This Month:

. MTN launched a video-on-demand service, FrontRow . announced several price plan changes . Web Africa announced FTTH packages . MTN’s data sharing offer launched . Orange is opening their first retail shop in Claremont Key Competitor Activities Consumer and Enterprise January 2015 This and all previous editions available at http://ci.vodacom.co.za

Prepared by Strategy & Research Contact: Leandra Jonker or Tersia Esbach January 2015 Content

This report provides an overview of competitor activity in the consumer and enterprise segments during December 2014 and January 2015.

• Highlights – overview of competitor highlights During December 2014 and January 2015 • Consumer P&S Timeline • Enterprise Market Competitor Activity • Competitor Activity – MTN – – Cell C – Adjacent Players • Mergers & Acquisitions - New • Financial and Operational KPIs

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 2 Highlights – Seven things of note

We have added an additional slide from this month focussing on Merger & Acquisitions in our industry over the past year. See slide 15. 1. After a successful pilot MTN launched FrontRow, a video-on-demand 2. While MTN reported a 49% increase in SMS traffic on service offering access to movies and television shows. Monthly Christmas Day, Cell C reported that SMS traffic declined by subscription starts at R199 per month (R179 for a trial period). Two 21% over the Christmas period and 22% on New Year’s Day. service offerings are available – FrontRow Club and FrontRow The SMS decline could be attributed to Cell C’s free WhatsApp Premiere. The Premiere service offers movie rentals at R15 per older offering, which has been extended to end March 2015, and title and R27 for latest titles. An option including a 10GB data bundle illustrating the possible cannibalisation of SMS by IM services is also available at R499 (R399 during the promotional period). Data such as WhatsApp. bundles which can only be used to access FrontRow content are available at R300 for 10GB, R450 for 20B, and R800 for 50GB. The first 3. Cell C announced several price plan changes. The pricing of 1,000 customers to subscribe to the service will receive their first month the majority of data bundles were increased, with the free. Customers can view content via an Internet browser, or on exception of the larger 10GB and 20GB bundles, which were Android or iOS mobile devices. An Android app is available, with an iOS decreased to an effective in-bundle rate or 5c/MB. A new 25MB app planned. bundle was also added at R6. Selected Smartdata contract monthly subscriptions were cut. SmartChat voice contracts will no longer be available. Current customers will remain on their current package for the duration of their contract, and will enjoy a lower out-of-bundle data rate of 79c/MB. StraightUp Contract and TopUp monthly subscriptions were increased, and out-of-bundle voice rates on all StraightUp packages were increased from 79c/min to R1.05/min. These changes take effect on 1 February 2015.

Cont. on next page Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 3 Highlights – Seven things of note

6. Another sub-R1 000 smartphone was announced by Pinnacle 4. Web Africa launched FTTH using Telkom’s network. Pricing starts at Africa. The Windows based Proline SP4 will retail at R999, is R639 for a 20Mbps line to R849 for a 100Mbps line, both excluding powered by Qualcomm’s quad core Snapdragon 200 processor data. A range of options including data is available ranging from and has 512MB RAM. R788 per month for a 20Mbps line with 40GB of data (plus an additional 80GB of after hours data) to R2 048 per month for a 100Mbps service including 400GB of data (plus an additional 800GB of after hours data). WebAfrica launched fibre offers in Parkhurst in November last year.

Line rental + data package 20Mbps 40Mbps 100Mbps

40GB (+80GB after hours) R788 R888 R998

60GB (+120GB after hours) R838 R938 R1,048 90GB (+180GB after hours) R938 R1,038 R1,148

120GB (+240GB after hours) R1,038 R1,138 R1,248 200GB (+400GB after hours) R1,238 R1,338 R1,448

300GB (+600GB after hours) R1,538 R1,638 R1,748 7. Orange is opening their first retail shop in Claremont, where 400GB (+800GB after hours) R1,838 R1,938 R2,048 customers will be able to purchase products directly, and will Source: My Broadband also function as a point of service for those who have purchased products online. 6. Google is shutting down Woza, a free website design tool aimed at startups and SMEs on 28 February 2015. Companies are informed on 8. MTN launched a data bundle sharing service, Data Share, the site that their sites will disappear from May 2015. According to which allows MTN customers to share their data bundle with Google this forms part of their plan to improve their SME offerings. up to 20 other MTN customers. The service is available free to all MTN customers.

