Consumer Issues Relating to Cellular Services

Consumer Issues Relating to Cellular Services Talaat LahamCEO & Chairman 5 November 2002

s Agenda • Company Overview • Quality of Service • Customer Care • Tariffs • Challenges • Conclusion Consumer Issues Relating to Cellular Services Consumer Issues Relating to Cellular Service

Company Overview – Saudi Oger Saudi Oger Saudi Arabia Oger Telecom South Africa Holdings Ltd. Bermuda 90% Border Multiple South AfricanOrganizations 100% 100% CellSAf Oger Telecom (South Africa) 60% 40% 3C Telecommunications “Holdco” 100% Cell C “Opco” [The Licensee] 100% 100% Cell C Prop Co Cell C Service Provider Company (Pty) Ltd Consumer Issues Relating to Cellular Service

Saudi Oger • Privately run conglomerate • Operations in the Middle East, Africa and Europe • Top tier contractor for the construction, operation and maintenance of complex infrastructure and facilities projects in the Middle East • Projects worth over $20bn+ over the past 20 years • Also runs operations covering shipping, transportation, banking andtelecommunications • At December 2001, had equity & retained earnings of >$1bn & >28,000 employees globally • In 2002, SO’s shareholders transferred $220 million of assets into the business as part of a general recapitalisation Consumer Issues Relating to Cellular Service

Company Overview - CellSAf SocialEmpowermentGroups Black owned investment and technology groups Regional investment and technology groups 15% 51.25% 16.25% CellSAf (Pty) Ltd Women owned investment and technology groups Education and training Rural development trusts, SMME and informal business 3.75% 8.75% 5% • Historically disadvantaged persons own 40% of the company • CellSAf is formed frommore than 30 BEE groups Consumer Issues Relating to Cellular Service

Company Overview - Who we are? • We are a South African incorporated company, practising true empowerment • We are a significant player in the South African economy: • creating innovative employment opportunities and contributing to skills development in the country • using preferential procurement practices • setting and meeting tremendous growth targets • We boast a diverse, multicultural, multi-disciplined workforce Consumer Issues Relating to Cellular Service

Company Overview - Who we are? • We are a consumer champion, offering: • flexible packages tailored to the needs of various target segments in the market • innovative, quality products and services at affordable prices Consumer Issues Relating to Cellular Service

Company Overview - Employment Equity September 2002 Over 75% of our staff comprise of previously disadvantaged individuals and span all areas of management Consumer Issues Relating to Cellular Service

Company Overview – Milestones Achieved • Feb 16, 2001 Licence awarded by Minister • Jun 25, 2001 Service licence issued by ICASA • Aug 3, 2001 Spectrum licence issued by ICASA • Nov 17, 2001Commercial Launch • Nov 17, 2001 Pre-paid Launch • Dec 11, 2001 Post-Paid Launch • Dec 21, 2001 E-GSM frequency band awarded • Sept 13, 2002 Community Service Telephones tariff has been approved • Nov 5, 2002More than 970 000 Subscribers Consumer Issues Relating to Cellular Service

Agenda • Company Overview • Quality of Service • Customer Care • Tariffs • Challenges • Conclusion Consumer Issues Relating to Cellular Services Consumer Issues Relating to Cellular Service

Quality of Service - Is Our Differentiator • The South African mobile sector is highly competitive, more so since our entry into the market • The South African consumer is discerning and expects high levels of quality • It is therefore in our interest to offer the highest levels of quality Consumer Issues Relating to Cellular Service

Quality of Service – Our Policy • We aim to provide products and services of superior quality to our customers • We pursue quality excellence in all areas of our organisation • We continually benchmark ourselves against international best practices Consumer Issues Relating to Cellular Service

Quality of Service – Our Standards • Our licence prescribes the following targets: • Network Availability to be at least 95% • Call Completion Rate to be at least 95% • Call Blocking to be less than 2% • Call Quality to meet ETSI standards • Our network performance is subject to • independent audit and is periodically • reported to ICASA Consumer Issues Relating to Cellular Service

Quality of Service – Network Monitoring • The network is monitored on a 24-hour basis by our Network Management Centre • Daily tests are performed on systems for preventative and corrective action • Maintenance is planned and performed to ensure the least disruption to service • We have invested in world-class test and measurement technology to maintain international standards Consumer Issues Relating to Cellular Service

