Presentation to Portfolio Committee on Communications on SAPO`s State of Readiness on the Digital Migration Project

Agenda SAPO TEAM Mr George Mothema Chairperson Mr Christopher HlekaneGroup Chief Executive Officer Ms Marietjie LancasterGroup Executive Strategy & Chief Information Officer (Acting)

Agenda DTT PROJECT MAP DTT Regulations BDM Policy Frequency Plan Channel Licensing Radio Stations TV Channels Service Information for EPG Interactive Content Playout Coding and Multiplexing Contribution Linking Transmitter Network STB Control System DVB-T2 Standard Approval Revise MHEG Profile EPG User Interface Revise STB Standard for DVB-T2 Manufacture STBs Conformance Testing Trademark Certification Wholesale Distribution STB subsidy Consumer Messaging Marketing Channels Retail FTA Platform Brand Installations On-ground support Go-Live Award STB RFP Platform Management DoC Direct All Broadcasters FTA Broadcasters SENTECH USAASA SAPO STB Manufacturers ICASA SABS CPE Installers Retailers All Customer Contracts Acknowledgement: SABC

Agenda SAPO ACTIVITIES DTT Regulations BDM Policy Frequency Plan Channel Licensing Radio Stations TV Channels Service Information for EPG Interactive Content Playout Coding and Multiplexing Contribution Linking Transmitter Network STB Control System DVB-T2 Standard Approval Revise MHEG Profile EPG User Interface Revise STB Standard for DVB-T2 Manufacture STBs Conformance Testing Trademark Certification Wholesale Distribution STB subsidy Consumer Messaging Marketing Channels Retail FTA Platform Brand Installations On-ground support Go-Live Award STB RFP Platform Management DoC Direct USAASA SAPO STB Manufacturers CPE Installers Customer Contracts Acknowledgement: SABC

Agenda Background As part of the Broadcasting Digital Migration (“BDM”) Programme, the Universal Service Access Agency (USAASA) is required to manage the disbursement of set-top boxes (STB`s and /or decoders) Subsidies to needy TV-owning households. To ensure that these subsidies are adequately distributed, USAASA needs to put in place infrastructure, systems and processes to manage the subsidy distribution process. The project aims to identify and develop various enabling infrastructure, processes and systems that will be used for the eventual roll-out of the subsidized STB`s to the needy households. SAPO has been appointed by the Department of Communications (DOC) and USAASA to assist with the distribution, delivery and installation process of the STB`s to get the signal to the needy households. The introduction meeting took place on Senior Executive level by SAPO with the DOC and USAASA on 17 January Follow-up workshops with the focus to determine the qualification criteria and finalise the distribution process flow have been ongoing since February 2012 and are in the process of being completed

Agenda Background The following projected numbers and dates were indicated for the planned STB rollout by the DOC/USAASA during the meetings held to date: 1.Projected number of needy households: The following two types of decoders will be installed: 2.1 DTT decoder with standard grid antenna – Projected number 3.5m 2.2 DTH decoder with satellite dish – Projected number 1,5m 3.The rollout will take place in a phased-in manner per Province and SAPO will prepare its distribution plan accordingly.

Agenda A high level process flow working document for the Set-Top -box distribution has been designed covering the following broad areas: 1.Qualification criteria 2.Business rules 3.Television licence requirements 4.Application process 5.Communication and Marketing 6.Voucher/payment 7.Distribution 8.Delivery 9.Installation and support services 10.Exchange/replacement of faulty equipment Background

Agenda Main obligations in MOU Against the back ground of the discussions held on the high level process flow document, the parties agreed in principle that the main obligations of the DOC/USAASA and the Post Office will be the following, which have been included in the MOU: 1. The Doc shall in conjunction with USAASA- 1.1 finalize the qualification criteria and business rules for the rendering of the Services by the Post Office as part of the Service Level Agreement; 1.2 ensure that all materials and services relevant to the STB will be provided to the Post Office on consignment in line with the terms and conditions to be agreed to in the Service Level Agreement; and 1.3 Be responsible to pay to the Post Office the agreed remuneration for the rendering of the Services.