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 4 Consumer Market • Consumer P&S launches (August 2014 – January 2015)

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 5 Consumer P&S launches (August 2014 – January 2015) * Promotions August ’14 September ’14 October ’14 November ’14 Dec ‘14 – January ‘15 MegaBonus (30/11/14), extended in December to 31/12/14 Nite & Daily Internet WhatsApp zero-rated, extended to 31/03/15 66c/m prepaid promo (1/06 – 30/09), in July dropped further to Lumia 730; iPhone 6 Infinity Select extra data(15/03/14) 50c/min (30/09/14) 66c/min voice rate 2.4GB once-off data (31/01/15) BlackBerry Z3 permanent Price Plan Adjustments Talk Free & 1c Per Sec promo – 31/08 “Bite sized” data bundles Pay4Me Steppa FrontRow 1c Per Sec Promo – 31/08 Night Express Bundles & One iPhone 6; Galaxy Note 4 Data Share Sky Unlimited Promo – 30/09 Time data Bundles Talk Free Daily “Surprises” summer promo (to 14/01/15) Ad hoc data Promo – 31/08 Wow Bonus Weekend Express Bundle Promo International voice promo (31/01/2015) New Internet Bundles Roaming (Saudi Arabia) MTN Sky Promo (31/01/2015) promo (to 10/10/14) Cliq5 – 31/10 Free Symfy Africa Promo Rush Hour – 30/11 Data Bundle Promo extended to 31/08/14 offering additional free data & extended validity in 06/14; additional data promo extended to 30/11/14 iPhone 6 Unlimited Lite SmartHome deals Samsung Direct Billing LTE-A launch, promotional Prepaid internet starterpacks package Completely Unlimited SIM (20/11/14) Smartplan 100 Black Friday deals – 5GB data; XBox Promotional Bundles DStv Explora Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 6 Enterprise Market • Competitor Activity at a Glance

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 7 Enterprise Market Competitor Activity at a Glance –

Segment Segment Segment Segment Segment SoHo/SME SoHo/SME SoHo/SME SoHo/SME SoHo/SME

Large/VGE Large/VGE Large/VGE Large/VGE Large/VGE

Significance Significance Significance Significance Significance

Activity Activity Activity Activity Activity

MTN will offer Amazon Web MTN launched Data Share, a Telkom will focus on the SME Google is shutting down Woza, a MTN appointed Debbie Minnaar Services, a cloud computing service that allows an MTN market this year. Dedicated free website design tool aimed at as General Manager for Products offering, through a service customer to share their data business desks to serve this startups and SMEs on 28 February and Services in their Group dubbed “Direct Connect” to bundle with up to 20 MTN market are now available in 2015. Companies are informed Enterprise Business unit. She will businesses across Africa. Clients numbers. The service is available Telkom stores, where ICT needs on the site that their sites will be responsible for determining will be provided with connectivity to all customers and can be of SME are analysed to help disappear from May 2015. the ICT offering across all markets to their data centres or activated via USSD. Any SIM choose suitable products across According to Google this forms and identification of key businesses and the AWS EU enabled device can be linked to mobile and fixed offers. part of their plan to improve their partnerships to drive Cloud and Ireland region through MTN’s the main account holder. While more SME offerings. Local tech start- other services. extensive Global MPLS network. the service was launched to the up Vigo, offers an online web consumer market, it will be MTN is restructuring their More & more creation platform targeted at attractive to SME/SoHo clients SMEs, has stepped in, offering enterprise unit in South Africa in too. clients a “seamless transition order to enhance customer more from their current Woza Web service and market sites” to Vigo. differentiation, and confirmed retrenchments in the unit due to More & more the restructure. More & more

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 8 Competitor Activity • MTN launched FrontRow, a VoD service • Telkom to focus on SME market • Cell C announces changes to pricing structure • Adjacent Players

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 9 MTN launched FrontRow, a VoD service Article links

Consumer . MTN launched FrontRow, a video-on-demand service offering access to movies . MTN erroneously sent messages to non-subscribers notifying them of free and television shows. Monthly subscription starts at R199 per month (R179 for Twitter access. This promotion is available to all MTN since May 2014, and is Products & a trial period). Two service offerings are available – FrontRow Club and still on-going. Services FrontRow Premiere.

Consumer . MTN launched Data Share, a service that allows an MTN customer to share their Broadband data bundle with up to 20 MTN numbers. No connection or linking fees apply.

