1. SENTECH LIMITED
2009/10 ANNUAL REPORT PRESENTATION TO THE PORTFOLIO COMMITTEE ON COMMUNICATIONS
Date: 03 November 2009

2. OVERVIEW SENTECH TEAM SENTECH MANDATE KEY STRATEGIC OBJECTIVES 2008/9
OTHER ACHIEVEMENTS: 2008/9 FINANCIAL YEAR
DIGITAL TERRESTRIAL TELEVISION (DTT)
2009 CONFEDERATIONS CUP & 2010 SOCCER WORLD CUP
CONCLUDING REMARKS BY CHAIRPERSON OF THE BOARD

3. SENTECH TEAM Chairperson: Mr. Colin Hickling
Chief Executive Officer: Dr. Sebiletso Mokone- Matabane
Chief Financial Officer: Mr. Siddique Cassim
Chief Operating Officer: Ms. Beverly Ngwenya
Executive Legal & Regulatory: Mr. Dingane Dube
Specialist Government Mr. Monde Ndleleni
Relations:

4. SENTECH MANDATE – POST ELECTRONIC COMMUNICATIONS ACT 36 OF 2005 (ECA)
The ECA amended the main object of Sentech to incorporate convergence of broadcasting and telecommunications. Accordingly, the ECA stipulates that the main object and business of Sentech “shall be to provide electronic communications services and electronic communications network services…”

5. KEY STRATEGIC OBJECTIVES 2008/9

6. KEY STRATEGIC OBJECTIVES 2008/9
STATUS AS AT 31 MARCH 2009
NETWORK PERFORMANCES:
Availability of signal distribution for TV transmission = 99.7%
Availability of signal distribution for FM radio transmission = 99.8%
Availability of VSAT network = 99.6%
Availability of Carrier of Carriers network
= 99.6%
Achieved.
DIGITAL TERRESTRIAL TELEVISION:
Digital switch on – 1 November 2008
40% population coverage by 31 March 2009.
*subject to timeous transfer of total funding requirements and publication of Digital Migration Policy.
Achieved on 30 October 2008.
Due to the delays in the finalisation of a frequency plan and DTT migration regulations, only 33% was achieved from 30 October 2008.

7. STRATEGIC OBJECTIVES 2008/9 cont.
STATUS AS AT 31 MARCH 2009
2010 FIFA WORLD CUP SOCCER:
Acquire land at NASREC to build the second teleport.
Finalise the detailed designs of the second teleport.
2009 CONFEDERATIONS CUP:
Provide satellite infrastructure to the 2009 Confederations Cup stadiums.
Secure the required satellite bandwidth.
Land at NASREC secured on lease from the Department of Public Works.
Network/technical design for the second teleport finalised. Architectural designs underway.
Achieved.
RETAIL BROADBAND:
Exit retail broadband – MyWireless and Biznet.
Implementation is still in progress. Financial write-off of assets effected in the 2008/9 Annual Financial Statements.

8. STRATEGIC OBJECTIVES 2008/9 cont.
STATUS AS AT 31 MARCH 2009
National Wireless Broadband Network (NWBN):
Approval by DoC and National Treasury of the business and funding model.
implementation of NWBN that would primarily focus on schools, hospitals, clinics, Thusong Post Offices and Government in urban, rural and under serviced areas by 31 March 2009*;
Subject to approval of business and funding model, connect 233 Dinaledi Schools.
Business and funding model submitted to the DoC and National Treasury based on funding requirement of R3.1 billion.
Dinaledi Schools: The DoC is engaging with the user-departments to finalise their requirements. This includes confirming the list of schools. Thereafter provide them to Sentech to determine the extent of the rollout that can be achieved with the R500 million.
Sentech is also looking at the feasibility of other options e.g. cost to cover one or two provinces.

