Consumer Issues Relating to Cellular Services Talaat Laham CEO & Chairman 5 November 2002

Consumer Issues Consumer Issues Relating to Relating to

Cellular ServicesCellular Services

Talaat LahamCEO & Chairman 5 November 2002

Consumer Issues Relating to Cellular Service 2

sAgenda

• Company Overview

• Quality of Service

• Customer Care

• Tariffs

• Challenges

• Conclusion

Consumer Issues Relating to Cellular Services


Company Overview – Saudi Oger

100%

Saudi OgerSaudi Arabia

CellSAf

Multiple South AfricanOrganizations100%

40%60%

Oger TelecomSouth AfricaHoldings Ltd.

Bermuda

Cell C“Opco” [The Licensee]

Oger Telecom(South Africa)

Border90%

100%

Cell C Service Provider Company (Pty) Ltd

3C Telecommunications“Holdco”

100%

Cell C

Prop Co

100%


Saudi Oger• Privately run conglomerate• Operations in the Middle East, Africa and Europe• Top tier contractor for the construction, operation and maintenance

of complex infrastructure and facilities projects in the Middle East • Projects worth over $20bn+ over the past 20 years• Also runs operations covering shipping, transportation, banking

and telecommunications • At December 2001, had equity & retained earnings of >$1bn &

>28,000 employees globally• In 2002, SO’s shareholders transferred $220 million of assets into

the business as part of a general recapitalisation


Company Overview - CellSAf

• Historically disadvantaged persons own 40% of the company• CellSAf is formed from more than 30 BEE groups

Black owned investment and

technology groups

CellSAf (Pty) Ltd

Women owned investment and technology groups

Rural development trusts, SMME and informal business

Education and training

Regional investment and technology groups

SocialEmpowerment

Groups

51.25%

8.75% 3.75%

16.25%

5%

15%


Company Overview - Who we are?• We are a South African incorporated company,

practising true empowerment

• We are a significant player in the South African economy:

• creating innovative employment opportunities and contributing to skills development in the country

• using preferential procurement practices

• setting and meeting tremendous growth targets

• We boast a diverse, multicultural, multi-disciplined workforce


Company Overview - Who we are?

• We are a consumer champion, offering:

• flexible packages tailored to the needs of various target segments in the market

• innovative, quality products and services at affordable prices


Company Overview - Employment EquityTotal Cell C Operator & Service Provider Permanent Full Time Employee

(FTE)

Coloured17%

African41%

Indian17%

White25%

African

Coloured

Indian

White

Over 75% of our staff comprise of previously disadvantaged individuals and span all areas of management

September 2002


Company Overview – Milestones Achieved

• Feb 16, 2001 Licence awarded by Minister

• Jun 25, 2001 Service licence issued by ICASA

• Aug 3, 2001 Spectrum licence issued by ICASA

• Nov 17, 2001 Commercial Launch

• Nov 17, 2001 Pre-paid Launch

• Dec 11, 2001 Post-Paid Launch

• Dec 21, 2001 E-GSM frequency band awarded

• Sept 13, 2002 Community Service Telephonestariff has been approved

• Nov 5, 2002 More than 970 000 Subscribers


Agenda

Company Overview

• Quality of Service

• Customer Care

• Tariffs

• Challenges

• Conclusion



Quality of Service - Is Our Differentiator

• The South African mobile sector is highly competitive, more so since our entry into the market

• The South African consumer is discerning and expects high levels of quality

• It is therefore in our interest to offer the highest levels of quality


Quality of Service – Our Policy

• We aim to provide products and services of superior quality to our customers

• We pursue quality excellence in all areas of our organisation

• We continually benchmark ourselves against international best practices


Quality of Service – Our Standards

• Our licence prescribes the following targets: Network Availability to be at least 95%

Call Completion Rate to be at least 95%

Call Blocking to be less than 2%

Call Quality to meet ETSI standards

• Our network performance is subject to

independent audit and is periodically

reported to ICASA


Quality of Service – Network Monitoring

• The network is monitored on a 24-hour basis by our Network Management Centre

• Daily tests are performed on systems for preventative and corrective action

• Maintenance is planned and performed to ensure the least disruption to service

• We have invested in world-class test and measurement technology to maintain international standards


Quality of Service – Network Coverage

• Since our launch Cell C has offered national coverage via a roaming agreement with Vodacom – this is a first for South Africa

• Cell C is the first dual band cellular operator in SA

• The 900 MHz band is almost fully utilized in urban areas by the other operators. We are rolling out our own urban network using the 1800MHz band, which provides more capacity hence less congestion for the customer

• Cell C is using the 900 MHz band in rural areas to achieve cost-effective coverage over larger areas


Quality of Service – Coverage Principles

• We use the Siemens GSM/GPRS 900/1800 platform

• We are aiming for 2500 base stations by the end of 2003

• We have focused our rollout on key metropolitan areas

• Coverage is provided by Vodacom sites in areas where we are still in the process of rolling out sites

• Our base station sites comply with industry regulated

electro-magnetic emission and compatibility standards


Quality of Service – Coverage Locations

Site locations are selected based on

• Licence requirements to cover 8% of the territory and 60% of the population within 5 years of commercial launch