Financial & . MTN reported that voice call traffic was ~100% higher on Christmas day, while . MTN’s shares were upgraded from “hold” to “buy” by Deutsche Bank. Operational SMS traffic increased by 49% and data by 60%. New Year’s Eve saw ~106% KPIs increase in voice call traffic, while data traffic increased by 78%.

. MTN appointed Debbie Minnaar as General Manager for Products and Services . MTN has opposed the Vodacom- deal, stating it would give Vodacom in their Group Enterprise Business unit. She will be responsible for determining unfair advantage, and that Neotel’s spectrum should be returned if change of Other the ICT offering across all markets and identification of key partnerships to control is approved. drive Cloud and other services. . MTN apologised for network disruptions experienced due to load shedding, . MTN is restructuring their enterprise unit in South Africa in order to enhance upgrades, vandalism, theft, and the migration of Nashua customers. customer service and market differentiation, and confirmed retrenchments in the unit due to the restructure.

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 10 Telkom to focus on SME market Article links

Consumer . Telkom launched direct carrier billing in partnership with Bango and Products & Samsung. The service will be available to Samsung smartphone and services tablet customers. Enterprise . Telkom will focus on the SME market this year. Dedicated business . ICT needs of SME are analysed to help choose suitable products across mobile Products & desks to serve this market are now available in Telkom stores, where and fixed offers. Services

. In December Telkom’s share price reached a new five year high of R70. Financial Since its lowest point 18 months ago, their share price has increased by KPIs almost 500%, and over the past year gained almost 150%. . LTE coverage was expanded to an additional five suburbs in , . Telkom will now focus on FTTB, with their coverage coinciding with their FTTH Network Cape Town, and KZN. LTE-A is currently offered at R1399 per month on coverage. a 36 month contract for a promotional period. . Telkom M2M subsidiary, FastNet, selected Semtech Corportaion’s LoRa . It is rumoured that Telkom’s ADSL entry-level line will be increased technology to target low power connectivity for IoT applications. FastNet from 2Mbps to 4Mbps. plans on building a network specifically of IoT services.

. Telkom appointed four new non-executive Directors, and announced . Telkom announced that discussions on the extension of their roaming the resignation of non-executive director Dr Clive Fynn. agreement with MTN are still in process. Other . 480 Call Centre staff contracts will not be renewed, and were allegedly . Telkom is suing Neotel and their sub-contractor Reesa Telecoms and Electrical removed from the premises by security guards. According to Telkom for R363 744 for damages on underground cables in hillcrest (KZN). the affected staff members were notified at the beginning of . Telkom and Blue Label telecoms have reached a settlement over a dispute November. The CWU will fight this decision on behalf of the affected following the Multi-Links failure in Nigeria. All claims and counter claims were workers. According to Solidarity this move was driven by the new withdrawn. Labour relations Amendment Act (effective 1 January 2015), which requires companies to offer the same benefits to temporary employees after three months as they do to permanent employees.

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 11 Changes made to pricing structure Article links

Consumer . MegaBonus, which offers four times the customer’s recharge value, has . Cell C’s zero-rated WhatsApp promotion has been extended to 31 March 2015. been extended to 31 December 2014. . Cell C announced changes to their pricing structure which was implemented Products & . Cell C’s SmartChat voice contract range will not be available after 1 on 1 January 2015 for prepaid customers, with data and contract pricing services February. Existing customers will remain on their contracts for the changes due on 1 February 2015. remainder of their contract period, and also benefit from a reduction in . Cell C has announced an increase in the monthly subscription of their Straight the out-of-bundle data rate from 99c/MB to 79c/MB. Up contract and top up packages. Out-of-bundle voice rates will also increase from 99/min to R1.05/min. Cell C cut the price of their 2.4GB once-off data bundle from R189 to . . The out-of-bundle rate of 99c/MB remains unchanged on all data bundles. Consumer R79. 200MB of data is allocated each month for 12 months. This The monthly subscription on selected Smartdata contracts has been cut. promotion will be available until end January 2015. (December 2014) Broadband . Cell C increased the data allowance on their Infinity Select offer to 10GB (from . Cell C has increased the price of the majority of their data bundles, 3GB) to all customers singing up for the contract between December and 15 increasing the effective in-bundle rate from the 15c/MB flat rate March 2015. (December 2014) implemented. A 25MB bundle has also been announced, at R6 (24c/MB). Operational & . Cell C reported a 7.1% increase in voice over the Christmas period, while . Saudi Telecom has attributed a R1.2 billion impairment to Oger Telecom’s in data usage increased by 62% and SMS declined by 21%. On New Year’s Cell C, and said they would be evaluating options relating to their international Financial Day voice increase by 4.8%, data by 57% and SMS was down 22% year- investments. KPIs on-year.

