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Vodacom Group Limited Integrated report for the year ended 31 March ’13

Technology report

1 Access2 Transmission2 Core3 Information Services

We remain committed to differentiating ourselves through sustainably providing our customers with the best network and Information Services (‘IS’) excellence which allow us to provide an unmatched customer experience at every touchpoint, and by leading in product innovation. We are committed to achieving this while at the same time finding opportunities for operational and cost efficiencies.

to be sent to a device over two frequency channels at the same time, thereby increasing the speed up to 43.2Mbps. The maximum data speeds of mobile data networks are theoretical as it depends on many factors. However, new technologies will enable an overall improved data experience. To derive the full value of newer technologies such as long-term evolution (‘LTE’), we will need additional spectrum as this will improve data speeds even further.

We are continuing with our radio access network (‘RAN’) renewal programme to add single RAN (‘SRAN’) and software defined radio (‘SDR’) technologies to our network. With SRAN we can accommodate 2G, 3G and LTE on the same base station. In combination with SDR, SRAN allows us to easily upgrade our network to newer-generation technologies such as LTE. This protects our investment and accelerates the adoption of newer-generation technologies. The RAN renewal programme also improves energy efficiency, drives down operational cost and helps us expand our data coverage.

In South Africa, our RAN renewal project is 77% complete. RAN renewal in the rest of our South African network will be completed over the next 24 months. Similarly, RAN renewal is being implemented in all International operations and Mozambique and Lesotho achieved 100% completion in the year. Tanzania will achieve 100% over the next 12 months, while the Democratic Republic of Congo (‘DRC’) will achieve 70% completion over the next 12 months.

Access The access layer is the first layer of our network that our customers connect to, whether wirelessly to a base station or physically through a fibre-optic link.

In South Africa we added

904 new 3G sitesto our network during the year

and we maintained our industry lead in the number of active 3G sites, now standing at over 6 100. More than 99.7% and 84.9% of the South African population are covered by our 2G and 3G networks, respectively. We also significantly improved our EDGE coverage during the year as we deliver on our network promise to have data wherever we have voice. We continue to focus on deploying new sites in under-serviced areas of the country and areas where our network experiences capacity constraints. In our International operations, we now have more than 1 300 3G sites deployed to further drive data penetration.

All our 3G sites in South Africa are 14.4 megabits per second (‘Mbps’) enabled and we have upgraded more than 84% of our 3G sites to support dual-carrier technology, which essentially allows data

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Technology report continued

A key accomplishment during the year was the launch of the first LTE network in South Africa in October 2012, reinforcing our position as the leading mobile operator in the country. We were able to achieve this largely due to our network having been modernised with single RAN technology over the past couple of years. We have launched LTE with circuit switched fallback (‘CSFB’) technology to support voice calls via 2G/3G on LTE handsets. We now have more than 600 active LTE sites in our network, covering over 10% of the South African population. LTE is available to both prepaid and contract customers.

TransmissionThe transmission layer connects the access, core and IS layers. This layer transports signalling, control information and customer communications across our national and International networks.

We continue to enhance our transmission network to support the RAN renewal programme. We have connected over 2 000 base stations with fibre-optic cables and more than 4 000 with high speed IP-microwave transmission.

Where it makes economic sense, we build our own transmission infrastructure. This self-provisioning is divided into three distinct projects: installing fibre or microwave transmission infrastructure at our base stations; rolling out metro core fibre which also passes near the premises of a number of corporate customers; and connecting our networks across the country through our National Long Distance fibre project, which we have built in partnership with other operators.

We are currently busy with major projects to roll out fibre networks in all our International operations. We are doing this to improve reliability and redundancy in our networks and to cater for future data demand. Fixed-line infrastructure is limited in our International operations, and in countries such as the DRC we rely on expensive satellite transmission for transport of voice and data. With a number of newly built undersea cable systems terminating in the countries we operate in, we are in a stronger position to self-provision transmission infrastructure in our International operations.

We have invested in capacity on these submarine cable systems, which will significantly increase data transmission capacity between Africa and the rest of the world and ultimately bring down the cost of carrying international data traffic and create sufficient diversity between the East and West coast. This investment will support our Network Services Africa strategy which aims to integrate Vodacom and Vodafone’s pan african network (‘PAN’) into the global Vodafone network through consolidating international capacity, internet transit, peering and Points of Presence (‘POPs’). Through this initiative, the operating companies will realise a significant reduction in operational expenditure and achieve improved availability as a result of the resilience built into the PAN, which will result in a better customer experience overall. This extended footprint will also create access to new markets for Vodacom to provide services to.

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CoreThe core network forms the central aggregation and control system of our network. It is from here that calls and data requests are directed and connected.

We continue to modernise our core network technologies across both voice and data, which will bring about greater resilience and increase core capacity five-fold while making our network simpler and getting the core network ready for working with the IP-multimedia subsystem. It will also ensure that we are ready when traditional services such as voice become fully IP-based with the introduction of Voice over LTE (‘VoLTE’), which is the next step in the evolution of our network. The core network uses specific technologies to enable fast and effective recovery of critical systems and the continuation of revenue generating services.

Our IMS platform, which is part of the primary intelligence and control system of the converged network, will allow a common set of services to be offered over any access technology, including VoLTE. With the introduction of the common subscriber database we are unifying the various disparate databases in the mobile and fixed network, essentially creating a single common entry point for subscriber data and profile repositories.

Through our next generation intelligent

network platform, One NetExpress is our first step in offeringour customers a true fixed and mobile converged product as part of our fixed and mobile convergence strategy.

With One Net Express, our customers receive a number of office phone system features on their mobile phone, allowing for increased business efficiency.

We continue to deploy new and smart core capabilities that will enable us to understand, adapt, learn and respond to our customers’ needs. To make our offerings future-fit, we are in the process of

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Vodacom Group Limited Integrated report for the year ended 31 March ’13

Technology review continued

implementing IPv6 in the national and international IP backbone. We have introduced an online charging system platform to provide greater flexibility, product support and real-time charging for our prepaid customers.

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Information ServicesThe IS domain ensures that our customers enjoy an unmatched experience while confidently connected to the most secure network. IS comprises various functions which range from enterprise IT, billing, business intelligence and customer relationship management to online portals and technology security.

Over time we have created a number of systems with different capabilities for viewing customer data. Our focus in the medium term will be to consolidate our customer-facing systems to ensure a consistent customer experience regardless of the interaction channel.

We have introduced new online capabilities that exploit interaction channels such as social media, allowing for more personal interaction with our customers. We are further enhancing our current self-service functionality with a focus on mobile self-service in the coming year through the ‘My Vodacom’ application available for download on smartphones.

We have expanded our business insight and analytics capability by introducing next best offer prediction, allowing us to analyse customer data and recommend personalised value-adding services when the customer interacts with any of our channels.

The launch of the EVO system within the enterprise IT domain has aligned Vodacom’s financial operations, supply chain management and human resources processes to those of Vodafone.

A crucial development in the year was the introduction of the

One-Time Pin,

which has dramatically reduced the incidence of fraud experienced in banking transactions by preventing SIM-swap fraud.

The number of data sources that provide information to our customer data warehouse (such as recharges, devices, upgrades and collections) has increased substantially. This means that we must work even harder to maintain the integrity of customer information. For this reason we are implementing international security best practice in all our operations. Over the last couple of months we have upgraded the local security operations centre (‘SOC’) to be of the same standard as the Vodafone Global SOC (‘GSOC’). This enabled us to bring all our International operations into our South African SOC, which forms the African hub of the GSOC.