2010 - vodacom

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Group Sustainability Report for the year ended 31 March 2010 2010

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Page 1: 2010 - Vodacom

Group Sustainability Reportfor the year ended 31 March 2010

2010

Page 2: 2010 - Vodacom

This is our third sustainability report and covers the financial year from 1 April 2009 to 31 March 2010. References made to

‘this financial year’, refer to the financial year noted above. Likewise, references made to ‘the prior year’ and the ‘last financial

year’ refers to the reporting period 1 April 2008 to 31 March 2009. References to the ‘next financial year’ refer to the reporting

period 1 April 2010 to 31 March 2011. We report annually and this is the first year that we report as a publicly listed company.

Vodacom listed on the JSE on 18 May 2009, binding itself to the JSE Listing Requirements.

Considering South Africa’s dominance within the Group – its operation serves 26.2 million customers out of a total of

39.9 million for the Group – this report largely covers issues relating to this market. Use of the terms ‘Vodacom’, ‘Vodacom

Group’, ‘the Group’, ‘the Company’, ‘we’ or ‘us’ in this report refer to the Vodacom Group, while the use of ‘Vodacom SA’

refers to the South African company, and ‘DRC’, ‘Lesotho’, ‘Mozambique’, and ‘Tanzania’ refer to individual local markets.

Where the term ‘company’ is used in this context, it refers to the local market being discussed.

Other local markets are reported on in more detail than last year, but not as comprehensively as for South Africa. Over time,

reporting will improve as we expand our sustainability programme to our various local markets, and as their operations grow

and mature. No significant sustainability information is recorded for Gateway this year.

The reporting process is based on the Global Reporting Initiative’s G3 Sustainability Reporting Guidelines, and Vodacom

self-declares a Level C GRI rating for this report. No external assurance for this report has been sought. We are consistently

improving our internal reporting structures as the sustainability programme becomes established within the company.

We will be considering assurance in the future.

For more information about sustainability at Vodacom or for queries regarding this report, contact the Group Sustainability

division by email at [email protected] or please call +27 (0)11 653 5000.

About this report

Page 3: 2010 - Vodacom

Vodacom Group Sustainability Report 2010 1

Contents

Material Issues ➾ 2

Introduction ➾ 4 About the Company 5 Foreword from the Chairman6 CEO’s statement8 Corporate Governance

Access to communications ➾ 12 Socio-economic impact of mobile telecoms12 Mobile banking for the unbanked12 Network coverage

13 Competition and cost of communications14 Affordability and clear pricing16 Reducing the level of preventable exclusion

Transformation ➾ 19 Equity ownership19 Management control20 Employment equity (EE) and diversity management21 Skills development21 Preferential procurement (local suppliers)22 Enterprise development23 Socio-economic development

Our people ➾ 24 Representation and engagement26 Attracting and retaining talent30 Employee rewards and remuneration31 Employee wellness32 Workplace HIV/Aids33 Health and safety

Impact on environment ➾ 34 Climate change/carbon footprint36 Energy efficiency/alternate energy37 Resource utilisation38 E-waste39 Placement of base stations

Social responsibility ➾ 40 Ethical business conduct41 Anti-CMT compliance programme42 Regulation of Interception of Communications Act (RICA)43 Privacy44 Wireless Application Service Providers (WASPs)44 Content standards/protecting vulnerable users46 EMF compliance48 Contribution to communities (CSI)

GRI Index / Glossary ➾ 52 GRI Index60 Glossary

Page 4: 2010 - Vodacom

2 Vodacom Group Sustainability Report 2010

Material issues

Material issues Stakeholders Summary of status Page

Stakeholder Engagement

All stakeholders A strategic workshop was held at Group level to debate the materiality of a variety of societal and environmental concerns. The resulting list of material issues (this table) was approved by the Executive Committee (Exco).

10

Access to communications

Socio-economic impact of mobile telecoms

Communities

LSM 1–3 customers

Micro- and small enterprises

Vodafone

Vodacom SA has partnered with a leading bank to launch the innovative mobile money solution, M-Pesa, to cater for the previously unbanked.

12

Network coverage Vodacom SA’s 2G and 3G networks now cover 99.7% and 54.0% of the population respectively. We continue with our roll out in rural areas, with 2G covering 81.8% and 3G covering 7.3% by area. Networks in other local markets are also expanding rapidly.

12

Reducing the level of preventable exclusion

Vodacom SA partnered with Age in Action, launching the ZTE S202 and S302 model mobile phone for older persons. Two new Speaking Phones, and three products for the hearing impaired were also launched.

16

Competition and the cost of communications

Mobile termination rates (‘MTR’) – or interconnect rates – were reduced by 28.8% this year. In addition, the average effective price per minute dropped by 7.7% in SA during the year.

13

Affordability and clear pricing Low cost handsets have decreased in price by 30% since 2008. 14

Transformation

Equity ownership

Shareholders

Employees

Suppliers

Small enterprises

Communities

6.25% of the company is BBBEE owned. dti CoGP (Department of Trade and Industry Codes of Good Practice) score: 6.13/20

19

Management control Black representation increased. dti CoGP score: 6.56/10 19

Employment equity (and diversity management)

A Transformation and Diversity Steering Committee has been established. Retention of black employees, and in particular black female employees, remains a challenge. dti CoGP score: 10.16/15

20

Skills development 80% of all training this year was invested in the Black Designated Group. dti CoGP score: 12/15

21

Preferential procurement (local suppliers)

Vodacom SA is working to increase the proportion of registered BBBEE suppliers, and requiring all suppliers to work towards a Level 4 BBBEE status. dti CoGP score: 14.72/20

21

Enterprise development Vodacom SA is expanding opportunities for BBBEE entrepreneurs through Vodacom Internal WASP. dti CoGP score: 15/15.

22

Socio-economic development Vodacom SA allocated R149 million to socio-economic development during the financial year. dti CoGP score: 5/5.

23

Page 5: 2010 - Vodacom

Performance

Vodacom Group Sustainability Report 2010 3

Material issues Stakeholders Summary of status Page

Our people

Representation and engagement

Employees

Families and dependents

An employee survey was conducted for the first time at Vodacom SA this year, with an 80% participation rate, and action plans are being drawn up to address issues raised

24

Attracting and retaining talent Vodacom SA invested R71.2 million in training employees (3.1% of payroll). Staff turnover has decreased by almost 3%.

26

Employee wellness Vodacom SA spent R10.6 million on employee wellness this year, compared with R9.9 million in the prior year (R9 million in 2007/8).

30

Impact on environment

Climate change/carbon footprint

Government

Regulators

Interest groups

Vodafone

Public

Vodacom is taking part in the Carbon Disclosure Project for the first time, and a climate change policy and strategy is currently being developed.

34

Energy efficiency/alternate energy

Vodacom saved an estimated total of 23 575 MWh on its SA network during 2009/10. Hybrid and solar power are being rolled out on the non-SA networks. Vodacom SA is now a registered member of the Green Building Council of South Africa (GBCSA).

35

Resource utilisation Vodacom’s water-saving initiatives are performing well. 37

E-waste 208 tonnes of IT and network equipment, as well as 4.5 tonnes of handsets were recycled this year.

38

Placement of base stations Vodacom’s safety, health, environment and quality team develop policies relating to the placement of base stations to ensure minimal impact.

39

Social responsibility

Business ethics

Customers

Public

Government

Regulators

Industry bodies

Vodacom launched an Ethics Advice Line, and published a “Guideline for Content in the Workplace” this year.

40

Compliance with RICA Vodacom SA’s primary target is to make the RICA registration process as simple as possible for both existing and new customers while ensuring that all existing customers are registered by 31 December 2010. Over 13 000 terminals at points of sale have been installed to enable new customers to register and over 113 000 registration agents have been trained.

42

Privacy of information Vodacom has policies in place to ensure that customer information is not unlawfully disclosed in terms of licence obligations, both internally and via our WASP business partners. The Protection of Personal Information Draft Act (2005), which Vodacom SA made submissions on, was approved in August 2009. All Vodacom SA’s key concerns were addressed.

43

Protection of vulnerable users Vodacom was instrumental in initiating a double-opt-in rule requiring customers who subscribe to WASP services in South Africa to confirm their requests prior to being billed. This is to be implemented during 2010/11.

44

EMF compliance Vodacom engages with the Directorate for Radiation Control to keep informed about any developments in local regulation, annually. The industry is currently anticipating a draft South African EMF standard for best practice.

46

Contribution to communities During the 2009/10 financial year, the Vodacom Foundation in South Africa contributed R68.6 million. A further R11.5 million constitutes CSI activities conducted by other divisions of the company.

48

Page 6: 2010 - Vodacom

4 Vodacom Group Sustainability Report 2010

About the Company

Products and servicesWe offer a wide range of products and services delivered through

a variety of technological platforms to our corporate and wholesale

customers. While each local market tailors these to suit their

specific needs, the main products and services offered are:

➾ Voice

➾ Mobile messaging

➾ Broadband data and connectivity

➾ Converged services

For full details, see our Group website at www.vodacom.com, as

well as our 2010 Annual Report.

Vodacom Group (as at 31 March 2010)

Vodacom Group

Lesotho

88.3%

South African Government14%

Public21%

Vodafone65%

DRC

51%

Mozambique

85%

South Africa

93.75%

Tanzania

65%

Analysis of value distributed

(% contributed)

■ Retained

■ Employees

■ Finance providers

■ Government

■ Reinvested

11.0

13.8

18.2

18.438.6

2010

4.9

33.020.0

18.323.8

2009

10.3

33.7

21.2

15.1

19.7

2008

Group highlights ➾ 39.9 million voice customers

➾ 7.6 million data users

➾ R95 million spent on CSI

initiatives

➾ Included in JSE SRI Index

Page 7: 2010 - Vodacom

Vodacom Group Sustainability Report 2010 5

Peter Moyo – Chairman

As one of the foremost corporates in South Africa and indeed on

our continent, we have an obligation to lead by example in saving

the planet’s resources, promoting the best interests of our staff and

customers and facilitating societal progress for the good of all. To

this extent as a company we continue to search for ways we can

use our technology to help address issues such as crime, health

provision, access to communications, education, the eradication

of poverty and the extension of social services.

The global economy is emerging from a prolonged period of

decline which saw the demise of many large corporations and the

loss of hundreds of thousands of jobs. At the same time we

witnessed the failure to implement a new binding agreement at

the global climate change summit in Copenhagen as countries

failed to find common ground on this vital issue.

Our challenge in the face of this is to continue running a successful

business which is not only financially sound but which is also

poised to address the needs of our diverse range of stakeholders

in a socially responsible manner. It is a challenge I am satisfied we

continue to meet.

The past year has seen the company deliver a robust set of

financial results, with a steady growth in customer numbers,

sustained investment in infrastructure and continued market

leadership in most of the countries in which we operate.

However it is the life-changing impact of our products and

services of which we are most proud. In many markets customers

access communications for the first time using our mobile

technology. Our ultra low cost handsets make accessing this

technology more affordable. We are introducing mobile banking

to the previously unbanked and will continue to expand this

offering across the Group. New services in the field of mobile

health are being explored, while the introduction of handsets for

the visually and hearing impaired, as well as for the elderly, has

allowed us to introduce mobile communications to those

previously excluded.

It is precisely these types of products and services which are both

commercially viable and have a high social impact that allows us

to prosper as a company while contributing to positive social

development, in effect tying our success to that of the broader

society in which we operate. Additionally our business success

allows us to contribute to a variety of social causes aimed at

improving the lives of those less fortunate.

Responsible corporate citizenship also obliges us to remain

mindful of the impact we have on the physical environment.

Judicious utilization of limited natural resources is essential as is

the need to limit our waste, particularly e-waste. We have taken

steps in this regard but more needs to be done. We see climate

change presenting both a challenge as well as an opportunity for

us. While we must make our operations more carbon efficient,

and have begun doing so, we are aware that we have the tools

to assist other corporate entities to do the same through services

such as videoconferencing and machine-to-machine transactions.

I believe very strongly in the power of corporations to be a driving

force for positive change and that a truly sustainable company is

one that delivers strong returns to all its stakeholders.

A business can only prosper and be sustainable if the society in which it operates is sustainable, and I believe that Vodacom continues to make a great contribution towards a more sustainable society.

Foreword from the Chairman

Page 8: 2010 - Vodacom

6 Vodacom Group Sustainability Report 2010

Pieter Uys – Chief Executive Officer

Chief Executive Officer’s statement

Shareholders typically expect ongoing dividends from the

company’s profits, as well as growth in the value of the

company. Neither of these is possible in the long-term unless

the company also meets the interests of its other stakeholders.

