Many of the statements included in this annual report, as well as oral statements that may be made by us or by officers, directors or employees acting on
behalf of us, constitute or are based on forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995,
specifically Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, including, among others, statements regarding our future financial position and plans, strategies,
objectives, capital expenditures, projected costs and anticipated cost savings and financing plans, as well as projected levels of growth in the communications
market, are forward looking statements. Forward looking statements can generally be identified by the use of terminology such as ""may", "will", "should",
"expect", "envisage", "intend", "plan", "project", "estimate", "anticipate", "believe", "hope", "can", "is designed to" or similar phrases, although the
absence of such words does not necessarily mean that a statement is not forward looking.
These forward looking statements involve a number of known and unknown risks, uncertainties and other factors that could cause our actual results and
outcomes to be materially different from historical results or from any future results expressed or implied by such forward looking statements. Among the
factors that could cause our actual results or outcomes to differ materially from our expectations are those risks identified in Item 3. "Key Information
Risk Factors", including, but not limited to our ability to execute on our mobile strategy and changes thereto, increased competition in the South African
telecommunications market; developments in the regulatory environment; the significant political, economic, regulatory and legal risks associated with
Vodacom's and Telkom's investments outside South Africa; continued mobile growth and reductions in Vodacom's and Telkom's net interconnect margins;
Telkom's and Vodacom's ability to expand their operations and make acquisitions and investments in other African countries; our ability to improve and
maintain our management information and other systems; our ability to attract and retain key personnel; our inability to appoint a majority of Vodacom's
directors and the consensus approval rights at Vodacom may limit our flexibility and ability to implement our preferred strategies; Vodacom's continued
payment of dividends or distributions to us; our negative working capital; continuing rapid changes in technology and delays in the implementation of new
technologies; our ability to reduce high rates of theft, vandalism, network and payphone fraud and lost revenue to non-licensed operators; health risks related
to mobile handsets, base stations and associated equipment; risks related to our control by the Government of the Republic of South Africa and major
shareholders and the South African Government's other positions in the telecommunications industry; the amount of damages Telkom is ultimately required
to pay to Telcordia Technologies Incorporated; the outcome of regulatory, legal and arbitration proceedings, including tariff approvals, and the outcome of
Telkom's hearings before the Competition Commission and others; any requirements that we unbundle the local loop, our ability to negotiate favorable terms,
rates and conditions for the provision of interconnection services and facilities leasing services or if ICASA finds that we or Vodacom have significant market
power or otherwise imposes unfavorable terms and conditions on us; our ability to implement and recover the substantial capital and operational costs
associated with carrier pre-selection, number portability and the monitoring, interception and customer registration requirements contained in the South
African Regulation of Interception of Communications and Provisions of Communication-Related Information Act and the impact of these requirements on our
business; Telkom's ability to comply with the South African Public Finance Management Act and South African Public Audit Act and the impact of the Municipal
Property Rates Act; fluctuations in the value of the Rand; the impact of unemployment, poverty, crime, HIV infection, labor laws and labor relations and
exchange control restrictions in South Africa; and other matters not yet known to us or not currently considered material by us.
We caution you not to place undue reliance on these forward looking statements. All written and oral forward looking statements attributable to us, or
persons acting on our behalf, are qualified in their entirety by these cautionary statements. Moreover, unless we are required by law to update these
statements, we will not necessarily update any of these statements after the date of this annual report, either to conform them to actual results or to changes
in our expectations. |
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