Sentech is ready to deliver on its mandate and meet the challenges of rapid technological advancement, the digital era and the advent of mobile devices capable of transferring content that can no longer be controlled by broadcasters, says acting chairman Paris Mashile.
The state signal distributor presented its strategic plan for the period 2011/12 to 2014/15 to the Parliamentary portfolio committee on communications last week.
Budgeted revenue for the 2012/13 fiscal year is R971.7 million. Operating costs are expected to be R797.1 million. After-tax earnings for the year are R58.7 million. The budgeted total asset value is R1.9 billion and total liabilities are R883.5 million. An investment of R689.2 million will be made in property, plant and equipment acquisitions.
Sentech identified its key strategic focus areas as customers and stakeholders, infrastructure, solutions and interventions, employees, sustainability and governance.
Treasury approval
The entity says it will continue its strategy of exiting the retail sector of the broadband market. Its flagship projects are digital terrestrial TV (DTT) and the National Wireless Broadband Network (NWBN).
The DTT project has specific targets and tight deadlines, and available resources will be concentrated on the rollout of the infrastructure network.
The original NWBN business plan submitted in 2008 had been revised but implementation of the plan is subject to funding approval by the National Treasury.
Cost-effective access
Democratic Alliance (DA) shadow communications minister, Marian Shinn, pointed out that Sentech had indicated sufficient funding for the dual-illumination portion of the DTT project was not available, but had expressed confidence that dual-illumination would commence in September, as scheduled.
Sentech CEO Setumo Mohapi explained that Sentech had attempted to provide universal access in the most cost-effective manner. The coverage plan is not new and does not require additional costing.
Sentech's capital expenditure for DTT is fully-funded. The dual-illumination phase is fully funded for the second and third years of the medium-term expenditure framework period, but there is a shortfall for the first year.
Members enquired about set-top boxes (STBs) for DTT because the agreement on the technical specifications has not been reached and a period of nine months is required before the boxes can be manufactured.
Mohapi suggested the committee refer questions about the STBs to the Department of Communications (DOC). He said the technical standards had been finalised and the public participation process is under way. The closing date for comments is the end of May. Mohapi is confident Sentech will be able to handle any type of launch of DTT by the DOC.
Self-sustainable
Shinn said the DOC would be transferring an amount of R925 million to Sentech in 2012/13. She asked where government funding was reflected in the company's financial statements.
Sentech said the government grant was made available for Sentech to cover the cost of providing an additional broadcasting channel. Most of the R925 million made available was for capital expenditure to provide the necessary infrastructure. R832 million will be spent on upgrading existing infrastructure and providing new infrastructure. The income statement only reflects the dual-illumination portion.
Shinn asked if Sentech is currently self-sustainable. Sentech said it is a schedule-three entity and has to be financially sustainable. Revenue is not transferred to the National Treasury and the organisation does not receive any funding from the state.
There has been an increase in the amounts written off but this is from a very low base, according to the entity. The write-offs are for obsolete, broken and stolen assets. Previously, Sentech had used a basic stock-counting process. An asset verification process has been introduced and the amount of write-offs is expected to increase by 360%.
Botswana piracy
Shinn also said the briefing omitted mention of the court case regarding the spill-over of broadcasting signals into Botswana.
The matter concerning the signal spill-over into Botswana is extremely complex, according to Mohapi. Sentech is awaiting reasons for the judgement and appealing it.
He added that the budget includes a contingency amount for legal fees. The board has appointed a social and ethics committee to provide leadership on fraud prevention and governance. A risk officer has been appointed and is responsible for dealing with all the risk factors identified, including incidents of fraud.
School access
Members also asked for more information on the Dinaledi schools project.
Mohapi said the Provincial Departments of Basic Education identified the schools under the Dinaledi project. Sentech works with the provincial departments on the project, to provide free connectivity to the schools.
To date, it has provided infrastructure for schools in Gauteng and the Free State, and the programme is being expanded to the other provinces.
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