Customers, employees, suppliers, government regulators and

broader society all have expectations and concerns that require

ongoing response from us if we are to continue to grow our

brand in South Africa and on the African continent. This

thinking is in line with the 2009 King Report on Corporate

Governance for South Africa (King III), which seeks to balance

the wider concerns of society with the interests of business.

This year, we are developing systems to improve our

compliance with the GRI (G3) indicators, which form the basis

of compliance with King III.

We have followed up last year’s stakeholder survey with frank

discourse with a broad range of stakeholders. We also held a

workshop with key staff to examine stakeholder concerns

against the interests of the business, and through this process

have listed and reprioritised the issues we believe are most

important for our ongoing sustainability.

Aside from stakeholder engagement itself, five key issues

emerged, and these form the framework for this report:

1. Access to communications – We recognise the enormous

role that advanced mobile telecommunications can play in

the development of the peoples of Africa. Customers

naturally expect these benefits as affordably as possible,

and they either have concerns with products that are

confusing or they commit to them unknowingly. In

responding to these demands, Vodacom is continuing to

make voice and data more accessible while increasing its

network coverage, especially to rural communities. We are

also working with the Independent Communications

Authority of South Africa and consumer legislation to

ensure our customers continue to receive the best value

from our network. Already, we offer customers the lowest

cost handsets on the market.

2. Transformation – Vodacom is a powerful enabling agent in

our economy for the broad-based empowerment of

historically disadvantaged people. The dti Codes of Good

Practice provide the framework for us to create opportunities

for black employees, suppliers and entrepreneurs, and we

continue to improve our overall score as a Level 4

contributor, whilst acknowledging the challenges we face in

improving the representation of black women in particular.

3. Employees – Considering that our people are most directly

responsible for our sustainability, we are committed to

creating the best working environment for the most highly

skilled and motivated employees in the industry. We are

particularly focused on attracting and retaining talent

through training (skills and leadership), remuneration and

other rewards for good work. To ensure a representative

employee base, the Group has recently initiated a

Transformation and Diversity programme focusing on

developing diversity in race, gender and disability across

the organisation.

4. Impact on the environment – While mobile

communications clearly improves the energy efficiency of

the economy (e.g. mobile communications facilitates quick

and easy access to information, improving planning and

saving on logistics costs), we are nevertheless mindful of

our direct environmental impact through energy and

materials usage, e-waste and the placement of our base

stations. We continue to work on improving the

measurement of these impacts, joining the international

Carbon Disclosure Project, while finding smart solutions to

reduce our demand on scarce resources and fossil fuels.

A year ago, in May 2009, Vodacom listed on the JSE, in the process gaining some 95 000 shareholders eager to share in the company’s success. But how do we define success?

Page 9: 2010 - Vodacom

Vodacom Group Sustainability Report 2010 7

Executive summaryCEO statement

5. Social responsibility – We acknowledge the importance of

demonstrating high ethical standards as a vital measure of

our organisational integrity. To this effect, allegations made

by ex-employees on a range of issues were investigated and

where they pointed to areas of the business that needed to

be strengthened these have been attended to. As we grow

the business it becomes ever more important to embed a

strong ethical culture. We are also constantly on guard

against harm to users of our technology. We anticipate a

national electromagnetic fields standard and best practice

protocol from the Directorate for Radiation Control to guide

best practice. In addition we work with the Wireless

Application Service Providers’ Association (WASPA) on

content standards to protect vulnerable users.

South Africa’s community development strategy was recently

revised and now places a stronger emphasis on ICT-enabled

projects chosen to leverage services such as SMS and USSD to

support initiatives in community health, education and security.

This focus is echoed by all our local markets, who also direct

spend into welfare, community, environment, culture, arts,

sports and technology. During this financial year the Group

spent in the region of R95 million on these initiatives, via our

various in-country foundations as well as from other divisions

within the business.

The way we do business in all our local markets is important to

us. We work with our employees, customers and suppliers to

ensure we respect local cultures, while upholding ethical

standards of business.

Page 10: 2010 - Vodacom

8 Vodacom Group Sustainability Report 2010

As an essential part of this commitment, the Board recognises the

need to conduct business in accordance with the principles

promoted in the King III Code of Corporate Practices and

Conduct. These include discipline, independence, responsibility,

fairness, social responsibility, transparency and accountability of

directors to all stakeholders.

A number of these principles are entrenched in the Group’s

internal controls and policy procedures governing corporate

conduct. Our Board is satisfied that every effort is being made to

comply with all material aspects of King III. Where we do not fully

comply, an explanation is indicated below.

Board

Our unitary Board consists of 13 directors. Of these, five, including

the Chairman, are independent non-executive directors while five

are non-executive and three are executive directors. A Board

charter has been adopted where the detailed responsibilities of

the Board include:

➾ oversight of the strategic direction of the Vodacom Group;

➾ approving major capital projects, acquisitions or divestments;

➾ exercising independent objective judgement on the business

affairs of the Group independent from management;

➾ ensuring that policies and procedures are in place in terms of

appropriate governance structures;

➾ ensuring the effectiveness of and reporting of the Group’s

systems of internal controls;

➾ reviewing and evaluating the business risks facing the Group;

➾ approving the annual budget and operating plan;

➾ approving the annual and interim financial results and

shareholder communications; and

➾ approving the senior management structure, responsibilities

and succession plans.

Accountability

The Board takes overall responsibility for the success of the

company. Its role is to exercise leadership and sound judgement

in directing Vodacom to achieve sustainable growth and act in

the best interests of the shareholders.

In line with best practice, the roles of Chairman and Chief

Executive are separate. The Board is led by the Chairman while

operational management of the Group is the responsibility of the

Chief Executive.

Directors

The directors have a wide range of expertise as well as significant

experience in financial, commercial and mobile telecommunications

activities. In terms of the Group’s articles of association, the

non-executive directors have no fixed term of appointment while

the executive directors are subject to the standard terms and

conditions of employment.

All of the three executive directors have a notice period of six months.

In terms of Vodacom’s articles of association, the directors are subject

to retirement by rotation and re-election by shareholders at least once

every three years. Any director appointed to fill a casual vacancy must

retire at the first annual general meeting following his appointment

and stand for re-election at that annual general meeting.

Independent advice

The Board recognises that there may be occasions where one or

more directors feel it necessary to take independent professional

advice at the company’s expense. There is an agreed procedure

for them to do so.

Board committees

The Board has established several committees in which the

non-executive directors play a pivotal role. All committees

operate under board-approved terms of reference, which may be

updated from time to time to keep abreast with developments in

corporate law and best practice in governance. Board

committees are as follows:

Corporate governance

Vodacom is committed to the highest standards of business integrity, ethical values and professionalism in all its activities.

Page 11: 2010 - Vodacom

Vodacom Group Sustainability Report 2010 9

Governance

Executive Committee

The Executive Committee is responsible for the operational

activities of the Group to develop strategy and policy proposals

for consideration by the Board and to implement the Board’s

directives. It has a properly constituted mandate and terms of

reference.

Audit Committee

The primary role of the audit committee is to ensure the integrity

of the financial reporting and the audit process, and that a sound

risk management and internal control system is maintained.

Remuneration Committee

The remuneration committee ensures that the Group’s directors

and senior executives are fairly rewarded for their individual

contributions to overall performance and in line with our

remuneration philosophy.

This committee’s membership consists entirely of non-executive

directors, 50% of whom are independent. While not fully in

alignment with the King III requirement of having a majority of

members who are independent non-executives, we are satisfied

that the composition of this committee enables it to sufficiently

carry out its duties whilst ensuring that our remuneration policies

are aligned with those of Vodafone where practical and in the best

interests of the company.

Nomination Committee

The duties of this committee are, amongst others, to identify and

evaluate suitable potential candidates for appointment to the Board

and to identify and evaluate suitable candidates for the position of

Chief Executive and Chief Financial Officer. In addition to this the

nomination committee, together with the Group CEO, is

responsible for the succession planning of the CEO’s direct reports.

This committee’s membership consists entirely of non-executive

directors, 50% of whom are independent. While not fully in

alignment with the King III requirement of having a majority of

members who are independent non-executives, we are satisfied

that the composition of this committee enables it to be sufficiently

independent in carrying out its duties having considered the rights

of Vodafone contained in the company’s articles of association.

Company Secretary

All directors have access to the advice and services of the

Company Secretary, who is responsible to the Board for ensuring

compliance with procedures and applicable statutes and

regulations. To enable the Board to function effectively, all

directors have full and timely access to information that is relevant

to the proper discharge of their duties. This includes information

such as corporate announcements, investor communications and

other developments which may affect us and our operations. This

also includes access to management where required.

The Company Secretary is responsible for the ongoing

development of director training. All new directors, where

relevant, are appropriately inducted by the Company Secretary

and Chief Executive. This includes fiduciary and statutory

responsibilities as well as orientation in respect of the Group’s

operations.

Risk management

Effective risk management is integral to the Group’s objective of

consistently contributing to the business. As a result, we are

continuously developing and enhancing our risk and control

procedures to improve the mechanisms for risk identification,

assessment and monitoring. Therefore, when we set strategies,

approve budget and monitor progress against the budget, the

directors consider the identified business risks.

In order to facilitate the process of embedding risk management

within the Group, we have established a division reporting to the

Chief Risk Officer. This division assists in identifying, assessing and

recording strategic risks currently facing the Group and, where

appropriate, monitoring procedures aimed at mitigating

pertinent risks.

We identify and manage risks at five different levels within the

organisation, namely at project, process, operational, tactical and

strategic levels. These risks are periodically reviewed and updated.

A filtering and reporting process ensures that the relevant risk

items are reported to the Risk Management Committee

comprising executive management and, thereafter, are reviewed

by the Board.

Page 12: 2010 - Vodacom

Corporate governance continued

10 Vodacom Group Sustainability Report 2010

Internal control

Our internal controls comprise of methods and procedures

adopted by management to provide reasonable assurance in

safeguarding assets, prevention and detection of error, accuracy

and completeness of accounting records and reliability of financial

statements. The internal audit function serves management and

the Board by performing independent evaluations of the adequacy

and effectiveness of the Group’s controls, financial reporting

mechanisms and records, information systems and operations and

provides additional assurance in safeguarding of assets and

financial information.

For further details regarding corporate governance, such as

meeting attendance, etc., refer to the full corporate governance

report in the Annual Report.

����Material Issue����Stakeholder engagement

No successful company makes its business decisions in isolation of

those that stand to be impacted from its actions. Stakeholder

perceptions help us to determine material issues and inform our

business strategy. Our engagement with stakeholders on

sustainability issues has largely been dictated by the strategic

direction of the business. While issues key to business operations

receive high-level attention, we are increasingly incorporating

triple-bottom-line elements into all our business strategies.

Moving forward into a new era as a public company, we recognise

the importance of including the concerns of our stakeholders in

the Group’s business dealings. We interact with our people,

customers, government, the regulator, business partners and

communities at various levels and intensities during the normal

course of business. But the Company’s very size and strength often

shields us from hearing and being able to respond to important

issues affecting these relationships.

Realising this, we held independently facilitated discussions with

key stakeholders in 2008. These raised some areas of concern

regarding the future of Vodacom, our trading culture and

stakeholder relationships. The Chief Officer: Corporate Affairs,

with direct responsibility for external relations, was appointed in

February 2009. Thereafter, we began to formalise and improve

our engagement with stakeholders by formalising a list of

material issues which forms the framework of this report, as well

The key strategic risks we identified during the year under review

were as follows:

Increased regulatory requirements

The main disruptive risks in this area include wholesale and retail

price control, subscriber registration and additional fees and taxes.

These risks are managed by regulatory and stakeholder

engagement teams at the Group level, and within local markets,

which maintain close contact with ministries, legislators and

regulators; make submissions to formal hearings and calls for

comment; provide required reports to regulators; and involve

themselves in international debate, dialogue and research to

determine best practices.

In South Africa, it has been noted that additional scrutiny is

exercised with regard to proposals for new regulations by the

Independent Communications Authority of South Africa (ICASA).

This includes the imposition of wholesale price control and

increasing enquiries into retail pricing. Also affecting South Africa

is the convergence of telecommunications technologies,

encompassing Voice-over IP (VoIP) and facilities provisioning.

These factors have resulted in an increase in competition from

additional entrants into the market, placing pressure on pricing

and margins.

In the Democratic Republic of the Congo (DRC), significant

changes and increases in telecommunications fees (numbering

and spectrum) and taxes (excise taxes on airtime, sales tax,

international call termination and free minutes) are now being

imposed or threatened, which will have an impact upon future

margins. In the DRC, subscriber registration has been

implemented by the national security agencies, posing a major

logistics challenge considering the country’s poor infrastructure.