Quality of Service – Network Coverage • Since our launch Cell C has offered national coverage via a roaming agreement with Vodacom – this is a first for South Africa • Cell C is the first dual band cellular operator in SA • The 900 MHz band is almost fully utilized in urban areas by the other operators. We are rolling out our own urban network using the 1800MHz band, which provides more capacity hence less congestion for the customer • Cell C is using the 900 MHz band in rural areas to achieve cost-effective coverage over larger areas Consumer Issues Relating to Cellular Service

Quality of Service – Coverage Principles • We use the Siemens GSM/GPRS 900/1800 platform • We are aiming for 2500 base stations by the end of 2003 • We have focused our rollout on key metropolitan areas • Coverage is provided by Vodacom sites in areas where we are still in the process of rolling out sites • Our base station sites comply with industry regulated • electro-magnetic emission and compatibility standards Consumer Issues Relating to Cellular Service

Quality of Service – Coverage Locations Site locations are selected based on • Licence requirements to cover 8% of the territory and 60% of the population within 5 years of commercial launch • Exclusion zones as per roaming agreement with Vodacom • Populated areas in rural South Africa • Roads and access points to towns and cities Consumer Issues Relating to Cellular Service

Quality of Service - Dropped Calls • Dropped calls are a reality in GSM networks worldwide • We are equipped to monitor and manage the dropped call rate on a continual basis • Engineering teams are trained to use best practices for investigating and solving dropped calls • Our dropped call rate meets internationally accepted norms Consumer Issues Relating to Cellular Service

Quality of Service -Reducing Dropped Calls • We experience dropped calls for two main reasons: • low signal strength • external interference • We can reduce dropped calls by: • Rolling out base stations without unnecessary delays • Operating without radio interference Consumer Issues Relating to Cellular Service

Customer Care – Our Code of Conduct • Our customer service Code of Conduct is approved by ICASA • It is available to all customers by telephone, as well as on our website • Confidentiality of customer information is sacred • Our Customer Call Centre operates 24-hours and aims to resolve queries and complaints Consumer Issues Relating to Cellular Service

Customer Care – Advice and Assistance • Our customers can expect informed advice and assistance from qualified staff on: • The choice of package best suited to their needs • Instructions in the operation and maintenance of handsets and selection of value-added services • Information regarding prices and terms and conditions in accordance with which the service is provided Consumer Issues Relating to Cellular Service

Customer Care • All our customers are important to us, therefore: • We provide products and services that offer simplicity, choice and value • We are committed to providing superior customer service support • We invest in staff training in these critical areas: • customer care • products and services • GSM technology • All calls to the Call Centre are recorded and monitored for service quality purposes Consumer Issues Relating to Cellular Service

Customer Care – Multi-lingual service • We employ multi-lingual staff at our Call Centre • The many languages spoken by our Call Centre agents is a differentiator of which we are proud • We are striving to ensure that our services are available in each one of the 11 official languages Consumer Issues Relating to Cellular Service

Customer Care – Please Contact Us • Our Call Centre can be reached by dialling 140 toll-free on a Cell C mobile • Or by dialling 084 140 from any other mobile or fixed line • Anyone can send a query via email to: custserv@cellc.co.za • We have voluntarily registered as a corporate member of the consumer watchdog website, www.hellopeter.com Consumer Issues Relating to Cellular Service

Tariffs - Our Value Proposition VALUE SIMPLICITY CHOICE • Provision of lifestyle enhancing cellular services based on: • Uncomplicated tariff • Per second billing on all tariffs (60/1, 30/1 or 1/1) • All day R2 flat rate on pre-paid • Choice of lifestyle taylored tariffs & Value Added Services • Choice of Friends and Family Members • Choice of contract lengths – 1,12,24 months • Packages with and without inclusive minutes • All day R2 flat rate • Discount on frequently used numbers • Discount on Cell C to Cell C calls • 5 Free Call me back SMS’s per day • Per second billing (60/1, 30/1 or 1/1) • Discount on international calls • Upfront voucher bonus minutes • Moonlight period Consumer Issues Relating to Cellular Service

Tariffs – Some Key Benefits • All our tariffs include Per Second Billing at no premium to the standard tariffs • Based on usage analysis, a tiered approach includes Per Second Increments after 60s, 30s, or 1 second depending on the chosen package • A 10% discount applies when dialing pre-selected “Friends and Family” numbers • Flat rate tariff of R2 per minute is the lowest available in the prepaid market and customers can receive incoming calls for as little as R5 per month. Consumer Issues Relating to Cellular Service

