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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�

    Acronyms 183

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    Ωa @ @Sentech has transformed from the technical and broadcast arm of the SABC into

    a leader in converging communications technologies‘ ’

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    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

    communication technologies.

    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


    About Sentech

    4 Sentech Annual and Sustainability Report 2008

  • 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.

  • 6 Sentech Annual and Sustainability Report 2008

    Dr Sebiletso Mokone- Matabane

    Chief Executive Officer

    Dr Mokone-Matabane holds a PhD in educational administration and degrees in television, radio and political science.

    Beverley Ngwenya

    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.

    Nandi Sihlali

    Non-Executive Director

    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

    Non-Executive Director

    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.

    Colin Hickling


    Mr Hickling is the Chairperson of the Public Trustees and Trust Corporation. He is a former deputy chairperson of SABC.

    Dr Len Konar

    Non-Executive Director

    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.

    Thabo Leeuw

    Non-Executive Director

    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

    Mlamli Booi

    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

    information society‘

    Colin Hickling Chairperson


    Chairperson’s Report

  • 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

    government offices”.

    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

    remain outstanding.

    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

  • 10 Sentech Annual and Sustainability Report 2008

    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