Vodacom

5 Reputation

Strategy

Reputation

Maintaining a positive reputation is key to managing the critical relationships that we depend on to create value (click here). Building on the substantial societal benefits of our core business activities through focused partnerships and investments form an important part of maintaining our strong reputation.

Our strategic targets

Proactive engagement with government and stakeholders to ensure achievement of each country’s broadband goals and contribute to initiatives that make a positive impact on societies.

Clear reputation leadership among telcos in all markets.

Our performance in 2016

How we’ve done in our annual Reputation Survey

Maintaining a positive reputation is key to managing the critical relationships that we depend on to create value (page 16). Building on the substantial societal benefits of our core business activities through focused partnerships and investments form an important part of maintaining our strong reputation.

Maintaining reputation leadership

We use our annual Reputation Survey conducted with key internal and external stakeholders to track our progress and benchmark our reputation against our competitors and other leading brands. An independent company conducts this survey on our behalf. This year, we have again maintained the number one leadership position relative to our competitors in the telecoms sector in South Africa.

During the year, we won various external awards, reflecting an external perspective on our reputation leadership:

• Vodacom was voted Top Brand in the consumer and business category by Sunday Times, and Vodacom Business received the coveted Grand Prix Award for the overall favourite brand in business.
• South African youth once again voted Vodacom as the Coolest Brand in the Generation Next Awards.
• Our MyVodacom App won the Best Mobile App in the Digital Impact Awards.
• Vodacom has been recognised as the Top Employer in the telecoms industry and in the top ten across all industries by the Top Employers Institute.
• Vodacom was awarded first position in the Mail & Guardian Top Companies Reputation Index in the Telecoms industry and we are in the top three across all industries in South Africa.
• Vodacom DRC won the VSAT Innovation for Africa Award at the 2015 AfricaCom Awards for its rural coverage system.
• The MyBroadband Awards, based on four consumer surveys, voted Shameel Aziz Joosub IT person of the year.

Making a positive impact on society

The provision of reliable and affordable voice and data services is a powerful driver of GDP growth and has enormous potential in addressing key socioeconomic challenges. We have aligned our strategic priorities with the national developmental objectives in our countries of operation, and are partnering with a range of stakeholders to deliver on these strategies.

Developing mobile solutions to address socioeconomic challenges

Vodacom remains committed to working with governments and communities to find innovative ways through which mobile communication technologies can support financial inclusion, food security, health, access to education and other priorities. We are making a significant contribution to each of these areas both through our core business activities and through the strategically aligned work of the Vodacom Foundation.

• Promoting financial inclusion: In Tanzania, Mozambique, the DRC and Lesotho, our M-Pesa product – a key business growth driver – is providing affordable access to banking to more than 9.2 million customers, many of whom live in remote rural areas. M-Pesa continues to evolve beyond a traditional mobile money transfer service to a service that enables people to save and borrow, and to receive salaries and benefits in Tanzania. 1.6 million customers are now actively using our M-Pawa savings and loans product. We are looking to expand these and related services across our other International operations.
• Mobile agriculture solutions: Through Vodafone – and in partnership with the US Agency for International Development (USAID) and the development NGO, TechnoServe we have been implementing the Connected Farmer platform in Tanzania and Mozambique. By promoting commercially viable mobile agricultural solutions and enhanced connectivity, we aim to increase the productivity, incomes and resilience of half-a-million smallholder farmers across these countries.
• Education: Our mobile education solutions, developed in partnership with other ICT providers, is the cornerstone of our investment in education. We have connected
  2 194 schools and 81 ICT resource centres where we train teachers throughout South Africa on using ICT in maths and science teaching, and on integrating ICT in the classroom. Our e-school learning platform, Vodacom e-school, provides more than 105 000 registered users with content free of charge to their mobile device, tablet or PC. We connected 3 087 schools with data access which includes our universal service obligations target of 700 schools. In Tanzania, we have partnered with Samsung to deliver the Smart Schools programme that has installed ICT equipment in classrooms and trained teachers on the integration of ICT into learning, benefiting more than 6 000 students.
• Health: Together with our partners, we have continued with our nationwide ‘text-to-treatment’ campaigns to get the message on treatment to as many affected people as possible.
  • Vodacom Tanzania engaged the Moyo Fistula campaign with 2 274 women who suffer with obstetric fistula, benefiting from medical treatment and rehabilitation. The ‘Healthy Pregnancy, Healthy Baby’ text messaging service offers free text messages for pregnant women and mothers with newborns with maternal health content. We have sent 55 million free messages to the one million women registered on the programme.
  • In Lesotho, we are using a text-to-treatment model to get more HIV-positive pregnant women and children onto effective care and treatment programmes, with M-Pesa helping to facilitate transport for patients.
  • In South Africa, we have rolled out our mobile application solution in three provinces and 1 600 clinics to manage the availability of chronic disease medication. Health workers have been trained to use mobile phones to manage stock levels of chronic medication.
• Safety: The national gender-based violence command centre in South Africa was named the Best Technology Innovation – Small Centre of the World at the Global Best Contact Centre Awards in the USA. The centre, developed in collaboration with our associate Afrigis and subsidiary Mezzanine, provides support and counselling to victims of gender-based violence.