. Cell C’s RAN upgrade which was completed in Gauteng will address . During 2014 442 base stations were erected nationwide, with 256 of these in Network network instability issues and has created the required framework for Gauteng. An additional 158 are planned for Gauteng in early 2015. Fibre their LTE strategy. The upgrade involved replacing 1 215 base stations. deployment to connect all base stations is a top priority for 2015. . Cell C is investing R2.4 billion in their network this year.

. Cell C has opposed the Vodacom-Neotel deal, stating that it would . Cell C lodged an application with the high court to review the new MTRs Other entrench Vodacom’s dominance, and possibly lead to abuse of implemented last year. dominance.

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 12 Adjacent Players Article links

. Free VoIP and a movie streaming service, Wi-Fi Drive-Inn, will be . Nedbank is trialling a mobile payments service, Accolades, which uses launching on the City of Tshwane’s free WiFi network during 2015. BLE beacons to connect customers with participating retailers when Consumer . Pinnacle Africa announced the Proline SP4, a R999 Windows based entering a store. The app facilitates secure card-based mobile Products & dual-SIM Smartphone. The device is powered by Qualcomm’s quad payments. In concept, customers will be able to select products and Services core Snapdragon 200 processor, has 512MB RAM, a 480x800 LED quantities purchased within the app and check out using the app. display and runs on Windows Phone 8.1.

. Vox Telecom was awarded the contract to deploy satellite-based . Axxess launched prepaid ADSL vouchers that can be converted into and voice to 300 farmers in the Karoo in areas around Consumer mobile data via their Client Control Panel or Axxess Mobile App. The the sensitive radio astronomy telescope. Famers will receive free data has a 3 month roll-over. satellite receiver equipment and 2GB of data at R119 per month Broadband . based Data SIM launched a SIM card offering unlimited (2Mbps download and 512Kbps upload speeds). MTN mobile data at R149 per month. According to founder Saeed . Engen launched free WiFi at their 1-Stop service stations in December. Moosa Data SIM has an agreement with Mocks Technologies that has . Web Africa launched FTTH using Telkom’s network and offering an APN with MTN, after MTN announced they had no working speeds of up to 100Mbps. Pricing starts at R639 per month for a relationship with Data SIM. MTN subsequently closed down the APN 20Mbps line to R849 per month for 100Mbps (data excluded). A owned by Mock Technologies, as they were not allowed to resell to R1 749 set-up fee applies, which includes a Huawei router. third parties. Data SIM plans on launching another unlimited data . OpenWeb is offering premium uncapped ADSL customers free mobile service soon, this time from . data of between 500MB for 2Mbps customers to 4GB for 40Mbps customers. Enterprise . Google is shutting down Woza, a free website design tool aimed at . Google this forms part of their plan to improve their SME offerings. Products & startups and SMEs on 28 February 2015. Companies are informed on Local tech start-up Vigo, offers an online web creation platform Services the site that their sites will disappear from May 2015. According to targeted at SMEs, has stepped in, offering clients a “seamless transition from their current Woza Web sites” to Vigo.

. FNB is reportedly expanding their fibre network to act as a back-haul Network for telecoms services. No details on what services will be offered.

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 13 Adjacent Players Article links

