1. 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

2. TEAM MEMBERS Chief Executive Officer: Dr. Sebiletso Mokone-Matabanedd
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

3. OVERVIEW 1. CEO Remarks Key Challenges Summarised Income Statementdd
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
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4. 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
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5. 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

6. 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

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

8. 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

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

10. SUMMARISED INCOME STATEMENTdd
SUMMARISED INCOME STATEMENT
RR/BOARD/ Annual Report 2007 FINAL 71107

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

12. CASHFLOW STATEMENT
RR/BOARD/ Annual Report 2007 FINAL 71107

13. FINANCIAL INDICATORS
RR/BOARD/ Annual Report 2007 FINAL 71107

14. 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 R
RR/BOARD/ Annual Report 2007 FINAL 71107

15. 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

16. 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

17. Building Infrastructure at IBCdd
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
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18. 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.
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19. CONCLUSION
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20. dd
Thank you
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