The level of taxation of mobile communication services in Tanzania

is also high. We are addressing subscriber registration

requirements together with similar requirements relating to the

commercial roll-out of the M-Pesa money transfer service, in order

to mitigate the negative impact of stand-alone subscriber

registration requirements.

Along with our management team’s efforts at implementing the

necessary controls to mitigate these major risks to an acceptable

level, we subscribe to a comprehensive insurance programme and

have a fully embedded business continuity strategy.

Page 13: 2010 - Vodacom

Vodacom Group Sustainability Report 2010 11

Governance

as of the Company’s sustainability management systems,

currently being developed (see Material Issues table on page 2).

Our executive committee is actively engaging on these issues and

working on how to incorporate them into business strategy.

The results of the stakeholder engagement opinion survey on EMF

issues, undertaken by Nunwood Consulting in 2008, were released

during the year under review. These are discussed under the

section on ‘EMF Compliance’.

We engage with our various stakeholder groups throughout the

year, in some cases in a formal and structured manner, and in

other cases on an ad hoc basis. Some of these interactions are

described below, while others are addressed in context with

relevant issues, where they are discussed in this report.

In South Africa, customer satisfaction is monitored on a monthly

basis, through the ‘Customer Delight’ questionnaire which looks

at various customer touch points such as network, products and

services, tariffs, billing, contact centres, and information provision

issues. Year-to-date, Vodacom SA scores 4.4 points higher than its

nearest competitor for overall ‘delight’.

We also track and measure brand perception. in South Africa we

achieve this through ‘brand health’ tracking on a quarterly basis,

to determine what people associate with the various brands, as

well as to check on the general success of the brand. Currently the

market leader for the category, Vodacom SA also conducts market

research and ad hoc studies with customers and suppliers based

on business requirements.

The Group continuously engages with the media on a proactive

and reactive basis via media launches, press conferences,

interviews, press releases, financial results announcements and

media queries. A media centre is available on our website

(www.vodacom.com) where all announcements to the media are

posted, and where media can request to be added to our

distribution list. In addition to our website, we communicate with

our employees and customers through a variety of media such as

newsletters and magazines.

Vodacom is consistently working towards meaningful and

constructive stakeholder engagement that will inform our

understanding of the most important business and sustainability

issues impacting on us in relation to society. By adjusting our

approach and policies where necessary, and deriving indicators of

our performance, we will be able to effectively measure our

progress in the future.

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12 Vodacom Group Sustainability Report 2010

We are committed to facilitating access to all, and during the

2009/10 financial year our customer base grew to close on

39.9 million, up 0.7% on the previous year.

����Material Issue����Socio-economic impact of mobile telecoms

The socio-economic impact of mobile telecommunications is

significant and there is much evidence that it improves people’s

lives. This is particularly highlighted by the benefits that mobile

telecommunications brings to rural and marginalised

communities, providing them with a range of services they have

not historically had access to, as well as stimulating the growth of

micro-enterprises.

The ICT industry’s socio-economic impact is broad ranging.

It provides many jobs through the supply chain, value-added

services and distribution outlets. Mobile operators are top

corporate taxpayers through license fees, number-range fees,

handset duties, services, etc. Mobile networks provide data

services to schools and hospitals and are the largest Internet

service providers (ISPs) in many African countries. Most recently,

mobile banking (by SMS, for example) provides access to

financial services for the first time for many previously unbanked

customers.

The industry’s challenge is to lower the total cost of

communications for our customers, while increasing access in rural

areas. A number of key issues contribute to extending services to

new customers: the extent of network coverage we offer;

distribution models that allow access to our products and offerings

in remote communities; more affordable products (particularly

airtime) and handsets providing services that are key to commerce;

as well as specific products and services for those excluded from

mainstream communication channels.

Communications are currently made affordable to low-income and

rural groups through community service telephones (CSTs). The

pre-paid service, which we were the first to introduce, is also

credited with being the primary enabler for extending mobile

services to the general population.

Looking forward, mobile banking and micro-payments are being

implemented for developing and emerging markets in Africa.

Many opportunities for personal and property security services are

also being developed.

Mobile banking for the unbanked

In the quest to use mobile communications to improve lives of

people living on the periphery of society, we first introduced our

innovative mobile money solution, M-PESA, to the Tanzanian market

in 2008, having initially been launched in Kenya in 2007. It has

subsequently been introduced in Afghanistan, and now boasts a

customer base of more than 13 million. Following the successful

adoption of this service, this mobile money solution is being

brought to South Africa in partnership with Nedbank. M-PESA

allows even unbanked customers to transfer money from person to

person using a mobile phone. M-PESA will be launched during the

2010/11 financial year.

����Material Issue����Network coverage

Vodacom is committed to providing equal access to

communications for all, now focusing not only on 2G services, but

also 3G services, for which there is a rapidly growing demand.

During the year under review, 414 2G base stations and 462 3G

base stations were erected in South Africa, bringing network

coverage to 99.7% and 54.0% of the population respectively.

Translated to total land area covered, 2G urban coverage is 99.9%

and rural is 81.8% (the area within a city boundary is defined as

urban. Total urban area within South Africa is 27 272km2 and total

rural area is 1 191 818km2). 3G urban coverage is 63.8% while rural

is 7.3%. Vodacom SA’s data customer base grew to 1.1 million this

year.

SA Base stations

March 2010 March 2009

2G number of base stations 7 895 7 481

3G number of base stations 3 342 2 880

Access to communications

Vodacom acknowledges the enormous potential of mobile communications to improve lives, particularly as a means of enabling socio-economically marginalised communities’ access to modern services and benefits.

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Communication

The aim is to continue expanding this network with the ultimate goal of having full coverage by

2G and 3G services. While development is certainly budget dependent, Vodacom SA aims to

reach the following levels of population coverage over the next few years:

SA population coverage

March March March March2010 2011 2012 2013

2G Population coverage [%] 99.7 99.7 99.8 99.83G Population coverage [%] 54.0 58.0 62.0 65.0

Vodacom Business is in the process of launching a VSAT (very small aperture terminal)

broadband solution. While this will facilitate 100% geographic coverage for broadband Internet,

VSAT will not be aimed at the general customer, but rather at social responsibility programmes

and entrepreneurs who wish to implement broadband solutions in remote areas. Such a

product would also enable regional and national government to improve service delivery to

communities.

Other local markets

During the financial year under review, Lesotho maintained a steady pace of network expansion.

The number of 2G base stations increased by 15% while the 3G network base stations more

than doubled in quantity.

Mozambique built its first fifty 3G base stations in the past year, while also increasing the

current 2G network by 27%. The aim is to continue steady growth over the coming year,

increasing total 2G coverage to 60%, and increasing the 2G and 3G coverage footprint

aggressively in the central and northern parts of the country. Roll-out of the fibre optic network

in Maputo and of microwave transmission in the northern areas of Mozambique will also be

consolidated during 2010, and licence obligations in terms of providing coverage in under-

serviced areas and to close the coverage gap will be addressed.

In Tanzania, the 2G network has expanded further, now including approximately 76% of the

population, while the 3G service now covers 36% of the population. While there are no specific

expansion targets for the coming year, Tanzania aims to have full (urban and rural) network

coverage for both 2G and 3G within the next ten years.

����Material Issue����Competition and cost of communications

During the 2009/10 financial year, mobile termination rates (MTR) – also known as

interconnect rates – have come into the focus of industry players, parliament, customers and

the media in South Africa. Vodacom supports cost-based interconnect rates and the

reductions to bring rates down to the cost-based level (Vodacom SA reduced its interconnect

rates by 28.8% this year), but this reduction needs to be done in a managed way over time (a

‘glide path’). This is a key issue, as a sudden and severe reduction in interconnect rates would

have a disruptive impact on network investment plans and the industry. The Independent

28.8%reduction of interconnect rates by Vodacom SA

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14 Vodacom Group Sustainability Report 2010

customers by going beyond providing ‘just a phone’ to providing

multi-functional assets. We undertake wide-ranging research to

inform product development, looking to industry standards,

competitors, vendors, revenue forecasting, technological

developments and other stakeholders for relevant data. We also

monitor and analyse data relating to each new product and how

customers respond to them, and this in turn informs further

research and development.

In South Africa, pricing is governed through the Tariffing and

Products Committee (TAPCo), chaired by the Managing Director as

the highest authority. Responsibility for the implementation and

management of the pricing of various products and services resides

with the products and services divisions. In addition to adhering to

ICASA regulations, Vodacom SA strictly abides by the rulings of the

Advertising Standards Authority to ensure that customers are not

misinformed when buying products or services. Various customer

surveys and feedback from customer-facing business partners act as

a litmus test for determining whether content of agreements, as

well as rights and obligations are understood.

Affordable handsets

The launch of the Ultra Low Cost (ULC) handsets has been very

successful in the Vodacom market where mobile phones are still

an aspirational item to many of our potential customers. We first

introduced ULC handsets in South Africa in 2007 and subsequently

in the DRC, Lesotho, Mozambique and Tanzania in 2008. Prices

have decreased by 30% since 2008, and Vodacom foresees

another 10% decrease in 2010 with the planned launch of the

Vodafone 150, retailing at prices as low as R129 in South Africa.

Meanwhile, more technology features are being added, such as

FM radio and torches.

Vodacom SA’s key strategy for the next two years is to provide

affordable broadband and to extend the drive of low-cost

affordable communication to include features more commonly

available in the mid and upper market segments such as camera,

messaging and smartphone functions. Sales figures for low-cost

devices (costing less than US$30) during 2009/10 are estimated to

be 1.8 million units for the year and with a market size such as this

handset manufacturers such as Nokia and Samsung also intend

launching products in this segment providing our customers with

a wide spectrum of choices.

Communications Authority of South Africa (ICASA), having

conducted market reviews in terms of Chapter 10 of the

Electronic Communications Act, has proposed an aggressive glide

path in its draft regulations on interconnection, published in

April. We will be participating in the public participation

processes on this matter.

Vodacom is ensuring that top management are fully trained in

their responsibilities under competition law, in order to promote

fair competition principles and practice in the company’s

operations.

Other local markets

We are currently engaging the Lesotho Communications Authority

around its attempt to direct operators to reduce MTRs unilaterally

based on a 2007 study.

A tariff review is underway in Mozambique, and it is expected that

tariffs will be adjusted to make product offerings more competitive

and profitable at the same time. While the Mozambican

government plans to award the third operator license before the

end of this year, we believe that the market may not support a

third operator. There is a strong focus on marketing in order to

grow the client base, with the aim of obtaining at least 50% share

of the market, and allowing customers to benefit from the

economies of scale that can be achieved.

The Electronic and Postal communications Act 2009, which

empowers the regulator to control prices, was passed by the

Tanzanian Parliament in February 2010, although it has yet to be

implemented. Recently, stiff competition in the Tanzanian market

has led to significant price reductions without regulatory input.

����Material Issue����Affordability and clear pricing

Basic communication should be enjoyed by all people, and

affordable products and handsets are a means of facilitating this

access. In addition, the importance of customer understanding of

the products they choose cannot be overstated as this empowers

them to know their rights, thus reducing misunderstandings and

resulting complaints. Terms of contracts have traditionally been

complex for the lay-person to decipher, and the more

sophisticated products and services become, the more difficult it is

to communicate these terms simply.

Vodacom is developing more affordable products and handsets,

and we aim to create products that truly improve the lives of our

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Affordable products

Vodacom’s pre-paid service, while being more expensive than post-paid, has made

telecommunications more affordable. Vodacom SA has continued to work towards lowering

pre-paid costs producing more affordable offerings such as the 4U pre-paid package, offered at

the same price as the 4U contract.

After the enthusiastic uptake of the R5 top-up vouchers in 2009, two new pre-paid voucher

denominations were launched in South Africa in January 2010, namely R2 and R10, extending

access to even the most price-sensitive consumer. In conjunction with the R5 and R12 vouchers,

these contribute to 79% of voucher sales and 47% of voucher usage value. Pre-paid customers

who show commitment towards spending a higher amount are now receiving discounted rates.

Products introduced this year in South Africa to improve affordability include:

➾ ‘All Day’ and ‘Per Second Plus Prepaid’ – Launched in October 2009, this offering

significantly reduced call rates for Vodacom prepaid customers with the best all-day and

on-net peak prepaid rates, available to the South African market. By the end of February

2010, more than 430 000 subscribers had subscribed to these new packages.

➾ ‘Step Up’ – Launched in November 2009, this includes two new contract tariffs

specifically targeted at customers who do not meet the credit vetting requirements as set

out by their service provider.

