1. The SA mobile market today
“A new chapter in the growth story”
Robert Pasley
Director Corporate Strategy
Vodacom Group (Pty) Ltd

2. A new chapter of growth 1. Review of the mobile market today
2. Recent new trends in growth
3. Future subscriber growth in South Africa
4. Key drivers of growth

3. Future plans, strategies and views of the future from the operators pending liberalisation and open competition
Mobile market ‘liberalised’ in 1994
Competition from the launch of the networks
Additional competition from November 2001
No further liberalisation pending

4. A new chapter of growth 1. Review of the mobile market today
2. Recent new trends in growth
3. Future subscriber growth in South Africa
4. Key drivers of growth

5. Setting the stage 3 national operators Competition fuelling growth
12 million subscribers
28% penetration of total population
Maturing market - highly sophisticated
Recognisable leading consumer brands - innovation and leading products

6. A new chapter of growth 1. Review of the mobile market today
2. Recent new trends in growth
3. Future subscriber growth in South Africa
4. Key drivers of growth

7. Recent trends - a new chapter of growth
Stabilising ARPUS
Increasing levels of usage (MoU) - key tariff segments
User acceptance of data - SMS providing the stimulus
Alternative avenues for revenue growth - holds promise
Continued fixed line substitution
Mobile data applications - GPRS platform
Access share of corporate ICT spend
The mobile office - SOHO and SMME

8. A new chapter of growth 1. Review of the mobile market today
2. Recent new trends in growth
3. Future subscriber growth in South Africa
4. Key drivers of growth

9. The importance of subscriber numbers
Access
Universal and affordable provision
Wide range of services for economic growth
Progress towards universal provision
Economic growth
Industry growth

10. SA subscriber forecasts to 2008
Vodacom’s
SA Mobile forecast,
incl. AIDS effect
2008: 19 million 2 4 6 8 10 12 14 16 18 20
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Actual
Vodacom
MTN
Analyst
Actual:
September 02: 12 million
Analyst
2008: 16,8million
MTN’s
2008: 14,5 million
Actual:
March 02: 10.8 million

11. Vodacom’s subscriber forecasts models
Driven by affordability studies
Not only conventional LSM analysis
Across individual income segments
Determines penetration levels / income segments
Benchmarked against other market’s penetration levels:
GDP / capita and Gini coefficients adjustments
Relatively accurate

12. 19 million subscribers by 2008
SA Subscriber saturation expected at around 19m Subs in March 2008
Penetration = 39,2% of total SA population.
SA CELLULAR PENETRATION / INCOME GROUP
Reported Base
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
R1-R499
R500-R599
R600-R999
R1000-R1399
R1400-R1999
R2000-R2999
R3000-R4999
R5000-R7999
R8000-R11999
R12000-R19999
R20000+
Unemployed
Housewives
Students
Rich Kids
yrs
Percentage penetration
Graph meant to be overwhelming to prove detailed analysis behind subscriber forecast of previous slide
Base case assumptions:
Total population growing at 2.15% to around 50 million, 16+ = 32 million (No major impact from AIDS)
We assume sustainable GDP growth of around 3% and successful redistribution programs will support a higher population growth rate in lower LSM groups and a large youth base will enter the work-force.
Assumption is that housewives, students, 10 to 16 year-olds and retired people of the R population will be cross-subsidised
The current penetration of 66.4% for First World component (taken as people earning more than R3000) compares well with the average penetration of 68% in Europe
The maximum penetration rate in 2007 is assumed to be 80% for all income groups over R1000, 28 % of unemployed (including a component of the informal sector) and 24% of people earning less than R500.

13. Stabilising voice ARPUs
358
394
182
208
266
179
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
1998
1999
2000
2001
2002
Sept 50
100
150
200
250
300
350
400
Subscribers
ARPU

14. Increasing MoU across key tariff packages40 90
140
190
240
290
340
390
440
Apr-99
Jul-99
Oct-99
Jan-00
Apr-00
Jul-00
Oct-00
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
AMOU
Contract
Prepaid
Total
Aug-02
Sep-02

15. A new chapter of growth 1. Review of the mobile market today
2. Recent new trends in growth
3. Future subscriber growth in South Africa
4. Key drivers of growth

16. SMS activity - a taste of things to come25 50 75
100
125
150
175
200
225
250
275
300
Million SMS's per Month
Jan-00
Mar-00
May-00
Jul-00
Sep-00
Nov-00
Jan-01
Mar-01
May-01
Jul-01
Sep-01
Nov-01
Jan-02
Jul-02
In excess of 300% increase
since end 2000

17. Technology overview - ready for launch
GSM Technology Mature and Reliable
Low cost operation
MMS messaging set to take off by 2003
Satisfy both:
Consumer Services & Entertainment demand
Corporate Services and Niche markets

18. A new chapter of growth Conclusion Subscriber growth at stable ARPU
“Democratise Telecommunications”
New opportunities for growth:
SMS
MMS
Entertainment / Information services
Corporate data services

19. THANK YOU