Transcript Statement of Financial Position

Statement of Financial
Position
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Statement of Financial Position
2010
R'000
2009
R'000
Non- current assets
Current assets
Total Assets
739,403
975,439
1,714,842
584,010
934,855
1,518,865
Equity
1,637,352
1,383,867
Non - current liabilities
Current liabilities
Total liabilities
Total Equity and Liabilities
77,490
77,490
1,714,842
10,162
124,836
134,998
1,518,865
The current ratio improved significantly from 7.5 to 12.6 due to incremental equity
funding and settlement of the Eskom creditors account.
Broadband Infraco received funding of R208 million (cumulative total of R1,213 million)
from the Department of Public Enterprises during the financial year.
The Industrial Development Corporation (“IDC”) contributed funds of R73 million
bringing their total equity to R426 million to retain their 26% shareholding in the
company.
Total capital expenditure spent in FY 2009/10 amounted to R245 million.
Slide 1
Cash Flow Statement and Funding
Statement of Cash Flows
Net cash generated by operations
Net cash increase for the year
Cash and cash equivalents at the end of the year
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2010
R'000
102,376
138,840
851,774
2009
R'000
46,098
661,914
712,934
Broadband Infraco had sufficient equity funding to meet all of its capital and operating
expenditure obligations during the reporting period (no need for debt).
Approximately 87% percent of the current year’s equity contributed was used to fund
network capital expenditure and other working capital requirements of the
organisation during the year.
The remainder of the funding contributed was invested in market linked investments
in three different financial institutions in accordance with the company’s Investment
Policy.
Broadband Infraco generated cash totaling R50.6 million (2009: -R2.7 million) from
operations during the year.
Broadband Infraco earned interest totaling R61.7 million (2009: R55.3 million) during
the year.
Slide 2
Priorities for FY 2010/11
Slide 3
Main Priorities for FY 2010/11
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National Business Unit
– Establishing Network Operations Capability
– Execution of the Commercial Launch Program
– Staffing and Human Capital Development
– Diversification of the Broadband Infraco
Customer Base
– Network Build Programme Execution
– Development of a Framework and Business Model for Providing Long-distance
Backhaul Services to Underserviced Areas
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International Connectivity Mandate
– Ongoing development of the Broadband Infraco international business unit and
ongoing participation in the WACS project development to realise the objectives
of the company’s international connectivity mandate
Slide 4
Network Infrastructure Roadmap – FY2010/’11
• Network Meshing for improved service
quality
• Links to the East and West coast submarine
cable landing stations
• 3rd route to Polokwane
• IP Core rollout
• 4 more open access POPs
• SALT / SKA
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Commercial Launch
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Broadband Infraco will be launching on 18 November 2010
Customers can connect to the network in three ways:
– Open Access POPs at data centres
Gauteng - Teraco Isando, Neotel Midrand, BCX Midrand
Cape Town - Teraco Rondebosch
Durban - IS Umhlanga Rocks
– Directly at other Broadband Infraco LD service sites
– via Neotel as middle and last mile connectivity provider at co-located LD sites
Broadband Infraco is in the process of:
Establishing more POPs (in Pretoria, Durban, Cape
Town & Mtunzini)
Implementing service protection capability
Operations & maintenance enhancements
Slide 6
Commercial Launch Update
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Broadband Infraco has achieved the following key milestones in preparation
for commercial launch purposes:
Network Testing & Trials
Key Milestones
31 AUG
30 SEP
30 OCT
18 NOV
5x POPs in Cape Town,
Durban & Gauteng
Trails Capacity Upgrade
Network Optimisation
(PHASE ONE)
SOFT LAUNCH
Start Network Trials
Capacity Upgrade
Network Optimisation
(PHASE TWO)
Final network fine
tuning & preparations
LAUNCH
Complete
Complete
Complete
Complete
On track
On track
Other key actions & progress
Status
Products & Services Catalogue
Ready for launch
Pricing Model
Ready for launch
Legal Framework & Service Agreements
Ready for launch
Product tariff filing with ICASA
Ready for launch
Network Operations
Ready for launch
Call Centre Operations
Ready for launch
Business Processes Implementation
Business Process Testing
Ready for launch
Billing, Invoicing & Collections
Ready for launch
Formal Launch Notifications
Ready for launch
Public Relations
Ready for launch
Marketing
Ready for launch
Slide 7
Broadband Infraco will provide POPs and connect 37
Underserviced Areas to the long distance network
Broadband Infraco has identified 37 underserviced areas in collaboration with ICASA and
USAASA. Broadband Infraco will establish POPs and connectivity to the long distance
network in each of these areas within the next 7 years.
C
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Drivers
• Improve availability
• Lift the capacity
bottleneck
• Open access
carrier of carrier
model
• Reduces cost of
investment for
other carriers and
service providers
• Allows others to
focus investment in
the access and
services layers
Slide 8
Market Update
Slide 9
Market Update Summary
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National connectivity
– Capacity:
• Broadband Infraco has increased the available capacity and reach of
national long distance networks in South Africa
• Other build projects by the private sector include:
– Tribuild (Neotel, MTN & Vodacom)
– Dark Fibre Africa
– Newly introduced Fibre Co (IS, CellC & Convergence Partners)
– Wholesale pricing has already decreased by approximately 65%
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International connectivity
– With all the new undersea cables connecting to South Africa on the East and
West coast of the continent there is projected to be adequate international
capacity for the foreseeable future
– International connectivity pricing has already decreased by some 70% (with more
capacity to come online through WACS in 2011)
Slide 10
Summary & Conclusion
The company is vigilant of the changes occurring in the national and
international wholesale markets both from an oversupply of capacity
and price reduction perspective
Strategic initiatives are planned for the current financial year to
position Broadband Infraco to deliver on its mandate and support the
Government objective of lower costs for long distance
telecommunication services in South Africa
Our strategic goal remains for Broadband Infraco to become the
wholesale supplier and service provider of choice for our existing and
future customer’s national and international long distance
connectivity needs
Slide 11
Thank you
Slide 12