. Blue Label Telecoms have called off acquisitions talks with an . The Competition Commission approved the merger of Kalahari and unnamed party. Takealot, on condition that job losses do not exceed 200. Other . The Competition Commission recommended that the Tribunal . The DA is questioning the validity of a R4.3 billion tender for 5 million approve Didata’s acquisitions of certain MWEB divisions. government-subsidised set-top boxes, based on several factors, including the . Following a Supreme Court ruling that typed e-mail signatures were low key measure in which it was conducted; financing of the devices – only binding, Norton Rose Fulbright noted that the same rule applies data R2.39 billion has been approved, DTH standards have not yet been approved, messages, such as WhatsApp and BBM. and the Broadcast Digital Migration policy has not yet been approved by the . According to Internet Solutions the Vodacom-Neotel deal will Cabinet. negatively impact competition, lead to higher prices and poor network . An outgoing ICASA councillor, Joseph Leboosa, accused the regulator of quality, and increase the risk of collusion. operational inefficiency and void of leadership, urging parliamentary . Vigo won MTN App of the Year 2014 and 2014 NSBC Business committees to review several matters. Champion of SA Award and Carl GER Global Technology Entrepreneur . ICASA responded to criticism received on their IMT roadmap published in of the Year. November 2014. According to ICASA the Roadmap takes the Radio . A Netflix spokesperson has confirmed that they will launch in South Frequency Migration Plan of 2013 a step further, by assessing the overall Africa within the next two years, as part of their global expansion demand for mobile broadband how to clear the identified IMT bands. strategy. . The DA filed an application to access minutes of all meetings held by ICASA . Facebook is reportedly opening a local office. They have placed an as the regulator has failed to publish these as required. According to the DA advert to a position which would be located in Joburg. the ICASA website is poorly maintained. . Craig Fleischer, former mobile communications head at Samsung . ICASA published revised draft radio frequency spectrum regulations which South Africa, has been appointed as Neotel’s Chief Sales and Market are open for industry and public comment until 13 February 2015. Officer. . In a proclamation signed by Jacob Zuma, ICASA will report to both the . Altron has warned that headline earnings for the year ending February Ministry of Communications and the telecoms and Postal Services 2015 would be at least 40% down due to “difficult trading conditions”. Department. . Vox Telecom announced a stand-alone business strategy will be . ConvergeNet will convert into an investment holding company. The followed and that the company is no longer for sale. company currently has no operating entities, and was established in 2005 to . According to the latest Akamai State of the Internet report South Africa focus on converged solutions in the ICT sector. was the only EMEA country to not meet their minimum broadband . Orange announced their first retail shop will start trading early 2015 in speed requirements, with an average broadband speed of 3.6Mbps Claremont in cape town. (10Mbps and 4Mbps are their “high broadband” and “broadband” thresholds)

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 14 New addition to the monthly Mergers & Acquisitions CI

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 15 Mergers & Acquisitions Deals not yet finalised Date Buyer Target Detail

Internet Solutions bought Antfarm, an online media streaming service company providing products and services for streaming, webcasting, January 2014 Internet Solutions Antfarm podcasting and encrypted content delivery, for an undisclosed amount. The company will continue to focus on the enterprise market. IS hopes to expand services in other African countries. more

Dimension Data announced the acquisition of subsidiaries of NextiraOne, a European communications services company, in order to meet March 2014 Didata NextiraOne their target of doubling revenue to $12 billion by 2018, which will be completed in two parts.

Altech increased their shareholding in NuPay, a transaction service provider specialising in payment and collection solutions and managed April 2014 Altech NuPay electronic payment solutions, to 100% in a deal worth R80 billion.

May 2014 Internet Solutions AlwaysOn Internet Solutions increased their stake in AlwaysOn from 51% to 100%. more

May 2014 Telkom Business Connexion Telkom made a R2.7 billion offer to acquire BCX in may 2014. The deal is still awaiting approval.

August 2014 Blue Label Telecoms Via Media Blue Label Telecoms have put in an offer to acquire a 75% stake in mobile content developer Via Media.

September Dimension Data and MultiChoice have announced plans to launch WirelessCo, a JV that will combine Dimension Data’s AlwaysOn and Didata MultiChoice 2014 MWEB’s Wi-Fi assets. The two companies will build and operate an open-access carrier-grade Wi-Fi network. more

October Didata acquired 100% of Xpedia Fusion, a subsidiary of Xpedia Consulting and part of Xpedia IT. more Didata Xpedia Fusion 2014

October Agile Business Didata acquired 100% of privately owned Agile Business Solutions specialising in PeopleSoft and Oracle human capital management Didata 2014 Solutions systems. more

November MTN agreed to acquire 50% +1 share of in May 2014 in a deal rumoured to be valued at around R1 billion. The deal was approved MTN Afrihost 2014 by both the Competition Commission and Competition Tribunal in November 2014.

