WorldSpace (Southern Africa) (Pty) Ltd.

1. WorldSpace (Southern Africa) (Pty) Ltd. Presentation to Select Committee on Labour & Public Enterprises – National Council of Provinces (NCOP) 29th November 2005

2. Panel • Hamza Farooqui: Managing Director: Afristar Region • Jim Myers Regulatory Consultant • Janet Mackenzie Cliffe Dekker Inc

3. Contents • Section 1 Introduction to WorldSpace and its satellite radio service • Section 2 Key regulatory considerations • Existing rights of WorldSpace • Treatment of permissions under ECB • Effect of exclusions • Suggested Amendments Section 3 Commercial rationale and conclusion

4. Introduction to WorldSpace and its satellite radio service SECTION 1

5. WorldSpace System is the only… …constellation of digital satellites capable of transmitting digital audio radio services directly to an enormous global audience • Digital satellite radio system with multi-continental coverage • Footprints cover an estimated 5 billion people • Provides a total of up to 480 channels of digital quality programming • Digital processing on-board the satellites allows radio programming to originate from anywhere

6. WorldSpace - A satellite radio company • WorldSpace founded the Satellite radio industry in 1990 and was the first to design & implement the technology to deliver satellite radio services • Satellite radio in the US has experienced tremendous growth over the past two years - only DVD players reached the 1 million sales mark faster • XM and Sirius Satellite Radio launched service in late 2001 and early 2002, respectively, and now serve approximately 8 million subscribers in North America • Satellite radio is by far the most exciting technology product that has been introduced to a global market • WorldSpace has successfully completed the ITU coordination process for the use of the L-Band spectrum for satellite radio services in all markets outside of the US WorldSpace is the only company providing digital satellite radio services outside of the US

7. Major WorldSpace milestones 1990: Company founded by Noah Samara - Vision of enabling information affluence in emerging markets - Confluence of huge demand, revolutionary personalized satellite technology and emerging regulatory receptiveness 1991 - 92: Began national licensing process for satellite system 1992: At 1992 ITU Radio communication Conference, gained global allocation of spectrum for satellite & complementary terrestrial radio services 1992 - 95: Developed technology, business plan; started ITU coordination process 1995 - 96: Established consortium of industrial and financial partners 1996 - 97: Satellite construction underway; chipsets and receiver development 1997 - 98: Built organization and prepared to launch 1999 - 2000: Launched commercial service for portable & fixed reception 2000 - Present:- Conducted 1st ever demonstrations of satellite repeater technology & developed software-based chipset for service to vehicles - WorldSpace-licensed technology brought into commercial use in the USA by XM Satellite Radio - Listed on NASDAQ in August 2005

8. WorldSpace executive summary • Unsurpassed content and distribution • Global content, 24x7 basis • Regional, “voice from home” content, by language • News, music formats on a nationwide basis • Ability to uplink content anywhere, anytime, throughout the coverage area • Up to 80 digital quality channels for home, car or portable reception • Initial focus on major markets in China, India, the Middle East, South Africa and France • Total coverage area has 5 billion people, 300 million cars • Regulatory status • AfriStar and AsiaStar completed ITU coordination and notification process • Complementary gap filler licensing and coordination process commenced in key markets • Proven, easy-to-use, low-cost technology • Over US$1.4 billion already invested to create infrastructure • Low-cost, compact receive terminals are easy to set up and use anywhere • One-to-many, scalable, addressable and encryptable digital sound service, allows cost-efficient delivery system

9. Current Status: South Africa • Johannesburg regional operations in existence since 1998 • Johannesburg uplink in existence since 1998 • Corporate responsibility – sponsored the building of a school in Orange Farm (Freedom Park Primary), sponsored the ODL (Open Distance Learning) conference – All Africa Ministers Conference in Cape Town • Free-to-air service launched in 1999, with 40,000 receivers currently in Southern Africa • Regulatory environment: broadcasting and signal distribution licensing applied for, and ICASA in the process of licensing satellite broadcast services [in terms of sections 4 & 34 of the Broadcasting Act] • 82 key retailers in Johannesburg, Cape Town, Durban, Pretoria, Port Elizabeth and East London, together in partnership with Elsat • Mobile (in-car) satellite radio service introduction planned for 2006

