dd SENTECH’S PRESENTATION TO THE PORTFOLIO COMMITTEE ON COMMUNICATIONS ON ITS ANNUAL REPORT 2007 Date: 7 November 2007 RR/BOARD/ Annual Report 2007 FINAL 71107

TEAM MEMBERS Chief Executive Officer: Dr. Sebiletso Mokone-Matabane dd TEAM MEMBERS Chief Executive Officer: Dr. Sebiletso Mokone-Matabane Chief Financial Officer: Mr. Mohammed Siddique Cassim Chief Operating Officer: Ms. Beverly Ngwenya Executive Reg & Gov Affairs: Mr. Dingane Dube RR/BOARD/ Annual Report 2007 FINAL 71107

OVERVIEW 1. CEO Remarks Key Challenges Summarised Income Statement dd OVERVIEW 1. CEO Remarks Key Challenges Summarised Income Statement Operating loss adjusted for non-operating items Cashflow statement Financial indicators Digital Terrestrial Television (DTT) Broadband Wireless 2010 FIFA World Cup Submarine Cable Conclusion RR/BOARD/ Annual Report 2007 FINAL 71107

dd CEO REMARKS Improved financial position: Losses reduced to R21,530million compared to R76,419million in 2005/2006 Cash flow improved year on year due to DTT Government grant; cost cutting and improved processes for long outstanding accounts receivable RR/BOARD/ Annual Report 2007 FINAL 71107

CEO REMARKS Bridging the digital divide – Projects: 103 Home Affairs mobile units South African weather service warnings powered by Sentech Mindset Health and Education Perinatal HIV Research Unit at Chris Hani Baragwanath Hospital Mpumalanga Schools Sci-Bono, the largest science museum in the Southern Hemisphere Dipalo, A computer literacy and hardware training institute based in Soweto RR/BOARD/ Annual Report 2007 FINAL 71107

CEO REMARKS Sentech has been a catalyst in reducing the costs of communication: Sentech launched MyWireless flexi products, starting at R99 a month. Other operators followed to reduce the cost of broadband offerings. RR/BOARD/ Annual Report 2007 FINAL 71107

KEY CHALLENGES Funding For current business and future growth. RR/BOARD/ Annual Report 2007 FINAL 71107

KEY CHALLENGES Laws & Regulations: Reclassification from schedule 3B to 2 of PFMA Conversion of licences in terms of the Electronic Communications Act Allocation of frequency spectrum for DTT RR/BOARD/ Annual Report 2007 FINAL 71107

KEY CHALLENGES Skills: Skills retention remains a challenge Sentech continues to invest in staff training RR/BOARD/ Annual Report 2007 FINAL 71107

SUMMARISED INCOME STATEMENT dd SUMMARISED INCOME STATEMENT RR/BOARD/ Annual Report 2007 FINAL 71107

OPERATING LOSS ADJUSTED FOR NON-OPERATING ITEMS RR/BOARD/ Annual Report 2007 FINAL 71107

CASHFLOW STATEMENT RR/BOARD/ Annual Report 2007 FINAL 71107

FINANCIAL INDICATORS RR/BOARD/ Annual Report 2007 FINAL 71107

DIGITAL TERRESTRIAL TELEVISION (DTT) Year Task Funding Requirement Budget Allocation Status Opex* Dual illumination shortfall Year 1 2006/2007 Preparation (mainly infrastructure) R95 million R95million Spent Year 2 2007/2008 Preparation (maily infrastructure) Satellite distribution systems Gauteng DTT coverage R120million In progress Year 3 2008/2009 Metropolitan areas to achieve approximately 56% of total population terrestrial coverage R262.7million R115million Start:01/04/08 Shortfall of R147.7million R152milion Year 4 2009/2010 Most dense areas in the country to achieve approximately 80% of total population terestrial coverage R231.4million R75million Start: 01/04/09 Shortfall of R156.4 million R225million Year 5 2010/2011 Balance of areas to achieve approximately 92% coverage of total population terrestrial coverage (current SABC 2 coverage) R250.9million R264million Year 6 Analogue termination November 2011 R277million Total R960million R405million R918 000 RR/BOARD/ Annual Report 2007 FINAL 71107

BROADBAND WIRELESS Year Funding Requirement Budget Allocation Year 1 2007/2008 R912million R500million Year 2 2008/2009 R666million - Year 3 2009/2010 R1077million Year 4 2010/2011 R297million Year 5 R173million Total R3,125billion RR/BOARD/ Annual Report 2007 FINAL 71107

BROADBAND WIRELESS Rand Annual Cash flow Cash flow Cash flow trend 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total estimated cost of NWBN is some R4.5 billion of which Government is only requested to finance R3.1 billion, the balance (R1.4 billion) from internal cash flow of the project RR/BOARD/ Annual Report 2007 FINAL 71107

Building Infrastructure at IBC dd 2010 FIFA WORLD CUP CAPEX Funding Requirements Building Infrastructure at IBC R19,0million Satellite feeds (stadiums to IBC, IBC International fixed uplink) R78,7million Linking STP - IBC R34,0million OPEX R64,8million TOTAL R196,5million RR/BOARD/ Annual Report 2007 FINAL 71107

dd SUBMARINE CABLE Government allocated R21million for Sentech to participate in a submarine cable. Sentech is currently participating in sector discussions led by the Department of Communications. RR/BOARD/ Annual Report 2007 FINAL 71107

CONCLUSION RR/BOARD/ Annual Report 2007 FINAL 71107

dd Thank you RR/BOARD/ Annual Report 2007 FINAL 71107