The Yebo4Less offering was launched in 2008. This is a prepaid plan providing customers with

variable discounts of up to 99% based on location and time of day. By the end of February

2010, Yebo4Less had a subscriber base of 10.4 million, compared with 4.8 million at the same

time last year. Further enhancements to the product are expected in the near future to enable

discount notification at the time of call as well as the possible inclusion of a dynamic tariff

engine. The minimum discount offered to Yebo4Less customers has also been increased from

5% to 10%.

The Please Call Me (PCM) service allows customers to send a limited number of free messages

requesting a call back. The platform originated an average of nearly 660 million messages per

month during the 2009/10 financial year, compared with 600 million per month for the

previous year. Vodacom SA generates revenue by selling advertising space at the end of each

PCM message. During 2009/10 almost 50% of these advertss were funded by the financial

services/insurance sector. Enhancements to this service are planned for 2010/11.

For comprehensive details of various offerings, refer to our website http://www.vodacom.co.za/

packages/index.jsp

Clear pricing

Vodacom SA supports the Independent Communications Authority of South Africa’s (ICASA)

intention to require providers to show clearly what each element of our products cost, as well as

the costs of opting out of these contracts.

Following the promulgation of the Consumer Protection Bill, we have released a simplified

version of certain products and services. This includes simplified rates, call periods and

groupings of off-net charges on the prepaid and Top Up tariff plans, assisting in making our

retail offerings easier for customers to understand.

R2 and R5pre-paid vouchers extending access to even the most price-sensitive consumer

660 million‘please call me’ messages sent per month during 2009/10

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16 Vodacom Group Sustainability Report 2010

To improve pricing transparency of handset-plus-airtime packages, ICASA published regulations

in 2008 requiring providers to describe clearly the cost of each element in the package.

However, the first set gazetted was ambiguous and the required amendments have not yet

been finalised. As with all ICASA regulations, once promulgated, Vodacom SA will ensure that

the regulations are adhered to.

Other local markets

Whilst no formal policies and regulations currently exist outside South Africa, all our companies

ensure that products and services are clearly explained at the point of sale, and that supporting

literature is provided.

In Lesotho, the introduction of low-cost handsets, per second billing and promotions focused

on discounted offerings in the last year has improved customer perception of the affordability

of Vodacom products.

An offering has been introduced in Mozambique that provides the rural subscriber with a

preferential tariff. This service is branded Zona Tudobom, and was voted one of the top three

new products at the 2010 Africa GSM awards. The Vodafone 250 low-cost handset will be

launched during 2010/11 and will be exclusive to Vodacom in the country.

Tanzania is currently making basic voice and SMS services affordable to rural communities with

simple, easy to understand price plans that are tailored to these communities. Solar powered

low-cost phones will also be introduced.

����Material Issue����Reducing the level of preventable exclusion

Disabled and elderly people are vulnerable to exclusion due to physical circumstances and

the structure of modern society. In appreciation of the specific needs of some customers we

pioneered the first mobile communications products and services for the disabled and

elderly in 2004.

Since then Vodacom SA has been developing expertise in this area of research through a

dedicated unit in the Human Resources department, created in 2008. In the past year our specific

needs strategy has grown to include showcasing mobile devices and products to organisations for

people with disabilities and the elderly. It is important to inform our hearing-impaired customers

of the availability of new devices that will increase their overall communications experience.

During October 2009, we partnered with two organisations to assist with advertising their new

specific needs mobile phone offerings, as well as their hearing-aid devices (which interface with

mobile phones).

Age in Action, the biggest organisation for the elderly in South Africa, is also a partner, and they

assist with our understanding of the needs of elderly customers. This partnership has resulted in

the launch of the ZTE S302 model mobile phone for older persons. This phone was successfully

rolled out and over 18 000 units were sold within eight months. Both reviewers and users

received the phone positively, applauding the design for being user-friendly for older persons.

ZTE S302mobile phone for the elderly

This phone was successfully rolled out and over 18 000 units were sold within eight months.

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Communication

Other products that were launched during 09/10 include:

1. Two new-model speaking phones;

2. Three products for the hearing impaired; and

3. The ZTE S302 phone for the elderly.

Other than standard press releases in numerous newspapers and magazines, product

information is communicated directly to these customers through partner organisations for

the disabled and the elderly. The ZTE S302 product information was communicated directly

to 550 members of Age in Action during their bi-annual elderly conference in October 2009.

During the 2009/10 financial year, general customer awareness sessions were held at various

stores and the 12580 Specific Needs Contact Centre. New specific needs products were

communicated to all staff via an internal communication campaign.

This year we sold 1 586 speaking phones (for the visually impaired) as well as 18 000 ZTE S302

phones for the elderly in South Africa. There are no figures available for the products for the

hearing impaired as these are sold by specialist companies.

Quick startguide for easy reference for the elderly

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18 Vodacom Group Sustainability Report 2010

We have always held a sincere commitment to transformation,

reflected in our pioneering and steadfast investment in enterprise

development. Vodacom SA has invested the required R1 billion in

the government Joint Economic Development Programme well in

advance of the ten-year deadline. in South Africa we continue to

invest close to double the sum required for full points on the

Department of Trade and Industry’s Broad-based Black Economic

Empowerment (BBBEE) Codes of Good Practice (dti CoGP).

All functional units responsible for the implementation of specific

elements have BBBEE performance targets as part of their overall

business objectives. They report progress to senior management

at the executive and Board of Directors meetings, where BBBEE is

a permanent item on the agenda. Vodacom SA has a dedicated

BBBEE unit responsible for guiding the respective functional

groups in implementing BBBEE, and providing management with

quarterly reviews of the Company’s progress.

All key shareholders, including Vodafone, Royal Bafokeng Holdings

(RBH) and Thebe Investment Corporation (TIC) have responded

positively to the outcome of our BBBEE rating. Both RBH and TIC

are corporate customers of Vodacom SA and obtain 125%

recognition against the dti CoGP (Code 500: Preferential

Procurement) for their respective company’s spend.

BBBEE stakeholder engagement

Within Vodacom SA there are various functional units responsible

for specific engagements with our stakeholders:

➾ Shareholders – Managing Director’s office, Regulatory Affairs

and BBBEE Unit (specifically BBBEE related policy matters);

➾ Government – Stakeholder Engagement Division, Regulatory

Affairs, BBBEE Unit;

➾ Regulator – Regulatory Affairs Division including the BBBEE

Unit;

➾ Employees – BBBEE Unit, Human Resources (in respect of the

Employee Share Scheme); and

➾ Suppliers – Procurement Division supported by the BBBEE Unit.

Transformation

At a social level, transformation is about levelling the playing field in order that all South Africans realise their aspirations to participate in the economy in a way that creates value for all. At a business level, the emerging black middle class represents a huge new market opportunity, and it is essential that our South African team is diverse and representative, in order to serve this market effectively.

Scorecard summary

Actual ActualWeighting overall score overall score

% 2010 2009

Overall BBBEE score 100 69.6 68.4

Direct empowerment 30 12.7 13.2– Equity ownership 20 6.1 6.3– Management control 10 6.6 6.9

Human resource development 30 22.2 21.5– Employment equity 15 10.2 9.5– Skills development 15 12.0 12.0

Indirect empowerment 35 29.7 28.7– Preferential procurement 20 14.7 13.7– Enterprise development 15 15.0 15.0

Residual 5 5.0 5.0– Socio-economic development 5 5.0 5.0

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Transformation

Government does not tend to focus on the overall score, but rather on specific elements such as

employment equity, and, in particular, the low level of employment of black females, especially

in senior management and executive roles. In terms of public sector procurement through

tenders, the focus still remains on ownership, which includes elements not covered by the rules

for ownership in dti Codes. This matter will, however, improve following the gazetting of the

regulation governing the state procurement process, which has been aligned with the dti

Codes.

While the Independent Communications Authority of South Africa (ICASA) has not as yet

indicated its perception of the overall score, their draft regulations, especially those pertaining

to licensing, tend to focus primarily on ownership.

Vodacom SA has the highest BEE rating amongst fixed and mobile operators, but we continuously

work on improving our scores across all dimensions.

����Material Issue����Equity ownership

Vodacom SA is jointly owned by Vodacom Group (93.75%), YeboYethu Limited (3.44%), Royal

Bafokeng Holdings (Proprietary) Limited (1.97%), and Thebe Investment Corporation

(Proprietary) Limited (0.84%).

YeboYethu Limited is a BBBEE company established to grant equity ownership to employees and

the public. YeboYethu Limited is held by Vodacom SA employees (45% through the Employee

Share Ownership Scheme) and black South African citizens (55%). Employees own 3.4% of the

business through the YeboYethu employee share ownership plan.

The YeboYethu website was developed to provide continuous access to information that may be

required by the YeboYethu stakeholders. This website has proven to be an effective tool and is

frequently accessed.

Vodacom SA now scores 6.13 out of 20 for the equity ownership pillar of the BBBEE Scorecard.

This is a satisfactory score at present and there are no further plans for BBBEE ownership in the

near future. However, Vodacom Group has obtained additional indirect black shareholders

during the 2009/10 financial year resulting from the unbundling of Telkom out of Vodacom

Group and the subsequent listing of the Group on the JSE.

����Material Issue����Management control

Work still remains to be done to meet race and/or gender representation targets at higher

management levels in the Group and Vodacom SA, specifically the Executive Head of Divisions

and Managing Executive levels.

Black individuals with senior level skills are relatively scarce and in high demand. In the year

under review, black representation increased to 63% compared with 54.5% in the 2008/9

financial year. Due to unforeseen circumstances this year, we lost black female representation on

the board. Vodacom SA’s score has decreased to 6.56 out of 10 for the management control

pillar of the BBBEE Scorecard, compared with 6.94 in 2008/9 in the prior year.

6.13 out of 20scored for the equity ownership pillar of the BBBEE scorecard

6.56 out of 10scored for the management control pillar of the BBBEE scorecard

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Transformation continued

20 Vodacom Group Sustainability Report 2010

����Material Issue����Employment equity (EE) and diversity management

Diversity within the workforce strengthens our ability to serve emerging markets. Vodacom

scores 10.16 out of 15 for the employment equity (EE) element of the BBBEE Scorecard

compared with the prior year’s score of 9.53. Improving on these scores is a priority for the

company, as is making a contribution building a pipeline of ICT skills for natural requirements.

Vodacom SA embraces the spirit of the Employment Equity Act and involves its employee

consultative committees in the development of its employment equity plan, which has recently

been approved by the Department of Labour. Ambitious targets have been set to achieve our

2010 goals.

As per the requirement of the EE Act No 55 of 1998, Vodacom SA ensures that representivity of

the workforce is achieved by measuring its goals against the Economically Active Population

(EAP) statistics. A workforce analysis based on the EAP was conducted in January 2010 and

identified under-representation of African males and females at 22% and 14% respectively.

Vodacom SA is actively endeavouring to address these issues (See section on ‘Employees’).

Sixty nine percent of new appointments in the financial year under review were black

candidates, bringing overall representation of black people in the workforce to 70%.

Representation of different groups in senior, middle and junior management is currently

27% African, 22% Coloured, 15% Indian and 36% White. Our focus is on recruiting

African males and females in senior and middle management roles as these areas are

currently the most under-represented groups. The proportion of disabled employees

remains unchanged at 1.2%. Retention of black employees, and in particular black female

employees, remains a challenge.

Recruitment during the year focused on technical positions, for which there are a greater

number of qualified male applicants. Despite Vodacom’s focus on increasing female

representation in this area, the nature of the positions being filled resulted in a slight reduction

in the appointment of females.

While overall staff turnover has improved, falling from 9% in 2009 to 5.6% this year, retention of

black employees, and in particular black females, remains a challenge. Seventy percent of all

terminations are from the black designated group, measured against 65% in 2009.

Transformation is regarded as an important business imperative, and as such, a Transformation

and Diversity Steering Committee was established during December 2009 on request of the

Group CEO. This committee is a formal subcommittee of the Group Exco and consists of eight

executives. Their aim is to strategically drive future transformation within the company in a

meaningful way, by initiating strategic conversations on this issue at all levels of the organisation

in order to develop a transformation blueprint or charter. This initiative aims to ensure that

transformation becomes embedded not only in the ethos of management, but of all employees

within the organisation. The Committee will also focus on accelerating the development of

diversity in race, gender and people with disabilities across the organisation.

Vodacom SA conducts diversity training for our staff, to facilitate a deeper understanding of

transformation and diversity. Employee feedback is sent to line management via a monitoring

checklist, where actions as well as corrective measures are identified. Implementation is then

10.16 out of 15scored for the employment equity (EE) pillar of the BBBEE scorecard

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Transformation

monitored by local consultative committees. To date, all employees have provided feedback,

with 90% rating the workshops as useful and value-adding in terms of understanding diversity.