10. Key regulatory issues to be addressed SECTION 2

11. Existing rights of WorldSpace • WorldSpace (Southern Africa) (Pty) Ltd. is controlled by WorldSpace, Inc., a US company • Permission to provide a satellite broadcasting service – S4(1)(a) of the Broadcasting Act • Permission to provide channels in respect of a broadcasting service – S4(5)(a) of the Broadcasting Act • Permission to provide a broadcasting signal distribution service – S34(1)(a) of the Broadcasting Act • ICASA was to put into place the regulatory framework for subscription broadcasting services before converting permissions into licences and has been busy with this process since March 2003

12. Treatment of permissions under ECB • S92(5) of the ECB safeguards existing rights under the Telecommunications Act, Broadcasting Act and IBA Act • Persons who have been granted permissions under existing legislation will not be licensed in terms of the transitional provisions of Chapter 15 of the ECB • Permission holders will have to be licensed in terms of Chapter 3 of the ECB

13. Effects of the exclusion • Permission holders will be subject to a different licensing process to all other entities currently providing services under existing legislation • Permission holders will be subject to licensing processes and licensing terms and conditions which are potentially more onerous • Permission holders are likely to be faced with licensing delays • In some instances, a deprivation of rights may occur (i.e. where an individual communications network service licence is required for a broadcasting signal distribution service) • Permission holders will not be able to make use of broadcasting signal distributors until they are licensed – S62(2)(b) of the ECB • Permission holders will not be able to interconnect their services until they are licensed – S37(1) of the ECB • Permission holders will not be able to enter into facilities leasing arrangements until they are licensed – S43(1) of the ECB • The effect of the ECB is to unconstitutionally nullify and deprive permission holders of their existing rights

14. Suggested amendments • Reference must be made to permissions and permission holder’s rights granted under the Broadcasting Act in : - Section 92 (5),(6) - Section 93 (1) – (11) - Section 62 (2) (b) • Detailed amendments have been provided in our written submission to the NCOP

15. Commercial rationale and conclusion SECTION 3

16. Commercial rationale and conclusion • WorldSpace satellite infrastructure covers Europe, middle East, Africa and Asia. • Relationship with XM satellite Radio brings best of breed technology, products and services • WorldSpace four channels to XM and distributes over 70 channels in its own network • XM which uses WorldSpace technology have distribution partnerships with General Motors, Honda, Toyota, Hyundai, Nissan, VW/Audi, Porsche, Kia, Suburu and Suzuki. • Subscription take up rates indicate that by the end of 2005, subscriber numbers should exceed 6 million.

17. Commercial rationale and conclusion • WorldSpace invests in local countries through: - physical infrastructure facilitating up and down links - offices providing sales, marketing and maintenance support - staff and facilities for adding local content to channels for global distribution - creating on the ground skills transfer and development • WorldSpace offers local country artists and personalities global exposure - Satellite radio is credited with much of the responsibility for the popularity of Latin American music in North America - Facilitate the niche music category creation, distribution and popularity • WorldSpace recently announced a US$150 million investment in India to grow presence in that market • WorldSpace requires the basic infrastructure previously described to provide this service, together with a stable and predictable regulatory framework

18. Commercial rationale and conclusion • Foreign investment • Job creation • Global exposure for South African artists and personalities that could not be achieved in any other manner • Additional revenue for the government through revenue generated locally from subscription services • Build up and rollout of cutting edge technology in a country, together with inter-related industries such as automobile sector with substantial value add opportunity • In conclusion, WorldSpace seeks the assistance and support of this body to assure these opportunities become reality in South Africa.

19. Thank you

20. Questions and Answers