1

The carrier of choice in wholesale market

Wally BeeldersManaging Executive:ISMS

2

A comprehensive wholesale product portfolio

Full portfolio of VOIP and broadband servicesWholesale network connects to over 87 countries and territoriesGlobal IP coverage via 15 POPsin 13 countriesInternational fibre connectivity via SAT3/SAFETerrestrial fibre

Distribution

Application hosting

Web hosting

Data centers

Packaged voice services

Switched voice minutes

Voice-over-IP

Gigabit Ethernet

SDH/Sonet

Dark fibre

Ducts

Dial-up Internet access

DSL

Local leased circuits

Broadband fixed wireless

Local fibre

Managed IP services

Long-distance leased circuits

Frame relay/ATM

IP transit

SDH/Sonet

Wavelengths

Dark fibre

Ducts

E-service

Voice

MANs

Access

Managed dataservices

Transport

Infrastructure

Source: Ovum

3

Combating increasing competition in international

Expected market share losses for international voice

SNO to be operational in 2004

Revenue pressure from lower settlement rates

Continued bypass of Telkom network

IP convergence

Exchange rate impact on revenues

Trends Opportunities

Internationalcarriers

Switched hubbing

Global IP connectivity

International call centres

New services to African operators

4

Global IP connectivity expansion

Telkom’s investment to increase its global reachEnsure high redundancy in networkNegotiating peering agreements with Europe and US operatorsSLAs on IPNet

111 8th AveNY,USATelkom

IP Transit

TelecityLDN, UKTelkom

IP Transit

Amsterdam

IP Transit

SAT-3 (R)

Connection via SAFE, Asia to the West Coast of USA –Sprint (Flag FEA(-), FNAL(P) and FP-1(P))

Tycom (P)

TeliaTAT-14 (P)

RSA

Global CrossingAC-1 (P)

Global Crossing (P)

GlobalCrossing

USA

USA

EUROPE(Existing)

EUROPE

ASIA

TBD

SMW3 (restorationpath)

Sesimbra

Penang

RSALIR

WCTB

RSALIR

RJRB

WashingtonAshburn

Note 1 IP Transit

5

International call centres expanding

Government is promoting south africa as an international call centre and business process outsourcing (BPO) hubInternational BPO target segments – sectors with large number of transactions

Banking and insurance Telecom – retail IT– technical support Retail TravelHealthcare

Currently 15 contracted call centre customers

6

Servicing African operators

Value add platforms – TDM (Telkom)

Voice traffic hubbing

IPNetservices(Telkom)

Network management systems (Telkom)

Network management services

(Telkom - NNOC)

SAIX(Telkom)

Fixed/Mobile operator serviceDDP accessSwitched hubbingBroadband wholesale

Professional servicesConsultancyTrainingProgramme management

7

Mobile interconnect

Growing international mobile minutesSlowing growth in revenue from leased facilities from Telkomfor base station links Expect negative growth in fixed-to-mobile to continueRisk of losing mobile business to SNO

Old interconnect regimeTelkom peak retention fixed at 21c/min irrespective of retail rateTelkom paid mobile operators 21c/min for international callsTelkom gave mobile operators various discounts

New interconnect regimeTelkom peak retention 33c/min and increase annually by the greater of CPI or 2c/minTelkom can increase termination annually by the greater of CPI or 2c/minPay mobile operators same for national and internationalDiscontinued various discounts

8

Competitive wholesale focus for the future

Partnership agreementsTerm and volume agreementsIP interconnect – indirect minutes

Interconnection with SNOBroadband facility leasing agreementMinimise arbitrage opportunitiesLeverage quality and value proposition

Network outsourcing/switched hubbingIP clearinghouse for AfricaNetwork managementInterconnect hubbing

Analogue to digital migrationService level agreementsCoverage solutions

ISPS/VANs

Interconnection

International voice/capacity

Broadcasting