Agenda 2. The Post Office shall subject to the development of the required system changes, interfaces, databases and final business rules being agreed to by the Parties:- 2.1 capture and process applications for the registration phase; 2.2 set-up and manage the qualification criteria database; 2.3 facilitate the distribution, voucher/payment and delivery process of the STB and standard antenna/satellite dish; 2.4 facilitate the following with regard to the Installation and Support Services: Application process Set-up and management of the installation service database Notification to the registered Installer to go and complete the installation Payment of installation fees on receipt of the signed-off and verified Installation voucher; Exchange/replace faulty decoders Main obligations in MOU, continue

Agenda 2.5 Submit daily the applicable data and payment files to the SABC and/ USAASA, respectively; 2.6 Transfer daily and electronically funds collected on behalf of the DOC into a specified bank account within an agreed period. The MOU was signed-off on 26 July An SLA with final commercial details based on the agreed upon processes will be completed by the respective parties Main obligations in MOU, continue

Agenda After the sign-off of the MOU, the SAPO Business Rules workshop was held with the DOC, USAASA and SABC to discuss and formulate the SAPO Business Rules working document for the Set-Top -box project covering the following areas in detail:  Set-up of qualification data base on behalf of USAASA  Mapping of SAPO branch network with Radio stations, satellite areas, type of signal and location of needy households per municipality area to determine the number of needy households, number and type of STB`s and marketing material to be distributed per post office outlet  Design registration application and Installation voucher form required for application and installation process (Fica on addresses- final criteria to apply)  Order and distribution process for STB boxes and related equipment (Warehousing and distribution to SAPO outlets, etc.)  Communication and marketing of the STB Box campaign (Co-branding and display of marketing material at SAPO branches, etc.)  Processing application form for STB boxes in accordance with qualification criteria  Payments and issuing of STB box to qualifying applicants  Set-up of Installer database on behalf of USAASA  Notification process to Installers to arrange for installation of STB boxes  Verification of installations via Installation voucher  Payment of installation fees to Installers  Replacement/exchange of equipment  Daily processing of data and payment files for transmission to USAASA and SABC, respectively.  Transfer of collected funds to USAASA and SABC. The Process Flow Document was updated and aligned with the outcome of the discussions held at the SAPO Business Rules workshop. SAPO Business Rules

Agenda SABC Television licence requirements The SABC informed the Post Office that the following Television Licence requirements will apply for the needy house holds:  When taking out a licence for the first time, the full annual tariff is payable (i.e. R250.00).  Where a person qualify for a concessionary TV licence, the current license fee is payable. In accordance with the TV Licence Regulations, the following persons will qualify for a concessionary TV licence: A receiver of a social grant from the State, on the basis of being an aged or disabled person as defined in the Social Assistance Act of 1992; A person of 70 years or older, as from the beginning of the first licence year after turning 70, provided that such person does not share residential premises with anyone (other than a spouse or life partner) who is younger than 70 and who is not a family member of the holder of a domestic licence.  In order to apply for a concessionary TV licence the person will have to apply to the SABC for such licence.  The current process for the payment of a TV licence on a monthly instalment basis. SAPO currently provides for the processing of normal TV licenses (i.e. applications and renewals) as well as for the renewal of existing concessionary TV licenses through its normal 3 rd Party Payment system at SAPO outlets. SAPO will charge the SABC for the issuing of new TV licence applications and payments in accordance with the standing SLA.

Agenda Status on implementation process Item noTaskStart dateCompletion date% CompletionComments 1 Engagement meetings held between DOC and SAPO on Senior Executive level17-Jan-1210-Feb-12100% 2 Scheduling of SAPO Process Flow workshop for DTT-Project2-Mar % 3 Presentation to SAPO EXCO2-May-127-May-12100% 4 Presentation to SAPO BOARD28-May-1231-May-12100% 3 Finalisation and sign-off of NDA23-Apr-1231-Jul-12100% 4 Finalisation and sign-off of MOU23-Apr-1231-Jul-12100% 5 Scheduling SAPO Business Rules workshop3-Aug % 6 Finalization and approval of Limited Bid document for design, printing and packaging of application and installation voucher form3-Aug-1231-Aug-1298% 7 Finalisation and sign-off of Business Rules3-Aug-12TBA80% Finalisation of outstanding issues 8 Finalisation of SAPO Governance documentation (Project scope, charter, project plan and schedule)3-Aug-1231 Oct 1290% 9 Finalisation and sign-off of SLA3-Aug-1230 Nov-1260% 10 Finalize mapping of DTT rollout plan per municipality, signal station and satellite areas per SAPO branch to determine number of needy households per branch3-Aug-12TBA50% Dependent on statistics from USAASA 11 Finalize mapping of SAPO outlets to DTT signal and satellite radio stations and satellite areas to link and determine type of application form and equipment to/for SAPO branches3-Aug-12TBA80% Dependent on Roll Out Plan from Sentech 12 Finalisation of all marketing related issues (Application and installation voucher forms, display materials, branding, etc)10-Sept-12TBA10% Qualifying criteria to be gazetted & finalised 13 Finalisation of all distribution relates issues (Equipment, packaging, ordering, warehousing, etc)12-Sept-12TBA60% Dependent on STB Tender finalisation 14 IT Development (Design, development and testing)30-Oct-12TBA15%Change in Business Rules 15 Training25-Sep-12TBA25% 16 Implementation5-Nov-12TBA0% Finalisation of outstanding issues

Agenda