Sentech Presentation to the Portfolio Committee on Communications

2 November 2004

Sentech team

• Dr Sebiletso Mokone-Matabane• Gladwin Marumo• AK Mohamed• Johan Raath• Dingane Dube• Matime Nchabaleng• Thabo Komane• Marc D’Oliveira

Sentech Highlights

• Broadcasting• International Business• Multimedia

Spreading the footprint

• Sentech’s broadcasting signal distribution network remains a valuable national asset

• Very high service levels• 5 new television transmitters (SABC 1 & 2)

– Cala 4 April 03– Tolwe 16 May 03– Straalhoek 25 May 03– Hectorspruit 26 March 04– Sterkspruit 26 March 04

• Sentech installs transmitters on customer request.

Regional Broadcasting

• Sentech ready to support regional television

Towards digitisation

• Test television transmissions in Johannesburg successful

• Test radio transmission in Pretoria successful• Plans ready (spectrum utilisation)• Multiple sources for decoders (set-top-boxes)

achieved.• Local manufacture of set top boxes

– UEC already locally manufactured– Korean manufacturer ready to start a factory here.

• South Africa will pay the best possible prices for the units.

International business objectives achieved

• Carrying international traffic for the mobile operators– Low margin, high volume business

• Developing business relationships in a number of African countries– Loveworld and Spirit Word African channels to over 500,000

viewers

– 94 TV Transmitters installed for Nigerian Television Authority

• NEPAD– NEPAD channel operational

– Trained broadcasting technicians and engineers from Botswana, Kenya, Lesotho, Namibia, Nigeria, Swaziland and Tanzania

• Taking active role in East African Submarine Cable initiative

Multimedia business objectives achieved

• My Wireless launched in three regions• Connectivity partner for Gauteng OnLine• Increased teleradiology connectivity for

Eastern Cape• First phase of MyWireless completed

– Deployment of a leading-edge technology– Ongoing system and network improvements

Multimedia milestones

• Gauteng OnLine– Phase 1/2 1100 schools– Computer laboratory per school– Sentech is connectivity provider as well as long-

term strategic partner– Sentech provides email addresses to each

learner

• Sentech committed to ensuring that every Province is able to bridge the digital divide

Multimedia milestones

• Teleradiology successes still continuing• Sentech provides the connectivity between the

radiologists in the Clinix hospital in Dobsonville and the following hospitals in the Eastern Cape– Frontier– SS Guido– Cecile Makiwane– Keiskamma

• Patients Xrays diagnosed in real-time• Sentech ready to increase the coverage at the

request of the Provincial DOH’s.

Multimedia Milestones

• Sentech is the primary connectivity provider for Mindset– Carrying educational content to teachers and learners– Strategic relationship will continue as part of Sentech’s

commitment to being the delivery partner for education

• Sentech is the primary connectivity provider for Mindset for health– Sentech provides the delivery mechanisms for the health

channel

Multimedia Milestones

• Working with the USA to bridge the digital divide at schools and through community centres

• Still providing the fastest Email in Gauteng to Siyabonga telecentre in Orange Farm

The year ahead

• Grow the Multimedia business• Prepare the company for digitisation• Enhance broadcasting• Continue as the State’s delivery partner

– Education, Health and e-Government

IP Decoder

3G modem

3G Mobile

VSAT

Other Pt to M-Pt

Applications Access

DVB Decoder / DAB Decoder

DVB PCI Card

Video / Audio &Enhanced Services

Video &IP Streaming

GSM & DVB-H / DAB

Video & Audiostreaming

Video & Audiostreaming

High SpeedInternet

Internet & VoIP

Internet

TV & RadioDistribution

VoIP(voice)

Gateway

Video Backhaul

Multicast IP

Content Streaming

Application Services

DVB Platform

TDMA / Docsis

High SpeedInternet

WiFI High Speed Internet

High SpeedInternet

Sentech Core Networks

NSN Core

Sentech’s Integrated PlatformTransport

Sentech and Convergence

• Sentech welcomes the Ministers determination of 3 September 2004– Some changes to Act required to turn restrictions into

enablers.– VANS should not provide own facilities or provide switched

voice (total deregulation)– Review Sentech licence conditions– Review position of PTN’s eg SITA

• Sentech is the first fully converged communication company in South Africa

• Sentech needs unrestricted voice.• Sentech will be seamlessly carrying and integrating

voice, data, image and delivering solutions to South Africa

Job Creation and Poverty Alleviation

• Sentech has fully restructured to embrace a converged future– Training– Re-skilling– Recruiting

• Sentech is not retrenching to reskill– Building the skills of our people– Employment equity focus

• Sentech School of Technology– Building Sentech skills– Building Africa’s skills

ISSET-SETA

• Signed agreement with ISSET-SETA• 48 learners to start January 2005• 85% African/Coloured/Indian• 60% Female• 4% People with disabilities

My Wireless brings Real Empowerment Opportunities.

• Network roll-out– Site acquisition– Site/network build– BEE paramount– Job creation

The Marketing Empowerment Opportunities

• Sentech expects to directly sell about 20% of services

• 80% will be through channel partners– Value Added Partners– Solution partners– Value Added Resellers

• Major BEE opportunities– Already involved with BEE companies– Lasting and significant job creation in ICT– Grow the cake through empowerment

Cash Flows for the 2004 Financial Year

• Cash utilised in operation -R 20 Mil– Cash generated by operations R34 Mil– Net finance costs -R54 Mil

• Cash utilised in investing activities -R148 Mil– Assets acquired -R94 Mil– Intangible asset acquired -R50 Mil

• Cash generated from financing activities R156 Mil– Interest bearing borrowings R106 Mil– Non interest bearing borrowings R 50 Mil

• Net cash movement -R 12 Mil

Financial highlights

Financial results R mil

-100-100200300400500600

Revenue Gross profit Operating profit Profit aftertaxation

1999 2001 2002 2003 2004

Thank you