• Exclusion zones as per roaming agreement with Vodacom

• Populated areas in rural South Africa

• Roads and access points to towns and cities


Quality of Service - Dropped Calls

• Dropped calls are a reality in GSM networks worldwide

• We are equipped to monitor and manage the dropped call rate on a continual basis

• Engineering teams are trained to use best practices for investigating and solving dropped calls

• Our dropped call rate meets internationally accepted norms


Quality of Service - Reducing Dropped Calls

• We experience dropped calls for two main reasons:

low signal strength

external interference

• We can reduce dropped calls by:

Rolling out base stations without unnecessary delays

Operating without radio interference


Agenda

Company Overview

Quality of Service

• Customer Care

• Tariffs

• Challenges

• Conclusion



• Our customer service Code of Conduct is approved by ICASA

• It is available to all customers by telephone, as well as on our website

• Confidentiality of customer information is sacred

• Our Customer Call Centre operates 24-hours and aims to resolve queries and complaints

Customer Care – Our Code of Conduct


• Our customers can expect informed advice and assistance from qualified staff on:

The choice of package best suited to their needs

Instructions in the operation and maintenance of handsets and selection of value-added services

Information regarding prices and terms and conditions in accordance with which the service is provided

Customer Care – Advice and Assistance


• All our customers are important to us, therefore:

• We provide products and services that offer simplicity, choice and value

• We are committed to providing superior customer service support

• We invest in staff training in these critical areas: customer care products and services GSM technology

• All calls to the Call Centre are recorded and monitored for service quality purposes

Customer Care


Customer Care – Multi-lingual service

• We employ multi-lingual staff at our Call Centre

• The many languages spoken by our Call Centre agents is a differentiator of which we are proud

• We are striving to ensure that our services are available in each one of the 11 official languages


Customer Care – Please Contact Us

• Our Call Centre can be reached by dialling 140 toll-free on a Cell C mobile

• Or by dialling 084 140 from any other mobile or fixed line

• Anyone can send a query via email to: [email protected]

• We have voluntarily registered as a corporate member of the consumer watchdog website, www.hellopeter.com


Agenda

Company Overview

Quality of Service

Customer Care

• Tariffs

• Challenges

• Conclusion



Tariffs - Our Value Proposition• Provision of lifestyle enhancing cellular services based on:

SIMPLICITY CHOICE VALUE

• Uncomplicated tariff

• Per second billing on all tariffs (60/1, 30/1 or 1/1)

• All day R2 flat rate on pre-paid

• Choice of lifestyle taylored tariffs & Value Added Services

• Choice of Friends and Family Members

• Choice of contract lengths – 1,12,24 months

• Packages with and without inclusive minutes

• All day R2 flat rate

• Discount on frequently used numbers

• Discount on Cell C to Cell C calls

• 5 Free Call me back SMS’s per day

• Per second billing (60/1, 30/1 or 1/1)

• Discount on international calls

• Upfront voucher bonus minutes

• Moonlight period


Tariffs – Some Key Benefits

• All our tariffs include Per Second Billing at no premium to the standard tariffs

• Based on usage analysis, a tiered approach includes Per Second Increments after 60s, 30s, or 1 second depending on the chosen package

• A 10% discount applies when dialing pre-selected “Friends and Family” numbers

• Flat rate tariff of R2 per minute is the lowest available in the prepaid market and customers can receive incoming calls for as little as R5 per month.


Tariffs – Post Paid Summary

Casual ChatCasual Chat

100Active Chat

Active Chat 100

Business Chat 400

Business Chat 700

Business Chat 1000

Contract Lenghth 1 Month 1 Month 24/12/1

Connection Fee 94

Minimum Turnover 78 58 N.A. N.A. N.A. N.A. N.A. N.A.

Monthly Fee N.A. N.A. 84 128 238 560 980 1400

Included Minutes N.A. N.A. 100 (Off-peak) N.A. 100 400 700 1000

peak 2,60

off peak 0.84

peak 2,00

off peak 0,90

peak 1,60

off peak 0,80

peak

off peak

peak 1,44

off peak 0.70

night 0.60

Friends&Family (4N)

60/1

7-20

Included/month 20

peak 0,75

off peak 0,25

1,65 + (Telkom - 20%)

0,75 + (Telkom - 20%)

N.A.

BusinessChat

24/12/1

94

N.A.

0.75

1.41

0.84

1.24

1.24

0.80

0,25

30/1

7-20

N.A.

0,75

Active Chat

94

VAT included

Wit

hi

n N

WP

ST

N 1.70

0.84

1.85

0,90

2.00

Billing increment

Clu

b

Ch

at

Club Chat

Casual Chat

Ou

ts.

NW

0,90

1.60

2.60

0.84

0.80

-10% on peak call charges (except Club Chat peak)

2,00 + (Telkom - 10%)

0,84 + (Telkom - 10%)

1,85 + (Telkom - 10%)

0,84 + (Telkom - 10%)

24/12/1

94

N.A.