December The Competition Commission recommended that the Tribunal approve Didata’s acquisitions of certain MWEB divisions (MWEB Business, Didata (IS) MWEB 2014 core network assets of MWEB ISP, and Optinet), on condition that retrenchments not exceed 35. The deal was announced in August 2014.

January 2015 Naspers/Kalahari Takealot The Competition Commission approved the merger of Kalahari and Takealot, on condition that job losses do not exceed 200. more

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 16 Financial and Operational KPIs • Total Telecoms Revenue • Mobile Subscription Market Share – Sep ’14

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 17 Operational and Financial KPIs Back to highlights Total Telecoms Mobile Revenue Total Telecoms Revenue Revenue Market Share Market Share Mobile Subscription Market Share – Sep ’14 13/14 13/14 Vodacom MTN Cell C Telkom Mobile Telkom Neotel 3% R 133 837m R 141 053m R 145 158m R 150 603m 2.6% 17% 19.0% 1.6% 2.0% 9.1% 11.5% Vodacom MTN 26.8% 34.1% 45% Cell C Telkom Mobile

41.0% 52.3% 35%

FY 10/11 FY 11/12 FY 12/13 FY 13/14

. Vodacom’s share of the total telecommunications market at end March 2014 (estimated at R151 billion) was 41%. Vodacom leads in both revenue and subscription market share. . The total telecommunications market grew by 3.8%, fuelled mainly by mobile network operator growth. Telkom fixed revenue declined by 2.6% over this period. . Mobile subscription continue to grow, with SIM penetration estimated at 147% at June 2014. Year-on-year growth of 15.9% was recorded at the end of September 2014.

Notes: Subscription market share based on active subscriptions only. Source: WCIS, Informa Telecoms & Media, Vodacom Strategy & Research Total revenue reflects Vodacom financial years. Where applicable data has been recalculated to reflect this. Source: Company annual reports, Analyst reports, Vodacom Strategy & Research

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential Operational and Financial KPIs Back to highlights

MTN Interim Results – June 2014 Telkom Interim Results – September 2014 Next Results Release: Annual results for 2014 expected March 2015 Next Results Release: Annual results for 2014/5 expected June 2015

. For the six months ended June 2014 MTN Group revenue increased by 10.7% (4.1% constant . Telkom reported a 0.5% decline in operating revenue to R15.9 billion for the six months currency) year-on-year to R72 759 million, supported by continued weakness of the Rand, ended September 2014. This was driven by lower fixed voice revenue and lower data leased- particularly the stronger Nigerian Naira. The increase in revenue was mainly supported by line revenue. an 8% increase in revenue in Nigeria. . Fixed voice revenue was down 12% to R3.6 billion, driven by a 6.1% decline in voice minutes, a . Group EBITDA increased by 19.6% (10.6% constant currency) to R33 663 million (excl. profit decline in fixed lines from 3.7 million to 3.6 million, and fixed to mobile substitution. from tower sales) . Group EBITDA increased by 12.2% to R4.4 billion. Consolidated EBITDA Margin – 27.7%, . Group Capex is down 28.1% (32.7% constant currency). excluding one-off items. Mobile EBITDA improved by 50.7%. . Locally MTN revenue declined by 7% year-on-year to R19 157 million, while EBITDA . DSL lines increased by 7.4% to 965 000. declined by 7.5% to R6 382 million*. . Mobile subscriptions increased by 26.7% to 2 million, with blended ARPU up from R58.81 to . The decline in total revenue was attributed to lower outgoing voice revenue (down 8.6% to R71.99. R8 470 million) and a 30.4% decline in incoming voice revenue due to the impact of MTR . Mobile Revenue increased by 55% to R1.4 billion. Mobile data revenue was up 39.3% to R422 reduction. million and mobile voice and subscriptions revenue by 54.7% to R348 million. . Data revenue increased by 13.7% to R4 483 (23.4% of total revenue) despite a 38.1% . Total interconnect revenue declined by 1.49%, while mobile interconnect saw a 81.82% decrease in the average price per MB. Data users increased by 2.7% to 14.7 million. MTN increase to R60 million. now has 5.3 million active smartphones on their network. . Telkom denied underinvestment in their network after they reported a 79.9% decline in CAPEX (R164 million) and a 42.8% decline to R1.8 billion in total CAPEX (11.4% of Operating revenue from 19.8% in September 2013). The decline in mobile CAPEX was attributed to a shift to a more concentrated metropolitan roll-out. . According to CEO Sipho Maseko the company “hung on to fixed voice for too long” and took too long to invest in broadband and drive fibre investment. Other mistakes include the R10 billion spent on Multi-Links in Nigeria, and the most damaging according to him was selling the 50% in Vodacom, rather than investing more by purchasing the Venfin stake to gain control.