Tariffs – Post Paid Summary Consumer Issues Relating to Cellular Service

Tariffs – Pre-Paid Summary Consumer Issues Relating to Cellular Service

Challenges We require the assistance of the Portfolio Committee on Communications Consumer Issues Relating to Cellular Service

Challenges -Constraints The frequency bands assigned to Cell C are encumbered with legacy government and industry operators and/or illegal cordless systems. Consumer Issues Relating to Cellular Service

Challenges -Interference Where we experience interference it: • Degrades call quality, producing: • Poor call processing (call set up failure, dropped calls, failed handovers) • Poor speech quality (breaking up of voice) • Hinders the performance of next generationservices ie GPRS, by: • Constraining data throughput • Restricting data reliability Consumer Issues Relating to Cellular Service

Challenges – Action Needed The following actions, if expedited by Parliament would result in better cellular service for our customers: • Migration of all legacy systems in accordance with radio frequency band plans i.e. SABRE • Budgetary provision for cost of migrating legacy systems • Effective mediation between concurrent users of the frequencies prior to migration Consumer Issues Relating to Cellular Service

Challenges – Site Approval Delays We are governed by the following legislation with regard to base station site approvals: Local Authority (“LA”) • Town Planning & Townships Ordinance 15 of 1986 • National Building Regulations and Buildings Standards Act 103 of 1977 • Municipal System Act 32 of 2000 Environmental Provincial Department (“EPD”) • Environmental Conservation Act 73 of 1988 • Regulations contained in Government Notices R 1182, 1183 and 1184 of 1997 promulgated in terms of sections 21, 22 and 26 of the Environment Conservation Act (Act no. 73 of 1989) • EIA guideline document: Department of Environmental Affairs and Tourism. 1998. Guideline Document. EIA Regulations. Implementation of Sections 21, 22 and 26 of the Environment Conservation Act. Pretoria. Department of Environmental Affairs and Tourism Civil Aviations Authority • Civil Aviations Act Consumer Issues Relating to Cellular Service

Challenges – Site Approval Delays Our site approval process is delayed by: • Cumbersome and conflicting administrative processes • Unnecessary use of consultants and experts • Lengthy advertisement process • Lengthy and unstructured public participatory process Consumer Issues Relating to Cellular Service

Challenges – Other Delaying Factors • Disparate policies and legislation between the local, provincial and national authorities • Conflicting approval conditions and processes between the local and provincial authorities • Lack of clarity on type, validity and significance of objections that may be lodged within the public participatory process Consumer Issues Relating to Cellular Service

Challenges - Approval delays Consumer Issues Relating to Cellular Service

A prime example of factors contributing to APPROVAL DELAYS Public Objections to all 6 alternative site options including site sharing. Issue still pending Site cancelled after two years of site acquisition problems owing to irresolvable conflicting permit issues between LA and DACEL Construction of permitted site stopped due to public objection Site stopped due to conflicting permit issues and public objection received Consumer Issues Relating to Cellular Service

Challenges - Recommendations Establishment of a National Environmental Legislative framework that: • Reinforces the essence and purpose of the National Environmental Management Act. • Supports a harmonised approach to the creation of policy and legislation at all levels of government. • Promotes co-operation between Local Authority and the Provincial Authority Consumer Issues Relating to Cellular Service

Challenges - Recommendations • Establishing criteria for assessing the significance of the type and validity of objections received within the public participatory process. • Formulating a national legislative framework that allows for a uniform approach to authorisations in the Cellular Industry. • Facilitating our network rollout process thereby improving the quality of service given to the consumer Consumer Issues Relating to Cellular Service

Conclusion • We are committed to providing a high quality network to our consumers • Our potential to provide even better service is inhibited by the lack of interference-free spectrum and a coherent and speedy site approval process • Your assistance in meeting these objectives is crucial to reduce delays in achieving the national communications objectives Consumer Issues Relating to Cellular Service

Agenda • Company Overview • Quality of Service • Customer Care • Tariffs • Challenges • Conclusion THANK YOU! Cell C celebrates its first birthday on 17 November 2002 Consumer Issues Relating to Cellular Service

Consumer Issues Relating to Cellular Services