Net1 International Holdings AS. Presentation for NOTC October 2018

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Austin Ross
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1 Net1 International Holdings AS Presentation for NOTC October 2018

2 About Net1 International Holdings AS ( Net1 International ) Overview } Net1 International s strategy for its emerging markets is to utilize the experience from the Scandinavian MBB operations on the 450MHz spectrum } Primary strategy to provide 4G mobile broadband on the 450MHz frequency band to customers in suburban/rural areas where the internet access are speeds are sub-optimal or non-existent } Net1 International believes there is significant value appreciation potential for the frequencies as there is only one 4G licence for the 450MHz in each country - Net1 Intern l investments have perpetual licences in both countries } The build-out of the network will be done in cooperation with local partners. Corporate timeline Focus on 450MHz spectrum } Net1 International s strategy focuses exclusively on data transmission on the 450MHz frequency band } Low frequencies offer substantial benefits with respect to higher frequencies - Geographical coverage per site - Advantage on network capex and opex - Advantage on penetration of buildings } The technology is well suited for covering large rural areas as well as offering wireless broadband at low costs. 450 MHz 900 MHz 2,100 MHz 2,600 MHz Apr-15 Raised new equity to fund expansion Nov-15 Closed the entry into the Philippines May-16 Regulator in Indonesia announces intention to award tech neutrality Jun-17 Selective commercial launch in the Philippines H2 17 Entered into Brazil Aug-18 Ice Group International becomes Net1 International Q1 15 Entered into agreements to enter Indonesia and the Philippines Sep-15 Raised subordinated capital to fund expansion Dec-15 Closed the entry into Indonesia Nov-16 Secured additional 2x1.25 MHz of 450MHz spectrum in the Philippines, and tech neutrality in Indonesia H1 17 Roll-outs and commercial launch Q1 18 Divested Brazil at a gain to original investment 2

450MHz is ideal for emerging markets and rural areas 450MHz is highly attractive for data in rural areas } The transmission of mobile data over low frequencies offer significant capex and cost

3 450MHz is ideal for emerging markets and rural areas 450MHz is highly attractive for data in rural areas } The transmission of mobile data over low frequencies offer significant capex and cost advantages relative to higher frequencies Benefits of 450MHz compared to higher frequencies Geographical reach of different frequencies (illustrative) } This makes 450 MHz well suited for wireless broadband offerings in rural areas and in emerging markets - Indonesia and Philippines have a significant number of islands 450 MHz } To date, the focus for Net1 International has been to launch a LTE mobile broadband network in rural areas that are characterised by a lack of fixed line internet access 900 MHz 2,100 MHz 2,600 MHz } The Company has achieved a successful proof of concept following the soft launch - The subscription base consists of multiple users in largely rural areas and/or less urbanised areas that are characterised by low fixed-line penetration - Multiple users sharing a single SIM (up to 5-10 users per SIM) # of base stations required to cover same are as one 450MHz BTS Extreme: - Sea - Dessert- - Mountains Net1 Intern l area: - Metropolitan areas - Rural areas - 120km offshore Main stream: - Metropolitan areas - Rural areas Longer reach Lower capex Lower opex 3

Present in markets that are attractive for MBB roll-out Indonesia The Philippines Cooperating with local partner Sampoerna Telekomunikasi Indonesia Local partner is Broadband Everywhere - A spin off

4 Present in markets that are attractive for MBB roll-out Indonesia The Philippines Cooperating with local partner Sampoerna Telekomunikasi Indonesia Local partner is Broadband Everywhere - A spin off of Textron Corporation In Philippines Population ~261m ~104m GDP per capita (PPP) ~USD 12,400 ~USD 8,200 GDP growth ~5.1% ~6.7% Total subs in market ~371m ~119m Key players* Telkomsel (53%), Indosat (30%), XL (14%) Globe (51%), PLDT (49%) Fixed line penetration 1.9% 5.5% Mobile subscr. penetration 149% 109% Net1 International band-with 15MHz (450MHz) 15MHz (450MHz) 20MHz (3.5GHz) Net1 International share of below 1GHz spectrum 15% ~13% USD/MH/POP invested ~USD 0.1 ~USD 0.1 Technology LTE/4G LTE/4G License duration Perpetuity Perpetuity Total investment ~USD 100m ~USD 25m Sources: Cia World Factbook; 4

5 Net1 International has a significant share of <1 GHz spectrum Indonesia The Philippines Spectrum overview by operator (MHz) Spectrum overview by operator (MHz) Smart Globe Ice 5

6 Business Developments } Indonesia Indonesia 580 LTE 450Mhz sites installed to date; and expected to pass 600 sites by year-end. Site installation has focussed on the key islands of Java and Sumatra, with more than two thirds of the network deployed there. The mobile broadband product was launched into distribution channels in H1 2018, and has already received traction with >25,000 very high ARPU subscribers signed up within a matter of months. Recent tower disposals have led to business being debt-free except for around $3m of debt (at H1 2018). } Philippines Over 50 LTE sites on 450Mhz band (at H1 2018) providing a sound coverage starting point, with coverage focussed around metro areas. Further site roll-out planned via deployment of 3.5Mhz frequency, supplementing the existing 450Mhz coverage. Lean cost base and fully funded for foreseeable future, with a cash balance on hand to fund the next 18 months of cash consumption. 6

7 Management with long experience within 450 MHz sphere Group management JD Fouchard Chairman of the Board CEO of ice Group since 2011, and Director of the Asian subsidiaries Instrumental in AINMT s acquisition of ice, and lead the acquisition of high demand spectrum in Norway Lead the Company s expansion into emerging markets Local MDs Larry Ridwan MD Indonesia Joined STI as CEO in 2015 Previous CCO at Bolt Super4G, CFO at First Media, Head of Mass Segment and Head of Business Planning at Citibank Indonesia Linus Jönsson Amit Vithlani CEO Joined Net1 Sweden in October 2012 as the CEO Led Net1 into positive EBITDA by 2014, and delivered a peak EBITDA of SEK 56m in 2016 Supervised the network swap from a CDMA 450 network to a 450LTE network in 2015 CFO Previously Executive Head of Corporate Finance at both Smile Telecoms and Cell C; Board Member of Fibreco. Advised on the sale of Zapp, Romanian 450MHz operator and one of the largest in Europe at the time, by Saudi Oger Responsible for certain debt funding initiatives globally Beatriz Padilla MD Philippines Joined BE in 2017 as CEO Previously CEO of Citadel Shipping Services and Textron Inc Over 25 years experience in corporate finance, general management, and business development Management experience - 450Mhz Operations } Management team with very successful experience with 450MHz operations; } Achieved 20% EBITDA margins in highly saturated Scandinavian markets via operators utilising 450Mhz spectrum; } Conducted a detailed study in Brazil to roll-out a 450MHz network to provide traffic offload; } Concluded sale of a 450MHz network in Romania which yielded a positive return for its investors. 7

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