����Material Issue����Skills development

Developing the skills of our people drives our strategy to solve the challenge of acquiring skilled

black representation on our workforce.

During the 2009/10 financial year, Vodacom SA invested over R110 million in employee training,

of which R86.7 million was spent on the training of black people (R42 million on black females).

This amount includes all direct and indirect training costs as per the BBBEE verification guidelines,

and represents an investment of 4.8% of the total amount of remuneration (the leviable amount

described by the National Skills Levy Fund) over and above the 1% the company is required to

contribute to the Fund. Three-hundred and eighty four learnerships and other learning

programmes for black employees were identified for the period under review, resulting in

Vodacom exceeding the required scorecard target of 5% to 7.4%.

Vodacom SA’s score for the skills development pillar of the BBBEE Scorecard of 12 out of 15,

which is on par with the prior year.

����Material Issue����Preferential procurement (local suppliers)

Influencing the supply chain to embrace black empowerment is another way in which Vodacom

SA contributes to transformation in the South African economy.

Increasing the presence of black suppliers in the supply chain is one of the aims of Code 500 of

the dti’s Codes of Good Practice. Procurement from BBBEE-accredited suppliers amounted to

R6.5 billion out of a total procurement spend of R13.2 billion. Vodacom SA’s internal target for

preferential procurement is increasing annually, driving spend towards smaller entities. During

the financial year under review, R646.7 million of this spend was directed to qualifying and

exempt micro-enterprises (QSEs), R488.4 million to 51% black-owned businesses and

R76 million to 30% black women-owned businesses. Vodacom SA scored 14.72 out of 20 for

this BBBEE element. Eighty-one percent of procurement spend is with locally-based suppliers.

Preferential procurement from designated entities

Year ended 31 March2009/10 R million

2008/9R million

QSEs R646.7 R748

51% black-owned businesses R488.4 R450

30% black women-owned businesses R76 R52

Vodacom SA faces two main challenges to transforming its supply chain:

➾ A large proportion of the company’s procurement spend is on costly, high-tech equipment

not available in South Africa.

➾ Even relatively small orders placed by the company are large in the context of business size

12 out of 15scored for the skills development pillar of the BBBEE scorecard

R110 millionspent on employee training of which R86.7 million was spent on training black employees (R42 million on black females)

14.72 out of 20scored for the preferential procurement pillar of the BBBEE scorecard

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22 Vodacom Group Sustainability Report 2010

as defined by the Codes, making it harder to achieve BBBEE

points on the dti scorecard for small, emerging businesses.

Vodacom SA aims to remedy this by improving skills and providing

opportunities for local BBBEE companies to supply products and

services that are normally imported, while working to increase the

proportion of registered BBBEE suppliers, currently only half the

total. Vodacom SA evaluates the impact of procurement spend by

identifying what a potential supplier is doing in terms of BBBEE. All

suppliers have been notified of the requirement to work towards a

Level 4 (100% recognition) BBBEE status. For large suppliers, this is

reinforced with direct engagement by the unit liaison officer, as

well as, in some cases, contractual obligations. The liaison officer

has established a database of over 700 current BBBEE-certified

suppliers.

In the event that a successful bidder is not local, Vodacom SA

negotiates, where possible, for opportunities for local agents to be

involved in the contract, making a meaningful contribution to the

required deliverables. This practice is proving successful amongst

multinational suppliers where commitments to assist the local

supply chain have improved dramatically.

Vodacom SA encourages these achievements through annual

incentive targets which contain a BBBEE element. These incentives

are cascaded to all procurement staff.

Workshops are also run with QSEs to educate them on the

requirements of BBBEE and how Vodacom SA applies them. This

assists QSEs to adjust practices in terms of BBBEE in order to do

business with us.

A large local procurement spend inevitably drives emphasis

towards working with larger suppliers. The benefits include the

ability to focus on quality, service and efficiencies of scale.

However, this presents challenges in meeting the requirement to

promote small businesses through direct engagement. Vodacom

SA is engaging with these challenges in order to ensure the

participation of small and emerging businesses in the supply

chain, both directly and indirectly.

����Material Issue����Enterprise development

Developing small black-owned businesses stimulates the economic

participation of South Africa’s previously disadvantaged

communities. Code 600 of the dti CoGP requires monetary or

non-monetary contributions to be made in order to contribute to

the development, or sustainable independence, of black-

empowered businesses.

Vodacom SA’s target contribution for Enterprise Development is

calculated based on cumulative net profit after tax (NPAT) over a

five-year period, commencing from the date of implementation of

BBBEE (February 2007) and equates to R732 million. Between the

start of 2006/7 and end financial year 2008/9, we contributed

R778.1 million to the Community Services Telephone Operators

(CSTO), with a R292.2 million contribution for the year under

review (a total of R1.07 billion). This represents an overspend of

R338 million against the cumulative target, giving the company a

score of 15 out of 15. In addition, we also spent R1.3 billion on

other enterprise development initiatives in the year under review,

i.e. start-up support, training and marketing for Vodashops and

community service telephone operators (CSTOs).

Community services

The CSTO service was initiated when Vodacom SA was first

granted its mobile telecommunications licence in the early 1990s.

One of the conditions was for the company to deploy 22 000

subsidised public mobile telephones in under-serviced and rural

areas. CSTOs were established in converted shipping containers

and earned – and continue to earn – a 50% margin on community

services airtime sales.

There are now over 133 000 community services telephones

operating through containers and retail outlets, such as rural and

peri-urban spaza shops.

CSTOs in SA

Active phones Active CSTOs

31 March 2010 114 525 3 141

31 March 2009 118 282 3 668

31 March 2008 103 024 3 778

The next step, already initiated, is to offer community services

entrepreneurs a wider range of products to sell to their customers,

including airtime, starter packs and even internet access. We also

now offer a choice of four more affordable brands of phone to the

CSTO, ranging in cost between R800 and R1 800 per unit, thereby

giving them more choice and flexibility. This will allow the

micro-entrepreneur to progress from a subsistence level operation

towards a more profitable and formal enterprise. Moving forward,

key growth areas envisaged are in data and M-Pesa.

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Vodacom Group Sustainability Report 2010 23

Transformation

Retail franchisees

Since 2000, the South African Vodashop model has changed to require that all new franchisees

would be at least 51% black owned, and all existing shop owners who wish to acquire a new

shop now have to take on a black partner. This has resulted in the Vodashop franchise model

becoming an ideal vehicle for transformation, with 57% now 100% black owned, 1.6% now

50% black owned and 2.3% now 25% black owned. Vodacom SA aims for 5% growth in this

area per year. These stores receive support in a variety of forms, including training, rental support,

shopfitting and advertising.

Wireless Application Service Providers (WASP)

Although the WASP market presents a world of opportunities for BBBEE entrepreneurs, uptake in

this growth area in the South African market has been very slow. The key reasons identified to

explain this are finances and technological know-how. The current solution for the latter is for

new BBBEE WASPs to use aggregators (such as the Vodacom Internal WASP) who have the

technological know-how and offer support by delivering the technological services for them.

Once they have gained experience, the BBBEE WASPs can begin to offer these services

themselves. Vodacom SA also offers BBBEE WASPs special deals to assist them in their marketing

efforts.

During the 2009/10 financial year, the number of black-owned WASPs grew to 18 out of a total

of 155 on the South African network, a 12% growth rate. Six of these are connected directly to

the network and 12 are connected through the Vodacom Internal WASP platform. Vodacom SA

is aiming for a growth rate of 15% for 2010/11.

Qualifying small enterprises and emerging micro-enterprises

In addition to providing workshops for qualifying small enterprises (QSE) on BBBEE

requirements, we have developed a trade curriculum consisting of five levels (23 modules)

covering product, data and soft skills training. We offer instructor-led training, in-store

e-Learning as well as mobile learning, and have delivered in excess of 57 000 interventions for

the financial year under review, largely on popular demand from QSEs who have voiced their

appreciation for the value of this training. We have also invested in upgrading our learner

management system so that QSEs can view and track their staff training records or progress.

����Material Issue����Socio-economic development

Beyond direct business activities, companies have a role to play in the transformation of

communities and individuals. This is catered for by Code 700 of the dti CoGP.

Vodacom SA allocated R149 million to socio-economic development during the financial year

under review, R64.6 million of which was directed from the Vodacom Foundation’s corporate

social investment budget. The balance is contributed to the Universal Services Agency, an

organisation to which the company donates annually, and which is tasked with the roll-out

of ICT infrastructure in South Africa.

Vodacom SA scored 5 out of 5 for the socio-economic development pillar of the BBBEE

Scorecard.

5 out of 5scored for the socio- economic development pillar of the BBBEE scorecard

15 out of 15scored for the enterprise development pillar of the BBBEE scorecard

Page 26: 2010 - Vodacom

24 Vodacom Group Sustainability Report 2010

Our people are our most valuable asset, and we need to ensure they are well equipped to be productive and innovative in order to maintain Vodacom’s competitive advantage in business excellence. We draw on the expertise, talent and commitment of over 5 000 permanent South African employees and over 2 000 employees in other local markets to deliver customer service excellence and value to all our stakeholders.

Headcount per company as at 31 March 2010

Permanent Contractors/ Totalheadcount assignees/expats headcount

SA companiesVodacom Group Limited 218 15 233Vodacom (Pty) Ltd 3 955 78 4 033Vodacom Service Provider Company (Pty) Ltd 872 17 889Vodacom Ventures (Pty) Ltd 4 1 5

Sub-totals 5 049 111 5 160

Non-SA companiesVodacom Mauritius 3 1 4Vodacom Lesotho 86 10 96Vodacom Tanzania 663 15 678Vodacom DRC 620 31 651Vodacom Mozambique 191 14 205Vodacom Nigeria 1 0 1

Sub-totals 1 564 71 1 635

Gateway Communications 323 60 383

Our people

Stortech 132 0 132

Sub-totals 455 60 515

Overall headcount 7 068 242 7 310

Governance

Human Resources is headed by the Chief Human Resources Officer.

The team is responsible for all people strategies, policies and

practices inside the Company. The Chief Human Resources Officer

is a permanent member of Vodacom’s Executive Committee,

chaired by the CEO.

Our International Human Resources (IHR) division supports and

directs the human resources activities of the non-SA markets in

order to create a consistent group-wide approach to human

resources while still retaining a sense of identity in each country.

The team collaborates with each non-SA company in terms of

consulting, capacity building and skills transfer, while remaining

sensitive to the unique challenges faced in each country.

All remuneration-related decisions in local markets outside South

Africa are subject to formal approval by the Board remuneration

committee of each company. These committees also consider

general operational human resources metrics, including the

management of headcount, during their quarterly meetings.

����Material Issue����Representation and engagement

It is important to understand the needs of our people by engaging

constructively with them, and ensuring that they are represented

in a fair and democratic manner. While all Vodacom SA employees

are formally represented on consultative committees (see below),

only 12.3% (674 people) of the company’s permanent employees

are currently represented by the two registered trade unions, an

increase of 73 employees from 2009. A collective agreement exists

with the Communications Workers Union pertaining to specific

issues, such as access to buildings for meetings and salary

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Vodacom Group Sustainability Report 2010 25

People

deductions for membership subscription. Ad hoc meetings take

place between our legal team and the two trade unions, and the

trade unions may meet with their membership as per formal

agreement with the company. Vodacom SA has agreed to a

threshold employee membership level of greater than 50%,

beyond which a union will be recognised and afforded all

organisational rights.

Vodacom SA has 38 local consultative committees, non-statutory

structures that meet on a regular basis. The aim of the consultative

committee mechanism is to facilitate co-operative interaction

between management and employees, involving employees in the

strategic aspects of decision-making that affect their work

environment. It also aims to enhance co-operative management in

the wealth creation process and allows employees to influence

policy changes. There is a specific focus on employment equity as

detailed in the Employment Equity Act No 55 of 1998.

The National Consultative Committee (NCC) is the Vodacom SA

and Group Limited representative body for SA based staff, chaired

by the managing director. Local committees exist for each division

and region, and each of these has one representative on the NCC.

During the 2009/10 financial year, Vodacom Group staff

established their first local consultative committee after the

successful completion of their elections. Regular meetings for the

various committees will continue as per current practice.

In the event of addressing a dispute, employees can also request

consultative committee members to represent them. Most of the

issues that were raised at both local and national consultative

committee level in the financial year under review have been

successfully addressed. These range from amending policies to

facilitating additional salary increases for staff.

