If One Had to Accompany Mark Shuttleworth Africa and Look Down at Africa at Night It Is

FUTURE PLANS & STRATEGIES OF SENTECH AS THE FIRST COMPETITIVE ENTRANT IN THE LIBERALISED TELECOMMUNICATIONS MARKET IN SOUTH AFRICA

Dr Sebiletso Mokone –Matabane,

Chief Executive Officer, Sentech

INTRODUCTION

Friends, distinguished guests, colleagues, ladies and gentlemen, it is indeed an honour to share views with you on this very important part of the Tel.com conference deliberations.

For Africans the last century was characterised by strife and trials. For good reasons, we found ourselves more involved with issues of liberation and self-determination to the extent that we missed the industrial revolution. So we became consumers rather than developers of products. To a large extent this situation still prevails today.

We now stand at the ‘toddler stage’ of the information age. It is an era of great opportunities for the continent. In the main, Africa’s resurgence will be defined by its participation in the Information Communication Technologies. I have no doubt that we will be victorious. We need to note, however, that we are faced with serious competing challenges. We require extensive skills and experience yet we have a mostly young population. We are nurturing talents that may not rise and bloom because of the death and doom that Aids is bringing. We have to grow the economy and make profits whilst we develop our cities and rural areas.

As Sentech, it is symbolic that I stand before this forum exactly six months after a significant step in the managed liberalisation of the telecommunications market in South Africa. By awarding these new licenses government has placed convergence at the centre of developments in the ICT sector in South Africa. In essence, to ensure that the peoples of southern Africa benefit from the advent of new technologies and services.

Sentech is enthused and excited about the challenges presented by its recent licenses. I am certain that we will meet the challenge. Sentech has achieved its credibility through the richness and depth of experience as the largest broadcast signal distributor in Africa, and also one of the largest in the world. In South Africa it is the signal distributor delivering nearly all of the broadcast services to the nation. This is achieved through its extensive terrestrial network of transmitter sites and the largest satellite broadcast facility in Africa. Sentech, through its subsidiary Infosat, has the most advanced satellite-based data-communications and data-casting service in Africa. As a good corporate citizen Sentech is involved in various social programmes such as the telehealth project. In the broadcasting it has taken the lead in innovations to promote digital audio and television broadcasting.

SENTECH’S CARRIER OF CARRIER BUSINESS

The Carrier of Carrier license is the wholesale component of its telecommunications licence. Under this licence Sentech is the first operator licensed to deliver wholesale telecommunications traffic to licensed Operators in and out of South Africa. This includes voice, data, and Internet traffic that are transited between South Africa and the rest of the world. It precludes the direct sale of services to end users and customers. It is by nature a

Low-margin-high-volume business and in which incumbent has entrenched itself.

Telecommunications traffic between South Africa and the rest of the world is traditionally carried via submarine cables. This cable is optic fibre and provides high quality connectivity to the rest of the world. This need for cable access will necessitate a closer working relationship with the incumbent, Telkom. Satellite communications is used throughout the world for all services but currently is more expensive and suffers some transmission delays especially when more than one hop between the earth station occurs.

Despite the challenge of getting access to cable on wholesale basis Sentech has harnessed the best of breed technologies to implement the carrier of carriers business. According to legislation, end users will ultimately have the freedom of choice through “carrier preselection”, and will be able to select their international telephone, data and Internet operator of choice, on the basis of service and price.

SENTECHS MULTIMEDIA BUSINESS

The Sentech Multimedia licence is the companies retail telecommunications business. The licence has attracted extensive public attention in that the notion of a “multimedia service” has been targeted as a subject of construed misinterpretation.

It is in fact groundbreaking legislation in attempting to simply define a natural evolutionary process, when technologies are used in a complementary fashion to emulate the communication capacities that we, as human beings, have constantly used in our daily lives and business communications. Multimedia is the use of real-time interactive voice, text and image in the same way we use all our human senses to communicate

Sentech has been the leader in South Africa in providing broadcasting services to all South Africans. The confluence of broadcasting, telecommunications and Information technology, in the form of a new generation multimedia network will be core technology used by Sentech to deliver these services.

The concept of mobility is not precluded from this service offering, as customers may use mobile and fixed connectivity to use a multimedia service. The notion “once connected and always available” is key and core to the multimedia service offering, as are the capabilities of the mobile GSM services and the insatiable customer demand for a more flexible and easy to use technology.

Once again Sentech has been an innovator by leveraging the skills and innovative products and services of its subsidiary Infosat. Sentech has used its broadcast capabilities to deliver high-speed data over broadcast networks known as “data-casting” or “multicasting”. This technology was originally only the domain of privileged, high security military data networks but not customised for widespread commercial use. Multicasting uses satellite technology to deliver high data volumes to customers without high-speed, expensive, dedicated terrestrial circuits. This capability is the key to bringing the Internet, health, education, commercial and government services to the broad market in an environment where only a few percent of the population has access to the telephone.

Sentech has the capacity and capability of its broadcasting infrastructure both terrestrially via more than 200 broadcasting high sites and “direct to home” satellites to immediately be in-touch with all peoples in the country. Sentech is far along the path to “connecting you” instantaneously or “on demand”.

Sentech will, however also continue its core business as South Africa’s primary signal distributor. In particular significant inroads have been made technologically and contributions to legislative policy in digital video and audio broadcasting (DTT & DAB). The use of Digital broadcasting systems, together with IP technologies, has a profound role in the multimedia arena. DVB-RCT (Return Channel Terrestrial) and DVB-RCS (Return Channel Terrestrial) are the two main areas of technology that will impact on interactive television (iTV) and multimedia services

BUILDING SERVICE CAPACITY AS A MAJOR SERVICE PROVIDER

Sentech is currently engaged in evaluating potential technology suppliers and partners. Sentech issued a request to the industry for proposals to supply technologies and services. It is encouraged that all the major global players responded with enthusiasm and innovation.

The key elements will be a core IP-based intelligent network together with a broadband wireless access network. The selective use of these technologies will allow incremental increases in capital expenditure and capacity based on customer demand. This business model differs significantly from the traditional Telco model of “building an ark in anticipation of the flood”. This overcapitalisation of capacity in the early growth phases has been the downfall of global operators such as Global Crossing and KPN-Qwest. Although radio access networks are less than successful in highly populated areas such as Europe and the USA, it offers the capability of fast rollout to blanket Africa with the same quality and capability as first world operators.

VSAT systems will also be used for network traffic transport capability as well as to provide access to wholesale and retail customers.

SENTECH: PROUDLY SOUTH AFRICAN

Sentech takes it responsibility as a good corporate citizen seriously. It will develop and grow its skills base extensively through training and recruitment of South Africans. Sentech will use best of breed technologies and ensure that South Africa derives maximum benefit through creative ways of funding capital projects. Currently Sentech is involved with numerous projects in the market place and will integrate these with its license obligations.

The New Partnership for Africa’s Development (NEPAD) will also serve as the platform to share resources and combined efforts. Sentech is actively pursuing opportunities to implement the ICT objectives of NEPAD and committed to fully supporting the initiatives so ably developed and marketed by our State President in so many international forums. We are proud to be part of the South African initiative in the African Renaissance.