 Contributing to public finances

As a responsible multinational company, we understand that it is in our interest – and the interest of our stakeholders – to ensure that the public services and infrastructure we rely on are fit for purpose and remain properly funded, including through a transparent, fair and effective system of taxation. Our operating businesses are subject to more than 30 different types of taxes and fees every year, of which a significant number relate specifically to the telecommunications industry. In 2016, we contributed R14 710 million in cash to the public finances in our countries of operation, up from R13 575 million in 2015. This increase is primarily due to an increase in taxable income resulting in higher corporate taxes, as well as an increase in licence fees and telecommunications related taxes. The Group’s total tax charge was R5 934 million. The difference between the total tax contribution and the tax charge primarily relates to telecoms specific taxes and other indirect taxes such as value-added tax and employment taxes. Our separately available Public finances report 2016 provides a comprehensive country-by-country review of Vodacom’s contribution to public finances in our countries of operation.

View our public finances report

This year, based on our score, Vodacom is the most empowered JSE listed company in the ICT sector in South Africa. For the third year running we retained our Level 2 BEE contributor status, achieving a score of 98.25. This reflects our commitment to implementing meaningful and sustainable transformation for our employees, the people of South Africa and the economy as a whole.

We achieved good scores across each of the main rated elements:

• Our black equity holding increased from 9.22% to 18.62%, resulting in an increase of seven points.
• On learning and development, we spent R114 million exceeding the recognition of spend by R6.5 million, resulting in an increase in the stretch score of 14 points by 0.7 of a point.
• We exceeded the stretch target relating to preferential procurement by 1.43 points (R26.2 billion weighted spend) by significantly increasing our expenditure on
  BEE-status suppliers, exceeding the target by R10 billion. We spent R5 billion on suppliers that are more than 30% black women-owned (significantly above the target of R1.8 billion and representing a R3.5 billion increase from the previous year’s results), and we spent R7.2 billion on suppliers with more than 51% black ownership (an increase of R3.2 billion from the previous year, and above the target of R2.8 billion).
• Our enterprise development element realised an increase of R270 million over target.
• On socioeconomic development, we exceeded spend by R48 million.

BEE scorecard

Our sustainability report 2016

A more detailed review of our societal impacts and contribution is provided in Vodacom’s sustainability report 2016.

The report, which constitutes the annual report of Vodacom’s Social and Ethics Committee, reviews our performance and activities in the following material areas:

• Sustainability governance and ethics: our sustainability governance framework and our approach to promoting ethics and business integrity.
• Investing in our people: our initiatives aimed at developing our people and promoting workplace health and safety.
• Delivering social value: reviewing the social contribution of our products and services, and our BEE and social investment initiatives.
• Products and service responsibility: our activities to protect customer privacy and security, and address consumer concerns.
• Responsible environmental management: what we are doing to manage our most material environmental impacts relating to energy and climate change, water usage and waste.

A summary of our sustainability performance is presented in the following table:

	Indicator	2016		2015
	Investing in our people
	Number of full time permanent employees	7 538		7 786
	Salaries and benefits (Rm)	5 599		4 886
	Women representation in Executive Committee (%)	18.0		17.0
	Black representation in Executive Committee (%)	55.0		58.0
	Ratio of average basic salary of men to women# (times)	1.3		1.4
	Total training spend (Rm)	103		130
	Workplace-related fatalities (employees and contractors)	4		3
	Lost time injury frequency rate (LTIFR)	0.11		0.10
	Delivering social value
	Active customers (thousand)	61 305		61 648
	Active M-Pesa customers (thousand)	9 224		7 991
	Investment in infrastructure (Rm)	12 875		13 305
	Total cash tax contribution (Rm)	14 710		13 575
	Investment in communities (Rm)	106		96
	Product and service responsibility
	Customer NPS in South Africa (ranking relative to competitors)	1st		1st
	Responsible envir onmental management
	Access network electricity# (GWh)	282.0		255.0
	Core network electricity# (GWh)	81.0		62.0
	Building electricity# (GWh)	50.0		59.0
	Vehicle fuel (diesel and petrol)# (million litres)	1.3		1.6
	Network equipment and handsets reused or recycled# (tonnes)	1 006		160
	CO2 emissions1 (tonnes)	576 872†		561 515†

1. Total scope 1, 2 and 3 emissions (Greenhouse Gas Protocol).
# South Africa only.
† Restated to exclude Tanzania base stations.

View our sustainability report 2016