Employee survey

For the first time, during October of the financial year under review,

a comprehensive employee survey (the People Survey) was

conducted at Vodacom SA and Lesotho, giving staff an opportunity

to communicate their views on a number of issues within the

company and functional areas in which they work. The survey set

out to measure employee engagement, manager effectiveness, as

well as a range of issues affecting employees’ motivation and ability

to excel at work.

On completion of the survey, managers distributed company-wide

results (key strengths and opportunities for improvement) to their

teams and team results were discussed. Priority areas for

improvement were brainstormed and identified within teams.

Employee survey results

Key strengths

➾ Strategy and market leadership – Market leader,

clear strategic business direction, agile response to

market challenges.

➾ Social Responsibility – Vodacom is socially responsible

within the communities in which it operates.

➾ Performance standards and skills development –

Mediocrity is not tolerated in the business, work is well

organised within teams, and individuals are supported

with effective training interventions, to build relevant

capability. Work is fresh and innovative.

➾ Pride in the business – Employees feel proud to be

associated with Vodacom (as a successful business with

good values).

➾ Being a caring organisation – This relates specifically

to accommodating employees with special needs.

Opportunities for improvement

➾ Managing change effectively – Employees don’t feel

that they are kept well informed about changes made

in the organisation, which can undermine support for

change efforts.

➾ Creating enabling work conditions – This relates

to the perception that job conditions do not enable

employees to work well. This may also relate to poor

cross-functional teamwork.

➾ Retaining good people – There is a perception that

the best people are not always being retained.

➾ Career development, coaching and performance

feedback – Managers need to be coached in terms of

spending time with people to identify career goals.

There needs to be ongoing praise and recognition and

follow through on agreed plans.

➾ Improve inclusivity – There needs to be a more

conscious celebration of diversity across the business,

while more effectively soliciting input from those who

may hold contrary viewpoints. (Please refer to the

section on the ‘Transformation Committee’).

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Our people continued

26 Vodacom Group Sustainability Report 2010

These were then consolidated into action plans across various

levels of the business, culminating in priorities for Vodacom SA

and Lesotho respectively.

Following the popularity of this survey which received an 80%

response rate, we will be running the same survey in all our local

markets during 2010. More information on this survey can be

found in the Vodacom Group Annual Report 2010.

Other local markets

The development of our people is a primary focus across Vodacom,

with development boards being established in Lesotho and

Mozambique during the financial year under review, while

Tanzania will be appointing one during 2010/11.

An all-inclusive staff representative committee elected by employees

exists in Lesotho. Issues raised are delegated to action agents who

engage with management and report back to the committee. The

issues range from business issues to housekeeping and staff welfare

issues. Records are kept on the resolution of these issues, and there

is currently a 62% success rate, and no issues have required third

party mediation.

In Mozambique, while there is no representative body, staff are

engaged though specific focus groups to discuss matters of interest

for the company. There is a grievance procedure which can be used

for prompt resolution. Mozambique uses the same profit-based

performance incentive structure used throughout the Vodacom

Group to monitor the progress of employees, who are measured

against their delivery in terms of agreed targets and KPAs.

Tanzanian employees are represented by a consultative council as well

as the Tanzania Union of workers (TUICO) and the Communications

and Transport Workers Union of Tanzania (COTWU). Since only four

employees are members of Cotwu, by law this union cannot be

recognised by Vodacom. Departmental representatives table issues

from respective departments during the regular monthly meetings of

the consultative council, which is chaired by the Managing Director.

Performance is measured by the level of staff participation at

departmental meetings, representation during the council meetings

and achievements. During 2009/10 financial year, approximately five

significant issues were raised and three have been resolved. Employee

feedback has been positive and no issues have been referred to a third

party. The company aims to improve communication in the forum

during 2010/11, by further training council representatives.

����Material Issue����Attracting and retaining talent

Vodacom attracts and retains talent through leadership, business

and skills training, remuneration and rewards, and compensation

and benefits. We aim to acquire high calibre employees that are

the right fit not only in terms of qualifications and experience, but

also in terms of contributing to our culture of diversity and

innovation.

Vodacom SA includes the following methods in its multi-faceted

approach to attracting talented individuals:

➾ An E-recruitment system;

➾ On-line strategies;

➾ Incentivised employee referrals;

➾ Encouraging senior management to utilise the High Potential

referral process to identify talented individuals outside the

company; and

➾ An alumni process.

In South Africa our talent acquisition focus for the coming year

includes developing an online strategy and employee referral

strategy. The latter is proving to add great value, boasting 10

placements since the strategy was first initiated in October 2009,

and is receiving increased attention on a targeted basis. We are

improving the active and passive use of technology in order to

build talent pools of scarce skills and to access candidates more

aggressively.

Vodacom SA also offers many benefits which are intended to

retain valuable people, such as leadership, business and skills

training, and progressive remuneration and rewards practices.

These include wellness programmes and employee volunteer

programmes. In combination, these initiatives seek to preserve

a talent pool that will meet current and future human capital

requirements.

Despite the focus on enhancing and developing its talent

acquisition and retention strategies, the ongoing scarcity of skills

means that Vodacom SA needs to be consistently competitive in

the packages it offers its employees, in order to acquire our

talent. Vodacom SA will be establishing more skills academies

internally to grow and develop its own talent.

Page 29: 2010 - Vodacom

People

Vodacom Group Sustainability Report 2010 27

Staff turnover across the Group

Country 2010 2009 2008

SA 5.60% 9.04% 10.50%Lesotho 7.8% 9.2% 4.6%Mozambique 1.4%* 8.33% 10.8%Tanzania 0.8% 1.4% 0.8%DRC 7.3% 8.7% 3.9%

*(voluntary only)

Training

In the 2009/10 financial year, Vodacom SA invested R71.2 million in training employees

compared with R69.7 million in 2008/9 (and R43.9 million in 2007/8). This equates to 3.1%

(3.2% in 2008/9) of payroll, and is reflective of the direct actual training cost as well as the

associated costs of venues, flights and accommodation. Guided by the Skills Development Act

and in partnership with ISETT SETA, Vodacom SA contributed to the enhancement of skills for

the ICT industry by hosting a total of 381 (463 in 2008/9) learners and interns in the business.

Vodacom SA

2010 2009 2008

Number of training days provided 24 580 27 778 24 500

Average training days per employee 5.81 5.8 5.8

Average training spend per employee R16 395.17 R10 412.71 R14 463.60

Percentage of payroll spent 3.1% 3.2% 2.5%

Percentage of employees completed performance review 100% 100% 100%

Number of bursaries 768 716 512

Number of participants in Young Achievers programmes80 (Current

participants) 80 114

Number of participants in the Graduate Programme for females in Technology 22 30 09

Number of virtual learning’s courses accessed and completed15 366 (accessed)

1 577 (completed) 15 712 12 332

Number executives completed Vodacom Advanced Executive Programme 19 19 17

R71.2 millioninvested in employee training, Vodacom SA

’10’09’08

71.2

69.7

43.9

Page 30: 2010 - Vodacom

28 Vodacom Group Sustainability Report 2010

Our people continued

Yebo Bursary Programme

The Vodacom Yebo Bursary

Programme provides permanent

employees with the opportunity

to advance their careers, thus

adding value to South Africa’s ICT

talent pool. Overall performance

in specialised positions is

enhanced, keeping the Company

abreast of the latest advances in

technology. During the past year,

the Yebo Bursary Scheme has

benefited 768 (716 in 2008/9 and

512 in 2007/8) full-time Vodacom

employees with an associated

investment of R8.9 million

compared with R7.9 million in

2008/9 (R4.7 million in 2007/8).

Vodacom Foundation Bursary

The Vodacom Foundation Bursary

provides bursaries to top

achieving students from

disadvantaged communities in

order to increase the South

African skills base in the scarce

skills sectors of ICT and

engineering. Students who

receive a Vodacom Foundation

Bursary benefit from the

opportunity to participate in

Vodacom’s Vacation Work

programme, as well as joining the

selection pool for the internship

training programme and the

Discover Graduate programme.

During the financial year under

review the Vodacom Foundation

Bursary Scheme benefited 131

(140 in 2008/9) disadvantaged

students with an investment of

R9.2 million (R 6.9 million in

2008/9).

Young Achievers Programme (YAP)

Now in its third year, YAP is a

twelve-month, in-service

programme aimed at exposing

young employees to the evolution

of ICT convergence at an early

stage in their careers. This is an

interdisciplinary programme, in

partnership with the Centre for

Software Engineering at Wits

University, which aids young

employees in understanding

Vodacom’s business from a

customer perspective through

intensive exposure to the total

value chain. Since its inception,

188 candidates have completed

the programme, while 80

candidates are currently

participating.

Virtual Learning Centre (VLC)

Vodacom SA continues to use

e-learning to train employees on

new technologies and the VLC

offering also includes function-

specific training in other areas of

the business. During the year,

15 366 courses were accessed,

4 533 courses were registered and

1 577 courses were completed.

Overall, R1.9 million has been

invested in virtual learning centre

(R2.8 million in 2008/9). The

virtual learning platform has also

been launched in our other local

markets, where it is benefiting

staff who otherwise have difficulty

accessing quality training

programmes. Flexi-time staff in

our South African call centres

have also been given an

opportunity to access the VLC

platform.

768Vodacom employees benefited from the Yebo Bursary Scheme

131disadvantaged students benefited from the Vodacom Foundation Bursary

188candidates have completed the YAP programme since inception

R1.9 millionhas been invested in VCL and 15 366 courses were accessed

Vodacom SA training Initiatives

A description of our South African training initiatives follows. The Group also invests substantially in the development of technical and other

required skills in other local markets.

Page 31: 2010 - Vodacom

Vodacom Group Sustainability Report 2010 29

People

Vodacom Advanced Executive Programme (VAEP)

Launched in 2003, Vodacom’s

executive programme is run in

partnership with UNISA. This

programme aims to develop the

executive pipeline by preparing

high-potential Vodacom leaders

to enrich their contributions to

the company. Since its launch,

93 high potential leaders have

completed the programme, and

26 candidates (including

international delegates) are

currently participating in the

revamped programme presented

in partnership with Wits Business

School. The class of 2010 includes

46% international delegates and

35% female representation.

Learners and interns

Vodacom SA has a vested interest

in contributing to the country’s

ICT skills base, guided by the Skills

Development Act and the

national imperatives for growth

and development set out by

government. During the 2009/10

financial year, the company

participated in the enhancement

of skills for the ICT industry in

partnership with the ISETT SETA.

During this period, there was a

total of 381 (463 in 2008/9)

learners and interns in the

business, over the entire value

chain. In the last year, 62% of

Vodacom SA’s learners and interns

were employed and of this figure,

42% were employed within the

company.

Developing women in ICT

Vodacom SA’s Graduate

Programme for Females in

Technology (GPFT), launched in

2006, plays a crucial role as a

vehicle for the advancement and

integration of women into the

technological arena and business

at large. The first two years of

the programme were focused

exclusively on building the

pipeline of high potential females

within technology areas. During

the previous financial year, Vodacom

SA launched a multi-pronged

Graduate Development

Programme focused on the core

functions of the business, i.e.

engineering and technology,

billing and IT and commercial.

Seventy graduates have successfully

completed the programme. In

March 2010, a revised and

rebranded all-inclusive graduate

programme titled ‘Discover’ was

launched, and 23 candidates

(10 females and 13 males) are

currently participating in the

programme. The overall

investment in the graduate

programme is R27.3 million

(R25 million in 2008/9).

Succession Development Programme (SDP)

The purpose of the SDP is to grow

the leadership pipeline for middle

management. Forty-three

candidates participated in the

2009 programme bringing the

total involvement since inception

to 294. Of these, 146 candidates

were promoted (50%), 14

resigned after being promoted,

and 91 remained in their

positions.

93high potential leaders have completed the VAEP programme

62%of Vodacom SA’s learners and interns were employed and of this figure 42% were employed within the company

43candidates participated in the 2009 SDP programme bringing the total involvement since inception to 294

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Our people continued

30 Vodacom Group Sustainability Report 2010

����Material Issue����Employee rewards and remuneration

Vodacom views remuneration as a business issue as it impacts directly on operational

expenditure, company culture, and the behaviour and morale of our people – all key attributes

contributing to the performance of the Company. The Group’s Remuneration Committee

(RemCo) oversees our policy, compensation, reward and benefit programmes on behalf of the

Board. The reward strategy has five components:

➾ Guaranteed pay;

➾ Variable pay;

➾ Performance management;

➾ Learning and personal growth; and

➾ Work environment.