9. STRATEGIC OBJECTIVES 2008/9 cont.
STATUS AS AT 31 MARCH 2009
FINANCIAL PERFORMANCE:
Loss of R59 million in 2008/2009
Financially sustainable by year 7 (2015/2016), with no dependence on the fiscus on the basis that the Consolidated Business Model (as per the Corporate Plan) is approved.
Sentech achieved an operating profit of R154 million for the year under review. See slide 25. However, major impairments contributed to a net loss of R24 million for the year.
Interest received on the various Government allocations over the past 18 months improved Sentech’s cash position significantly

10. OTHER ACHIEVEMENTS: 2008/9 FINANCIAL YEAR
Universal access to television and radio: Rolled out for SABC, 9 low power transmitter sites in the Karoo and Kgalagadi. More sites underway in 2009/10.
Commissioned 19 Community radio stations; and 1 Community TV.
Bridging the digital divide:
Mpumalanga Schools project
VSAT connections at Post Offices
Mobile Home Affairs Offices
South African Weather Services

11. DIGITAL TERRESTRIAL TELEVISION (DTT)

12. STATUS DTT PROJECT PLAN
Relative year/ Population Coverage
Annual
Capital
Expenditure
(CAPEX)
GOVERNMENT
ALLOCATION
PROJECT
STATUS
OPEX
(Dual
Illumination
costs)
OPEX)
2007 Phase 1
R 95 m
R95 m
Completed
2008 Phase 2
R 120 m
R120 m
2009 Phase 3 (47%
population coverage)
R m
R150 m
In Progress
2010 Phase 4
(63,3% population
coverage)
R m
R160 m
*(R10m)
Commenced
1 April 2009
R m
R100 m
2011 Phase 5 (75,5%
R m
R161 m
*(R11m)
R m
R110 m
2012 Phase 6
(Approx.84%
Not part of the original project plan.
R159 m
*(R9m)
R m
2013 Year 7 (92% population coverage and Digital Switch Over (DSO)
R 277 m
* Total
R 960 m
R844 M
R 918 m
R330 m
*Shortfall
R116 m
w/vat R249m
R 588 m
w/vat R734m
* Year on year inflation adjustment

13. PHASE 4 ROLLOUT TARGET
Phase 4 commenced on 1 April 2009 and will continue until 31 March The objective is to achieve 63,3% population coverage by 31 March Subject to timeous finalisation of the DTT spectrum plan and policy implementation.
An illustration of the 63.3% population coverage is shown in the next slide.

14. PHASE 4 ROLLOUT TARGET cont.

15. 2009 CONFEDERATIONS CUP AND 2010 FIFA WORLD CUP SOCCER (WCS)

16. 2009 CONFEDERATIONS CUP AND 2010 FIFA WCS
Role of Sentech is to provide backup satellite infrastructure as part of the Government Guarantees. DoC/Sentech contract regulates this relationship.
Sentech allocated R300 million in the 2008 Budget Speech. R200 million was paid over to Sentech in 2008 for CAPEX. The outstanding R100 million is for bandwidth and operational costs during the 2009 Confederations Cup and 2010 FIFA WCS.

17. 2009 CONFEDERATIONS CUP AND 2010 FIFA WCS cont.
Sentech successfully provided backup satellite infrastructure for the 2009 Confederations Cup:
(i) For the local feed (Government guarantee) availability was 100%.
Sentech, on commercial terms, provided international feed; and links between Ellis Park and STP:
(ii) For the international feed, availability was 99.99%.
For the local feed, Sentech used Intelsat IS704.
For the international feed, Sentech used Eutelsat W2A.

18. ANNUAL FINANCIAL STATEMENTS 2008/9

19. BALANCE SHEET

20. INCOME STATEMENT

21. CASH FLOW STATEMENT

22. CONCLUDING REMARKS BY THE CHAIRPERSON OF THE BOARD

23. CONCLUSION BY THE CHAIRPERSON OF THE BOARD
Broadcasting signal distribution is profitable.
Sentech looks forward to the finalisation of the national Broadband policy as well as clarification of mandates of SOE’s, government departments in the rollout of broadband and the use of spectrum for rollout to rural and underserviced areas.
The finalisation of the revised digital television broadcasting regulations and the spectrum plan will go a long way in helping Sentech to meet Cabinet’s deadline of 1 November 2011 for the switch off of analogue television transmissions.
Outside the funding requirements for our key projects, Sentech still requires capital injection from the Shareholder.

24. THANK YOU