Peak hours

Inte

rn

atio

nal

N.A.

7-20

1.60

0.80

60/1

SM

S

N.A.

0,75

0,25 0,25

1/1

7-20

N.A.

0,75


Tariffs – Pre-Paid Summary

Easy ChatStandard

Easy ChatAll Day

peak 2.70

off peak 1.35

peak 2.70

off peak 1.35

peak 2.40

off peak 1.20

International outgoing

Friends&Family (2Numbers)

peak 0,75

off peak 0,25

10% on peak AND off peak

60/1

3 zones: R5, R10, R15

0,50

VAT included

Cell CEASY CHAT

PS

TN

Lo

c./

Na

t.

Wit

hin

NW

Billing increment

SM

S

7-20Peak hours

Ou

ts

.

NW

2.00


Agenda

Company Overview

Quality of Service

Customer Care

Tariffs

• Challenges

• Conclusion



Challenges

We require the assistance of the Portfolio Committee on Communications


Challenges - Constraints

The frequency bands assigned to Cell C are encumbered with legacy government and industry operators and/or illegal cordless systems.


Challenges - Interference

Where we experience interference it:• Degrades call quality, producing:

Poor call processing (call set up failure, dropped calls, failed handovers)

Poor speech quality (breaking up of voice)

• Hinders the performance of next generationservices ie GPRS, by:

Constraining data throughput Restricting data reliability


Challenges – Action Needed

The following actions, if expedited by Parliament would result in better cellular service for our customers:

• Migration of all legacy systems in accordance with radio frequency band plans i.e. SABRE

• Budgetary provision for cost of migrating legacy systems

• Effective mediation between concurrent users of the frequencies prior to migration


Challenges – Site Approval DelaysWe are governed by the following legislation with regard to base station site approvals:

Local Authority (“LA”)• Town Planning & Townships Ordinance 15 of 1986• National Building Regulations and Buildings Standards Act 103 of 1977• Municipal System Act 32 of 2000Environmental Provincial Department (“EPD”)• Environmental Conservation Act 73 of 1988• Regulations contained in Government Notices R 1182, 1183 and 1184 of 1997

promulgated in terms of sections 21, 22 and 26 of the Environment Conservation Act (Act no. 73 of 1989)

• EIA guideline document: Department of Environmental Affairs and Tourism. 1998. Guideline Document. EIA Regulations. Implementation of Sections 21, 22 and 26 of the Environment Conservation Act. Pretoria. Department of Environmental Affairs and Tourism

Civil Aviations Authority • Civil Aviations Act


Challenges – Site Approval Delays

Our site approval process is delayed by:

• Cumbersome and conflicting administrative processes

• Unnecessary use of consultants and experts

• Lengthy advertisement process

• Lengthy and unstructured public participatory process


Challenges – Other Delaying Factors

• Disparate policies and legislation between the local, provincial and national authorities

• Conflicting approval conditions and processes between the local and provincial authorities

• Lack of clarity on type, validity and significance of objections that may be lodged within the public participatory process


Challenges - Approval delays

Environmental Impact Assessment Time Frame Analysis

0

20

40

60

80

100

120

140

JHB PTA DBN WCP

Regions

Day

s

Number of application received after 90 days Number of application received after 120 days Number of Applications outstanding post 120 Days


Local Authority Approval Time Frame Analysis

0

10

20

30

40

50

60

70

JHB PTA DBN WCP

Regions

Day

s

Number of application received after 90 days Number of application received after 120 days

Number of Applications outstanding post 120 Days

Challenges - Approval delays


A prime example of factors contributing to APPROVAL DELAYS

Public Objections to all 6 alternative site

options including site sharing. Issue still

pending

Construction of permitted site

stopped due to public objection

Site cancelled

after two years of site acquisition problems owing to irresolvable

conflicting permit issues between LA

and DACEL

Site stopped due to conflicting

permit issues and public objection

received


Challenges - Recommendations

Establishment of a National Environmental Legislative framework that:

• Reinforces the essence and purpose of the National Environmental Management Act.

• Supports a harmonised approach to the creation of policy and legislation at all levels of government.

• Promotes co-operation between Local Authority and the Provincial Authority


Challenges - Recommendations

• Establishing criteria for assessing the significance of the type and validity of objections received within the public participatory process.

• Formulating a national legislative framework that allows for a uniform approach to authorisations in the Cellular Industry.

• Facilitating our network rollout process thereby improving the quality of service given to the consumer


Agenda

Company Overview

Quality of Service

Customer Care

Tariffs

Challenges

• Conclusion



Conclusion

• We are committed to providing a high quality network to our consumers

• Our potential to provide even better service is inhibited by the lack of interference-free spectrum and a coherent and speedy site approval process

• Your assistance in meeting these objectives is crucial to reduce delays in achieving the national communications objectives


Agenda

Company Overview

Quality of Service

Customer Care

Tariffs

Challenges

Conclusion

Cell C celebrates its first birthday on 17 November 2002

THANK YOU!

Documents

Consumer Issues Relating to Cellular Services Talaat Laham CEO & Chairman 5 November 2002