RemCo aims to align the reward strategy to the strategic direction and value drivers of the Group,

and uses incentives and rewards to leverage performance and results. By offering a variety of

flexible short and long-term incentive schemes to our staff, we aim to enhance the retention of

skills and alignment of employee and Group goals. RemCo participates in a range of niche salary

surveys which informs the packages we offer our employees. We benchmark compensation and

benefits against industry standards and are guided by the relevant labour legislation.

Since Vodacom became a listed company, long-term incentive schemes have been altered. The

Phantom share scheme, which made use of options, is no longer relevant and has been

replaced by the Forfeitable share plan, which entitles the employee to be a shareholder with

dividend payments. This is applicable to employees at executive and senior management levels,

and selected employees at middle management.

The recent Vodacom People Survey completed by employees in South Africa and Lesotho

reported that the working environment and benefits offers are perceived as favourable.

Other local markets

A mentorship programme was launched in Lesotho, in March 2010, to coach talented

individuals for management roles. An internship programme has been in place for the past

three years through which talent is pooled from local tertiary institutions based on academic

performance and qualifications. The training expenditure for 2009/10 financial year was

R781 337 (2.6% of payroll) with the average spend being R9 400 per employee.

During 2009/10, an internship programme was introduced in Mozambique. Ten university

graduates are currently participating, and the aim is to employ most of these participants as an

outcome of the programme. There are plans to have another group of 10 interns by June 2010.

Scholarships are also provided to employees for graduate and post-graduate programmes. There

are plans to introduce two leadership development programmes in the near future in an attempt

to improve the leadership and people skills of senior managers. There are also plans to introduce

an integrated managerial programme for managers and supervisors, to help them improve their

skills and competencies and prepare them for the more senior roles in the organisation. The

training expenditure for 2009/10 financial year was R590 000, representing 1% of payroll costs.

Lesotho2.6%of payroll spent on employee training

for the 2009/10 financial year

Mozambique1%of payroll spent on employee training

for the 2009/10 financial year

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Vodacom Group Sustainability Report 2010 31

People

Tanzania’s coaching programme continues to perform well, and an exchange programme is

currently being planned. Employee skills development is supported through ongoing learning

and training, and Tanzania spends 2% of its payroll in this area (over R1.5 million excluding

project related technical training). The company’s entry level salary is currently seven times the

country’s minimum wage requirement. In 2010/11 there will be a focus on enhancing staff

benefits to attract and retain talent.

Employee wellness

Healthy people are vital to a healthy business and we thus strive to ensure that employees have

access to a high level of health care, as well as a working environment that is not harmful to

their well-being. Health and safety performance is a key measure of a company’s level of care,

while low injury and absenteeism rates usually reflect positive morale and productivity.

Absenteeism is a direct result of falling productivity and Vodacom SA’s integrated health,

wellness and employee engagement management strategy aims to minimise this risk. This

strategy is performing well and includes a corporate wellness and employee engagement

programme, HIV/Aids management, an employee assistance programme, executive wellness

and occupational and primary health care.

Absenteeism rates for the 2009/10 financial year

2009/10 2008/9 2007/8

Absenteeism rate 1.15% 1.11% 1.7%

Percent drop in productivity 2.87% 2.75% 4.25%

Total revenue loss R175 million R170 million R255 million

Data from the Group’s employee assistance programme provider, ICAS (Independent

Counselling and Advisory Services) is used in the strictest confidence to track wellness trends,

identify high risk groups and shape human resources policies.

During the financial year under review, 20.3% of Vodacom SA’s employees made use of the

advice, counselling and psychological support offered through the employee assistance

programme, compared with 19% for the prior year. The biggest impacts on the level of

employee stress this year included increased concerns about the costs of living and debt

management, in light of the global financial crisis.

Vodacom SA spent R8.6 million on employee wellness during this financial year, compared with

R9.9 million in the prior year (R9.9 million in 2007/8). Descriptions of the programmes to

promote employee well-being follow.

Wellness programme

Wellness is an internal programme focusing on developing the holistic well-being of employees

and promotes greater alignment with the Vodafone human resource management strategy in

order to attract and retain talented workers. It aims to reduce absenteeism, medical aid

expenses and corporate health risk exposure by addressing the need to reduce lifestyle diseases

while at the same time increasing employee morale, engagement and productivity. Dedicated

groups of employees act as peer educators assisting Vodacom SA employees to manage their

overall health and wellness.

Tanzania2%of payroll spent on employee training

for the 2009/10 financial year

’10’09’08

8.6

9.9

9.9

R8.6 millionspent on employee wellness in SA

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Our people continued

32 Vodacom Group Sustainability Report 2010

Executive wellness programme

Executives undertake an annual medical assessment to establish

the risk to the business of the chronic diseases of lifestyle: high

cholesterol, diabetes, high blood pressure, obesity, cancer,

smoking and sedentary lifestyles. In South Africa, in the financial

year under review, one-hundred and fifty-two Vodacom SA and

Vodacom Group executives were assessed and of these,

55 displayed one major risk factor while one executive displayed

two major risk factors. Executives with modifiable health risks are

encouraged to participate in health and wellness initiatives, such

as exercise and healthy eating. This year, the number of executives

participating in physical activity grew by 12.58%.

Occupational and Primary Health care

Occupational and primary health care services are currently offered

in 11 Vodacom SA buildings across South Africa, with an average

utilisation of 800 employees per month. On 1 February 2009, the

12th primary health care facility was initiated at the Vodacare

Superhub, Midrand. A total number of 8 261 permanent

employees and contractors used the primary health care clinic

services nationally during the financial year under review (7 540 in

2008/9). The most popular services utilised include Vitamin B

injections (37.05%), family planning (20.05%), hypertension

(9.83%) and musculoskeletal (6.22%) treatments. Other services

include flu vaccinations, occupational medical surveillance, travel

medicine and assistance in incapacity management. An ergonomics

drive will also be launched in order to act strategically on the high

rate of musculoskeletal complaints.

The medical surveillance programme (MSP), as part of Vodacom

SA’s occupational health programme, has maintained strong

uptake figures. We placed 275 individuals under occupational

medical surveillance during the financial year, with a 95%

compliance rate.

Workplace HIV/Aids

South Africa is in the midst of an HIV/Aids pandemic, and this

challenge can have a detrimental impact on the economy if it is

not managed effectively. Responsible companies should have a

strategy to deal with this challenge as it impacts directly on the

well-being of our employees, their families and the communities

we work in.

HIV continues to have a low tested prevalence in Vodacom SA.

Vodacom has an ongoing HIV/Aids campaign focusing on raising

awareness, encouraging employees to know their status through

voluntary counselling and testing initiatives, and providing

comprehensive treatment and health monitoring services. All

permanent SA-based Group and Vodacom SA employees can make

use of the free programme, which includes HIV counselling and

testing (HCT), HIV support and treatment, doctor’s visits and

anti-retroviral therapy (ART). All our contractors are now also

covered under the testing scheme of the HCT contract.

HIV/AIDS testing and prevelance

Country

Percent of total employee-base

tested

HIV/Aids prevalence rate

of employees tested

DRC 45.5% 2%Lesotho 43% 16%Mozambique 59.7% 5%South Africa 65% 1.6%Tanzania 86% 2%

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Vodacom Group Sustainability Report 2010 33

People

Between January and December 2009, of the 1 029 contractors

and 2 204 employees that were tested, 44 contractors and 59

employees tested HIV positive. Thirty-nine HIV-positive employees

are on anti-retroviral therapy, receiving care, support and ongoing

monitoring, while 20 remain resistant to diagnoses. Part of the

strategy for this year is to improve the transition programme for

the current 59 positive employees.

Vodacom SA still faces the challenge of achieving 100% employee

participation in the HCT programme. To this end, the following

initiatives are in place:

➾ Introduction of an interactive survey tool to test knowledge

versus practice at HCT days. It is anticipated that this will

attract more people.

➾ Marketing on our revamped website, via blogs, to inform

people where to test, why to test and why to go on

treatment etc.

Vodacom SA aims to test 20% more employees in the next

three-year cycle, reaching a total of 85% by 2013.

HIV/Aids prevalence amongst contractors is high (5%) and

Vodacom SA does not currently support the provision of ARVs

to contractors.

Health and safety

Vodacom takes health and safety very seriously, aiming to ensure

that rules and measures to protect our people and our contractors

are in place at all times. However, three fatalities occurred at

Vodacom during the financial year under review, all contractor

related. In addition three members of the public died in road traffic

accidents involving our contractors’ vehicles/drivers. Fifteen lost

time injuries were reported in South Africa (where the employee was

booked off for more than three days), and a further 62 health and

safety incidences were recorded (employees and contractors). Only

two incidences were recorded in other countries.

Management of wellness, health and safety is supported by

11 health and safety committees functioning across Vodacom SA.

Balanced representation of the organisation is ensured through

813 employee appointees and 149 management members.

Vodacom has aligned its policies and procedures with that of

Vodafone to ensure consistency of management and reporting. In

2008/9 we implemented the enterprise-wide risk assessment tool,

CURA, to populate and manage all occupational health and

safety-related risks.

Other local markets

Staff wellness in Lesotho is supported through various subsidies

including gym memberships and lunchtime meals, while Tanzania

includes recreational facilities, counselling and medical cover.

While the new head-office in Mozambique will have a gym to allow

staff to exercise, employee wellness is currently encouraged though

inter-company sports activities (basketball, soccer) with an uptake of

between 5 and 10%. There are also plans to introduce various

awareness campaigns on topics including disease and exercise.

Stricter health and safety rules will be imposed on all Mozambican

employees during the next financial year. These rules will also be

extended to critical suppliers’ employees, contractors or

sub-contractors.

In Tanzania, employee wellness is supported through gym subsidies

and counselling services. The company continues to provide health

and safety training such as defence driving, tower-climbing, first-aid

and fire marshalling. During the last financial year, there were no

major industrial accidents reported.

644health and safety training courses undertaken in SA

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34 Vodacom Group Sustainability Report 2010

Impact on the environment

At Vodacom, we recognise our obligation to manage our

environmental footprint while not impairing the ability of our

business to continue providing excellent service. We understand

that the ICT industry can also assist in reducing carbon emissions

from economic activity by providing alternatives to traditional

ways of doing business.

In South Africa Vodacom engages with its stakeholders broadly

through the environmental impact assessment process, and on a

case-by-case basis when installing base stations. These stakeholders

include the Department of Environmental Affairs, and EMF

stakeholders (see the section on RF Exposure). The National

Environmental Management: Waste Act released by the Department

of Environmental Affairs and Tourism in 2008 came into effect on

1 July 2009 and Vodacom SA is currently making significant efforts

to understand the implications and requirements thereof.

Lexis-Nexis-Butterworths conducted an external audit for

compliance to South African environmental legislation in

November 2009. Vodacom SA achieved a rating of 84.5%, an

improvement of 6% from last year, largely due to a reduction in

sample size from the previous year’s audit.

SA environmental audit compliance

Month of audit Score

November 2009 84.5%August 2008 78.5%February 2008 90.8%

Vodacom continues to retain its ISO 14001 systems certification

in South Africa. This reflects the company’s commitment to

maintain and improve its environmental management system,

enforce its environmental policy and comply with laws and

regulations. This is a strong focus for Vodacom and is fully

embedded in its systems. In the short to medium term, the aim

is to certify other local markets.

During 2009, Vodacom, as a World Wildlife Fund (WWF)

corporate member, hosted the WWF report-back to business on

the Copenhagen summit. Vodacom is also a member of the

World Business Council on Sustainable Development (WBCSD)

in South Africa.

����Material Issue����Climate change/carbon footprint

Climate change is a pressing issue that requires the full attention

of all global citizens. The private sector is the single largest

contributor of carbon emissions, and it is therefore vital that

addressing climate change becomes integral to business

strategies. While the ICT industry is not inherently a major

contributor to carbon-emissions, Vodacom understands that all

its activities contribute to a cumulative effect and hence we are

taking the climate change challenge seriously.

This challenge also comes with business opportunities by way

of technological solutions that have the potential to replace

traditional, carbon-intensive methods of doing business (such as

video conferencing, machine-to-machine transactions etc.). In

this way, we at Vodacom can truly assist in the mission to combat

climate change.

Unified communications is a technology that facilitates

communication over a variety of interfaces, including an easy to

use, high quality desk-to-desk video conferencing service. Vodacom

Business is currently developing products using this technology,

which will give private and public enterprises the ability to

communicate effectively from remote locations. This has been

proven to reduce carbon emissions associated with business travel.

Vodacom Business has also launched virtual hosting services in

the South African private and public sectors. Virtual data centres

reduce carbon footprints by significantly reducing the size of

physical data centres and thereby minimising the energy and

space they require. Expanding on this concept, Vodacom Business

is also investing in the development of ‘in the cloud computing’

services which reduce the power consumption of the end user

computing device.

