Annual and Sustainability Report 2008 Sentech Annual and Sustainability Report 2008 v a A g d v @ a...
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Annual and Sustainability Report 2008
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� Sentech Annual and Sustainability Report 2008
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Contents Our vision, purpose and values 5 Board of Directors 6-7 Chairperson’s Report 8-13
Chief Executive Officer’s Report 14-�3
Sustainability Report �4-90
Financial Review 9�-101
Corporate Governance 10�-111 and Risk Management
Annual Financial Statements 11�-18�
Ωa @ @Sentech has transformed from the technical and broadcast arm of the SABC into
a leader in converging communications technologies‘ ’
Sentech is a State-owned, fully
commercial enterprise. Sentech was
awarded Multimedia and Carrier of
Carrier licences in 2002.
During the past few years, Sentech
has reinvented itself, transforming from
the technical and broadcast arm of the
South African Broadcasting Corporation
(SABC) into a leader in converging
Sentech connects its stakeholders to their
world and connects the world to them
through a wide range of communication
solutions. It provides the sounds of radio
and the pictures of television, and offers
internet connectivity from anywhere,
connecting customers to those overseas
and providing virtual private networks
for businesses. The Company’s plan is
to provide communications solutions
such as voice, data and video on one,
integrated digital internet protocol (IP)
Sentech’s long-term growth is dependent
on its success in markets traditionally
served by telecommunications
companies. Whilst its core business
remains broadcasting signal networks,
the broadband business is envisaged
as a major element of the product mix in
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Sentech Annual and Sustainability Report 2008 5
Sentech will be a leader in providing broadband communications.
Sentech is a broadband network business accommodating narrowband functionality on a common platform, supplying communication solutions and services to wholesale customers in chosen markets in South Africa and on the rest of the continent.
Values • Integrity, honesty and fairness in dealings with all stakeholders; • Quality customer service is the cornerstone of the Company’s success and every customer; contact should be a pleasant experience; and • Opportunities for Sentech people to develop to their fullest potential by ensuring quality leadership, rewarding excellent performance and encouraging innovation.
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Dr Sebiletso Mokone- Matabane
Chief Executive Officer
Dr Mokone-Matabane holds a PhD in educational administration and degrees in television, radio and political science.
Chief Operations Officer
Mrs Ngwenya holds a BSc in electrical engineering from the University of Cape Town. Has extensive experience in the telecommunications sector gained with South Africa’s leading ICT companies.
Ms Sihlali holds a BSc in electrical engineering (light current) and is a member of the South African Institute of Electrical Engineers.
Adv Nonkumbulo Tshombe
Adv. Tshombe is an admitted advocate of the High Court of South Africa, with an LLB degree and a higher diploma in taxation.
Mohammed Siddique Cassim
Chief Financial Officer
Mr Cassim is a chartered accountant, with an electricity pricing certificate from the University of Stellenbosch and a certificate in regulation and strategy of utilities from the University of Florida, USA.
Mr Hickling is the Chairperson of the Public Trustees and Trust Corporation. He is a former deputy chairperson of SABC.
Dr Len Konar
Dr Konar is a chartered accountant with a BCom and postgraduate diploma in accounting from the University of Durban- Westville, a master of accounting sciences degree (Illinois, USA), and a certificate in tax law and a doctorate in commerce (accounting) from Unisa.
Mr Leeuw holds an honours bachelor of accounting sciences degree from Unisa and a management advancement qualification from the University of Witwatersrand.
Board of Directors
Non-Executive Director (Resigned 25 July 2007)
Mr Booi holds a BSc degree and MSc Electronic (UCT), Graduate diploma in Project Management (Damelin). Mr Booi is a registered professional engineer with exprience in Telecommunications and Broadcasting.
Sentech Annual and Sustainability Report 2008 7
8 Sentech Annual and Sustainability Report 2008
Sentech is … a key pillar in the Government’s desire to deliver an
Colin Hickling Chairperson
Sentech Annual and Sustainability Report 2008 9
By any measurement standard, the year under
review was extremely challenging for the Board,
management, employees and stakeholders of
Sentech largely because of funding.
The broadcasting signal distribution business
continues to perform exceptionally well and
further details are included in the CEO’s and
Sustainability Report. A turnaround strategy
for the telecommunication business has been
formulated to enable Sentech to meet the
objectives of sustained profitability, improved
cash flows and essential business expansion.
It is expected that this will not only reverse
the loss situation, but transform the company
into a strong and vibrant institution capable of
withstanding external shocks and aggressively
tackling new growth possibilities.
The success of this strategy is, however,
dependent on the shareholder providing
unwavering financial and policy support, as
Sentech is repositioned as a key pillar in the
Government’s desire to deliver an “information
We were therefore heartened by the continued
financial support for the migration from
analogue to Digital Terrestrial Television (DTT);
to successfully fulfil our role for the FIFA 2010
World Cup; and recent statement issued after
the meeting of the South African Cabinet on
25 June 2008: “Cabinet noted and discussed
Sentech’s funding requirements and resolved
that the Presidency, National Treasury and DoC
would meet urgently to consider the funding
requirements with a view to expediting the
rollout of the wireless broadband infrastructure.
This wireless broadband infrastructure is
essential for improving broadband capability
and access, particularly for rural communities
and public facilities such as schools, clinics,
courts, Thusong Service Centres and other
Our optimism was strengthened by a letter
from the Minister of Communications, Dr Ivy
Matsepe Casaburri, on 26 June 2008, in which
she advised that “Cabinet yesterday once again
confirmed that Sentech is a strategic asset and
must be appropriately funded”.
At the time of writing, we await confirmation
that the necessary funding has been allocated.
In the meantime, the Board is mindful of its
fiduciary responsibilities and has put a stop to
any further expenditure on key projects where
binding and irrevocable funding commitments
In February 2008, the Board was subjected
to negative media attacks. In essence the
questions were raised about Sentech’s
presence in the retail broadband market and
Government reluctance to invest more public
funds in Sentech.
The Board had already agreed at a strategic
planning session in December 2007 to
“migrate MyWireless and BizNet from the
retail to the wholesale market; strengthen the
Carrier of Carriers (CoC) and V-Sat offerings
to ensure profitability, consider the impacts
of the recent Electronic Communications
Transmitter Site, Durban Regional Office
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Act 36 of 2005 (ECA); and further review
product opportunities and tariffs in the digital
Early in 2008 the Department of
Communications (DoC) clarified that Sentech’s
revised mandate is to construct and make
wireless broadband infrastructure available
on open access principles on behalf of the
State, with the primary objective of bridging
the digital divide, enabling development in
the Information Communications Technology