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential Competitor Activity Tables • Consumer Services - Competitor Products & Services • Enterprise Services - Competitor Products & Services • MTN - Products & Services • Telkom and Telkom Mobile / 8ta - Products & Services • Cell C - Products & Services

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 20 Back to highlights Consumer Services - Competitor Products & Services

The table below summarises Products and services launches, M&A activities, and network or technology improvements and launches for the past seven months

Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14/Jan-15 Consumer MTN, Telkom, MTN, Telkom, Cell C, MTN, Engen, Broadband BitCo, SANTC OpenWeb Axxess, Cell C, MTN MTN MultiChoice, MWEB, OpenWeb, iBurst Web Africa, Vox Afrihost, Neotel Afrihost, MWEB, Cell C, OpenWeb, Broadband Pricing/changes/ enhancements Telkom Telkom MTN Telkom Axxess Pricing Telkom MWEB, Cell C Cell C, MTN, Axxess Cell C Cell C MWEB, AlwaysOn, Telkom, AlwaysOn, Broadband Promotions MTN MTN, ITNT MTN, Telkom Cell C MTN Axxess Loyalty/Rewards MTN, Telkom, Virgin Promotions MTN MTN, Cell C MTN MTN, Telkom, Cell C Cell C Mobile Apps Orange Content MTN Altech, Times Media Orange MTN Financial/Mobile Money services MTN Zapper Commerce Standard Bank Nedbank Voice and Data Cell C MTN, Cell C Mr Price Mobile, MTN Telkom MTN, Telkom Telkom VAS iBurst Zwipit Telkom Mobile Product Cancellation Hardware MTN, Afrihost, Nokia BlackBerry Cell C MTN, Cell C, Telkom MTN Pinnacle Africa

Access the attached Word Document for further detail on the relevant activity for each competitor by month

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 21 Enterprise Services - Competitor Products & Services Back to highlights

The table below summarises Products and services launches, M&A activities, and network or technology improvements and launches for the past seven months.

Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14/Jan-15 Enterprise Broadband CS MWEB MWEB, iBurst Telkom, Neotel Broadband Pricing/changes/enhancements MWEB Managed Services MTN Telkom MTN Managed Services - changes/enhancement MTN Voice and Data Telkom Mobile Advertising MTN Financial Services M&A/Investments Vumatel, FibreCo, Network/Technology Improvements Western Cape MTN, Cell C MWEB MTN, Telkom Broadband Infraco Telkom, BitCo Telkom, Cell C Government

Access the attached Word Document for further detail on the relevant activity for each competitor by month

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 22 MTN - Products & Services Back to highlights

The table below shows only MTN’s Products and services launches, M&A activities, and network or technology improvements and launches for the past seven months

Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14/Jan-15 Consumer Broadband MTN MTN MTN MTN MTN Broadband Pricing/changes/enhancements MTN Pricing MTN MTN Broadband Promotions MTN MTN MTN MTN Loyalty/Rewards Promotions MTN MTN MTN MTN MTN MTN Voice and Data MTN MTN MTN VAS Content MTN MTN Hardware MTN MTN Mobile Money MTN Commerce Enterprise Managed Services MTN MTN MTN Voice and Data Mobile Advertising M&A/Investments Network/Technology Improvements MTN MTN MTN

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 23 Back to highlights Telkom and Telkom Mobile / 8ta - Products & Services

The table below shows only Telkom’s Products and services launches, M&A activities, and network or technology improvements and launches for the past seven months

Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14/Jan-15 Consumer Broadband Telkom Telkom Broadband Pricing/changes/enhancements Telkom Telkom Telkom Pricing Telkom Broadband Promotions Telkom Telkom Promotions Telkom Telkom Voice and Data Telkom Telkom Telkom VAS Telkom Hardware Telkom Enterprise Broadband Voice and Data Telkom Managed Services Telkom Managed Services - changes/enhancement Network/Technology Improvements Telkom Telkom Telkom

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 24 Cell C - Products & Services Back to highlights

The table below shows only Cell C’s Products and services launches, M&A activities, and network or technology improvements and launches for the past seven months

Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14/Jan-15 Consumer Broadband Cell C Cell C Broadband Pricing/changes/enhancements Cell C Pricing Cell C Cell C Cell C Voice and Data Cell C Cell C Hardware Cell C Cell C Promotions Cell C Cell C Cell C Cell C Broadband Promotions Cell C Enterprise M&A/Investments Network/Technology Improvements Cell C Cell C

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 25 Article Links

Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 2626 Reference information MTN Telkom Axxess mobile data vouchers launched more… Load shedding, theft impact MTN’s network quality more… Changes to the Board more… Engen offers free WiFi more… MTN : Lifted to Buy at Deutsche Bank (MTNOY) more… Telkom call centre dispute looms more… Blue Label calls off buyout talks more… Free MTN Twitter notifications on Vodacom more… Telkom contract workers get the boot more… Orange SA store 'won't sell junk' more… MTN Data Share launching early 2015 more… Five more suburbs get Telkom LTE-A more… MWEB-DiData merger deal gets approval more… WhatsApp, BBM messages are legally binding in SA more… MTN FrontRow video streaming review more… Bango brings direct carrier billing to Telkom Samsung mobile users more… Free voice calls, movie streaming on Tshwane Wi-Fi network MTN launches subscription-based video service in South Africa Telkom share price rallies 500% more… more… more… Telkom stock continues gains more… Quiet, please! Vox wins SKA deal more… MTN unveils its video-on-demand play more… Telkom, Blue Label kiss and make up more… FNB adding fibre for telco network: sources more… MTN launches video-on-demand services more… Telkom targets fibre-to-the-business more… Competition Commission gives Kalahari-Takealot deal the go- Icasa must block Neotel sale: MTN more… Telkom terminations may have snowball effect: union more… ahead more… 1 Nedbank pilots mobile payments app more… MTN appoints senior IT executive to drive enterprise business Telkom South Africa Expands LTE-Advanced to Additional Five R4.3 billion digital TV tender in doubt: DA more… offerings more… Suburbs more… Telkom ADSL speed upgrade planned: sources more… Icasa is leaderless and clueless: councillor more… MTN launches data sharing service more… Telkom sues Neotel for cable damage more… DA seeks Icasa council minutes more… MTN Plans South Africa Job Cuts in Overhaul of Business Unit FastNet selects Semtech LoRa Tech as IoT Wireless Solution of New draft radio spectrum regulations released more… more… Choice more… Zuma emasculating SA’s ICT sector more… MTN to retrench in restructuring more… South Africa's FastNet to develop IoT network for low-power Now Icasa to report to Muthambi and Cwele more… MTN links up to Amazon Web Services more… applications more… ICASA responds to IMT roadmap censure more… Cell C Telkom-MTN deal discussions continue more… ConvergeNet to bow out of ICT more… South Africa: Telkom Commits to Growth of SA SME Sector more… Google to shut down free website service Woza more… Massive Cell C data price cut more… Google SA 'drops' thousands of SMEs more… Other Cell C completes Gauteng RAN upgrade more… Vigo aims to pick up Woza Online SMEs more… Altron warns of slump in profits more… Cell C promises network stability more… R149 uncapped mobile data SIM launched more… Samsung’s Fleischer takes top job at Neotel more… R149 unlimited data SIM – what happened behind the scenes Cell C targets fibre in 2015 more… Free mobile data with premium uncapped ADSL more… more… Cell C to oppose Vodacom, Neotel deal more… Openweb offers free mobile data with premium uncapped ADSL Beware R149 uncapped data SIM: MTN more… more… New Cell C data prices released more… Pinnacle Africa releases Proline phone more… Sale of Vox Telecom cancelled more… Cell C contract price hikes on the way more… The Proline SP4 is a new R999 dual SIM Windows Phone more… Big broadband speed increases in South Africa more… Festive season cheer for networks more… Vodacom taking SA back to monopoly more… Cell C slams Vodacom-Neotel deal more… Netflix said to confirm SA launch plans more… Back to: Cell C allots R2.4bn for 4G expansion more… 100Mbps fibre-to-the-home from R998 per month more… Cell C heads to court over call rates more… Facebook is hiring in SA more… Other Cell C unmoved by R1.2 billion investor write off: report more… Vodacom Strategy & Research Key Competitor Activities – January 2015 C3 – Vodacom Confidential 27