SENTECH LIMITED 200910 ANNUAL REPORT PRESENTATION TO THE

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

OVERVIEW 1. SENTECH TEAM 2. SENTECH MANDATE 3. KEY STRATEGIC OBJECTIVES 2008/9 4. OTHER ACHIEVEMENTS: 2008/9 FINANCIAL YEAR 5. DIGITAL TERRESTRIAL TELEVISION (DTT) 6. 2009 CONFEDERATIONS CUP & 2010 SOCCER WORLD CUP 7. CONCLUDING REMARKS BY CHAIRPERSON OF THE BOARD 2

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 Relations: Mr. Monde Ndleleni 3

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…” 4

KEY STRATEGIC OBJECTIVES 2008/9 5

KEY STRATEGIC OBJECTIVES 2008/9 OBJECTIVES 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 Carriers network = 99. 6% Achieved. DIGITAL TERRESTRIAL TELEVISION: • Achieved on 30 October 2008. • Digital switch on – 1 November 2008 • Due to the delays in the finalisation • 40% population coverage by 31 March of a frequency plan and DTT 2009. migration regulations, only 33% *subject to timeous transfer of total was achieved from 30 October funding requirements and publication of 2008. Digital Migration Policy. 6

STRATEGIC OBJECTIVES 2008/9 cont. OBJECTIVES 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. RETAIL BROADBAND: • Exit retail broadband – My. Wireless and Biznet. 7 • Land at NASREC secured on lease from the Department of Public Works. • Network/technical design for the second teleport finalised. Architectural designs underway. Achieved. Implementation is still in progress. Financial write-off of assets effected in the 2008/9 Annual Financial Statements.

STRATEGIC OBJECTIVES 2008/9 cont. OBJECTIVES STATUS AS AT 31 MARCH 2009 National Wireless Broadband Network • Business and funding model (NWBN): submitted to the Do. C and National • Approval by Do. C and National Treasury of Treasury based on funding the business and funding model. requirement of R 3. 1 billion. • implementation of NWBN that would • Dinaledi Schools: The Do. C is primarily focus on schools, hospitals, clinics, engaging with the user-departments Thusong Post Offices and Government in to finalise their requirements. This urban, rural and under serviced areas by 31 includes confirming the list of March 2009*; schools. Thereafter provide them to • Subject to approval of business and funding Sentech to determine the extent of model, connect 233 Dinaledi Schools. the rollout that can be achieved with the R 500 million. • Sentech is also looking at the feasibility of other options e. g. cost to cover one or two provinces. 8

STRATEGIC OBJECTIVES 2008/9 cont. OBJECTIVES STATUS AS AT 31 MARCH 2009 FINANCIAL PERFORMANCE: • Loss of R 59 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 R 154 million for the year under review. See slide 25. However, major impairments contributed to a net loss of R 24 million for the year. 9 Interest received on the various Government allocations over the past 18 months improved Sentech’s cash position significantly

OTHER ACHIEVEMENTS: 2008/9 FINANCIAL YEAR • • • i. iii. iv. 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 10

DIGITAL TERRESTRIAL TELEVISION (DTT) 11

STATUS DTT PROJECT PLAN Relative year/ Population Coverage 2007 Phase 1 Annual Capital Expenditure (CAPEX) R 95 m 2008 Phase 2 R 120 m 2009 Phase 3 (47% population coverage) R 262. 6 m 2010 Phase 4 (63, 3% population coverage) R 231. 4 m 2011 Phase 5 (75, 5% population coverage) R 250. 9 m 2012 Phase 6 (Approx. 84% population coverage) Not part of the original project plan. 2013 Year 7 (92% population coverage and Digital Switch Over (DSO) Not part of the original project plan. * Total R 960 m *Shortfall GOVERNMENT ALLOCATION (CAPEX) PROJECT STATUS OPEX (Dual Illumination costs) GOVERNMENT ALLOCATION (Dual Illumination OPEX) Completed R 95 m R 120 m Completed R 150 m In Progress R 160 m *(R 10 m) Commenced 1 April 2009 R 161 m *(R 11 m) R 159 m *(R 9 m) R 100 m R 152. 1 m R 110 m R 224. 8 m R 120 m R 263. 8 m R 277 m R 844 M R 116 m w/vat R 249 m * Year on year inflation adjustment 12 R 918 m R 330 m R 588 m w/vat R 734 m

PHASE 4 ROLLOUT TARGET - Phase 4 commenced on 1 April 2009 and will continue until 31 March 2010. The objective is to achieve 63, 3% population coverage by 31 March 2010. 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. 13

PHASE 4 ROLLOUT TARGET cont. 14

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

2009 CONFEDERATIONS CUP AND 2010 FIFA WCS - Role of Sentech is to provide backup satellite infrastructure as part of the Government Guarantees. Do. C/Sentech contract regulates this relationship. - Sentech allocated R 300 million in the 2008 Budget Speech. R 200 million was paid over to Sentech in 2008 for CAPEX. The outstanding R 100 million is for bandwidth and operational costs during the 2009 Confederations Cup and 2010 FIFA WCS. 16

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 IS 704. - For the international feed, Sentech used Eutelsat W 2 A. 17

ANNUAL FINANCIAL STATEMENTS 2008/9 18

BALANCE SHEET 19

INCOME STATEMENT 20

CASH FLOW STATEMENT 21

CONCLUDING REMARKS BY THE CHAIRPERSON OF THE 22

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 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. 23

THANK YOU 24