-public entity licensees should not be prejudiced by any Ministerial framework, as could occur if, for example, public entities had more favourable licence fee structures, or less onerous obligations Once again, public entity licensees should be subject to the same terms and conditions as all other licensees

10. Do not delete. To restore built-in colour schemes, open Title Master, double click these symbols and set as default. CONCLUSION

11. Slide 11 Telkom notes the intention by government to intervene on infrastructure investments and trusts that the investments will achieve the goals set for it by Government. Telkom emphasizes that the above can be accomplished if the licensing of SOE’s through this Bill is properly aligned with the licensing and regulatory framework set out in the ECA and as administered by ICASA. Telkom believes that if transparent and due process is followed in the creation, licensing and regulating of SOE’s, it will greatly assist in the creation of a climate of investor confidence and certainty in the communications industry.

12. Slide 12 Questions and Comments THANK YOU