Vodacom is currently developing a Climate Change policy and

strategy, identifying both environmental risks and business

opportunities. As part of the policy development process, we are

looking at engagement in a broad sense, and will be developing

our stakeholder engagement strategy in parallel to this policy.

For the first time, Vodacom is taking part in the Carbon Disclosure

Project by undertaking a carbon footprint assessment of the

Group’s activities. Results will be reported on in the next financial

year. While a challenging task due to a lack of metering, this

Although ICT/mobile communications is generally considered a low-impact industry, environmental impacts occur at many stages, from manufacturing of the phones themselves to the placing of base stations – also in our internal operations.

Page 37: 2010 - Vodacom

Vodacom Group Sustainability Report 2010 35

Environment

valuable exercise will also be informing our climate change policy.

Current energy saving initiatives are described in the next section.

����Material Issue����Energy efficiency/alternate energy

In South Africa, climate change is not the only driving factor behind

the move towards energy efficiency. The company also demands

more reliable electricity than is currently available from traditional

systems, as evidenced by the load-shedding and rolling blackouts

over the past few years. It is therefore a business imperative to

ensure a constant supply of energy to the systems critical to

Vodacom SA’s services, particularly network infrastructure.

Vodacom currently does not have a policy relating to energy

usage. There is also no formal engagement with employees in

the form of awareness or training. The Group is in the early

stages of establishing an energy management team, and once

this is functional, policy development and internal engagement

activities will be undertaken.

Vodacom SA is now a registered member of the Green Building

Council of South Africa (GBCSA). Our facilities team attended the

GBCSA conference in 2009 and three employees are being trained

as Vodacom SA Green Building agents this year. The GBCSA are in

the process of developing a tool to rate the energy efficiency of

our existing buildings.

Consumption of electricity and fossil fuels is currently measured

using estimates derived from billing details. Vodacom SA is

running a pilot programme for installing meters at certain

locations, and these measurements will be used as a determinant

for the level of accuracy of the data currently collected, and for

monitoring how effective current energy savings initiatives are.

Our energy usage for the reporting period is as follows:

SA energy usage

2010 2009 2008

Electricity buildings (million kWh) 118.9 80.6 74.1

Electricity sites (million kWh)* 154.2 188.6 163Diesel (million litres) 1.06 0.95 0.68Petrol (million litres) 1.43 1.27 1.3

* Electricity consumption at sites is an approximate value based on the use of averages. Vodacom SA is working on more accurate consumption measures.

Vodacom SA is working towards a realistic long-term target of 70%

energy savings at 3G base stations, and 40% at 2G base stations.

This is a multi-year project and we are upgrading several base

stations per year according to budget. As the rate of replacement is

dictated by depreciation, asset write-offs and other business drivers,

there is no clear target date for completing this programme.

The following table shows savings achieved from a single measured

site typical of Vodacom SA’s 2G and 3G base stations:

Total average kWh

RAN Swop

Pre total kW 3.11Post total kW 1.99kW reduction 1.13% reduction 36.22

Free Cooling

Pre total kW 1.99Post total kW 1.37kW reduction 0.62% reduction 31.21

Total reduction

Pre total kW 3.11Post total kW 1.37kW reduction 1.75% reduction 56.12

Key:

RAN Swop: Radio Access Network equipment renewal.

Free Cooling: supplementation of electronic air-conditioning with fresh air.

Every other item of existing radio network and core network is

being re-evaluated in terms of energy consumption and will be

included in all future decisions for roll-out and replacement.

Vodacom SA has formulated a strategic roadmap to achieve a

power saving of nearly 83 000 MWh and a carbon emissions

savings of nearly 74 000 tonnes CO2 over three years. This project

is currently on track, with actual CO2 savings for the past two years

as well as projected savings for the next financial year described in

the following table.

Free cooling

RAN swap

Hybrid power sites

Total

2 89

510

047

6 74

5

2 89

5

4 23

9

3 47

3

578

37 4

92

7 86

9

18 8

34

10 7

90

■ 2008/2009

■ 2009/210

■ 2010/2011

CO2 savings summary

Thou

sand

ton

nes

CO

2

Page 38: 2010 - Vodacom

36 Vodacom Group Sustainability Report 2010

Impact on the environment continued

Vodacom SA has deployed remote energy meters in 10% of its base stations in order to improve

the monitoring of network energy usage, and evaluate the effectiveness of various energy

savings initiatives. A further 1 500 meters will be installed in the next financial year. From these

initiatives, we have saved an estimated total of 23 575 MWh on our network during 2009/10.

A summary of our ongoing energy initiatives follows.

Alternative energy sources

We are committed to looking at alternative forms of energy supply to supplement Group energy

requirements. One of our experimental renewable initiatives involves installing fuel cells at

power base stations in order to supply electricity when unavailable. Vodacom SA has deployed

89 fuel cells at base stations during the financial year under review.

Vodacom is also awaiting the release of a new technology due in July 2010 which may prove

feasible as a replacement for stand-by generators, and we are also exploring the cost-

effectiveness of other alternative fuels through the Vodafone Green Energy Trials. Three base

station sites have been trialled with renewable energy solutions (two pure renewable solutions

and one a renewable/generator hybrid) in conjunction with Vodafone. All key performance

indicators have been achieved, but large scale roll-out is still being hampered by the theft of

solar equipment. Limited roll-out may take place in 2010 in areas deemed safe. A few trials are

ongoing with generator/battery hybrid solutions and a 50% reduction in diesel usage seems

realistic.

The move to ‘green’ our buildings

Green initiatives are currently being implemented but targets will be based on the rating tool

that is still anticipated from the GBCSA. Vodacom SA is focusing on two core areas: water usage

and energy consumption. The Durban office has been fitted with intelligent lighting and energy

efficient heating, ventilation and air-conditioning systems are being installed.

In existing buildings in South Africa, Vodacom has taken a number of steps to reduce energy

consumption, with a particular focus on initiatives to reduce the need for air-conditioning. For

example, the Midrand office uses sunlight deflection techniques to retain coolness while

another office has reduced the duty cycle of diesel generated air-conditioning. The IT

department have also implemented various initiatives to reduce cooling needs. During the last

financial year, Vodacom investigated the viability of a new technology involving ‘absorption

chillers’, but this was found to be ineffective in South Africa.

Reducing the need for powered air-conditioning at our base-stations

During 2008/9, we installed 280 free-cooling units at our base stations, to help reduce

air-conditioning use. We exceeded our target of a further 1 000 installations for 2009/10 with

1 300 units now installed. As anticipated , they are achieving a 60% reduction in energy usage.

Making Vodacom’s generators more efficient

Vodacom aims to reduce carbon emissions from diesel fuel using hybrid technology in

generators. The project is now approaching completion and has focused on the non-SA local

markets where the need for these is greater. Tanzania is currently rolling out 270 units. Full year

savings are estimated to halve fuel consumption per site.

89fuel cells have been deployed at base stations in SA during the financial year under review

876 kgCO2 saved

1 750 kWhelectricity saved

Earth hourThis year, Vodacom SA participated in Earth Hour. The company’s building-related energy savings were as follows:

Page 39: 2010 - Vodacom

Vodacom Group Sustainability Report 2010 37

Environment

Upgrading IT equipment

Vodacom SA has a policy of replacing and purchasing laptops with models that are less power

intensive with longer battery lives. This has the added benefit of allowing employees to

continue working for longer in the event of power outages.

Other local markets

An energy-use audit has been performed in the DRC, and the company is currently in the

process of replacing most of its base stations’ fossil power sources with solar or hybrid

systems to reduce carbon emission. Trials have been performed displaying good results.

The aim is to convert 180 sites to hybrid systems with limited solar power systems installed

by December 2010.

We are raising staff awareness in Mozambique through a campaign to turn off lights and

air-conditioning when leaving work. Hybrid power in the form of PVL, glass-type solar panels

and generators is being implemented in remote sites.

In Tanzania, hybrid power sources have been deployed to 20 sites, with plans to deploy a

further 276 in the coming year.

����Material Issue����Resource utilisation

As Vodacom is a growing business, it follows that our internal operations are associated with a

growing consumption of resources. We recognise our obligation to manage the resultant

impact on the environment. The resources we consume range from those related directly to our

buildings, such as electricity usage and water consumption, to those related to our information

management systems, such as data and switching centres. At Vodacom, we conscientiously

practise smarter management and environmentally ethical practices.

Vodacom SA has a corporate environmental policy which requires that resource consumption is

minimised. The implementation of this policy is delegated to the relevant divisions that initiate

their own activities. Details on energy use are described in the section on ‘Energy efficiency/

Alternate energy’.

Vodacom SA is currently engaging external parties for many of its resource management

requirements. The company has a strong supplier engagement programme, with checks in

place to ensure that suppliers are environmentally compliant. There are also plans to start

campaigns aimed at raising awareness amongst staff by the end of the next financial year.

Vodacom SA’s consumption of water and paper is shown in the table below. (See the section

on ‘Energy efficiency/alternate energy’ for details on energy savings).

SA resource utilisation

Year ended 31 March for Vodacom SA

2010 2009 2008

Water per employee (kl) 41.21 43.30 70.20Water total (kl) 209 576 216 721 335 990Paper per employee 41.65 34.90 33.40Paper total (kg) 211 797 174 497 160 000

20hybrid power sources have been deployed to sites in Tanzania

Page 40: 2010 - Vodacom

38 Vodacom Group Sustainability Report 2010

Impact on the environment continued

The figures show a consistent decrease in water consumption, attributed to Vodacom SA’s water

savings initiatives. Other initiatives being undertaken are described below.

Greening our catering facilities

Over the past few years, a number of measures have been implemented in our South African

catering facilities to reduce waste. For example, to reduce pollution all kitchens nationwide

have been fitted with fat traps and extraction canopy filters to degrease and eliminate fatty

substances from the production line (Midrand). Old cooking oil is now filtered and used in

diesel vehicles fitted with Straight Vegetable Oil kits, and 60% of our chemicals are now

biodegradable.

Using water wisely

While we are not measuring our water consumption at this stage, measures to reduce

consumption in its buildings continue. For example, water loss at the Midrand campus has been

minimised by introducing aquatic plants to decrease water surface areas exposed to sunlight.

Nationwide, irrigation time has been reduced and restricted to night-time, using water recycled

through the heating ventilation and air-conditioning system.

����Material Issue����E-waste

Waste is a serious issue in the fast-moving technology world, where newer and more

sophisticated products are constantly being replaced and consumed. With a scarce supply of

land for landfills, producers of goods need to become responsible for the entire lifecycle of their

products. In addition, these products, when entering the waste stream, are potentially

hazardous and need to be disposed of carefully. Vodacom focuses on three core areas of

e-waste, namely network equipment, IT waste and handset waste.

Network equipment and IT waste

Although Vodacom has not yet developed a robust system for measuring e-waste in South

Africa, certain controls in the finance environment ensure that all items that enter the IT and

network equipment waste streams are recorded. According to the e-waste recycling agency,

during the last reporting period approximately 208 tonnes of IT and network equipment was

recycled along with 4.5 tonnes of handsets.

Vodacom SA undertook a Green IT study approximately two years ago and, as part of this study,

e-waste processes were investigated. Some recommendations were made, but as yet no formal

internal structures have been set up.At present, many of the company’s old computers are

refurbished for reuse through the Vodacom Foundation in the NGO sector.

Recycling and scrapping of handsets

During the 2009/10 financial year, Vodacare (our handset repair network) sent approximately

13 290 handsets for recycling, compared with 12 400 in 2008/9. These were collected by

Vodacom SA’s nominated recycling agency, Desco Recycling. The company also recycled or

responsibly disposed of 1.8 tonnes of faulty mobile phone spares and accessories.

13 290handsets were sent for recycling by Vodacare, our handset repair network

208tonnes of IT and network equipment was recycled

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Vodacom Group Sustainability Report 2010 39

Environment

sharing, in order to determine the next appropriate location for

new base stations. All policies and processes related to the

placement of base stations are drafted by Vodacom SA’s safety,

health, environment and quality division. The processes are

implemented by the regional operations teams.

Local planning regulations must also be complied with and these

regulations include the requirement for community engagement

and environmental impact assessments (EIAs). For the EIA process,

Vodacom SA draws on the expertise of over 13 environmental

impact assessment consultants. The proposed sites undergo either

a basic assessment, or a more thorough scoping and EIA process,

depending on the sensitivity of the site. Non-sensitive sites (for

example, rooftop sites) are more likely to be subject to a basic

assessment whereas sites in ecologically sensitive rural areas may

be subject to the more thorough EIA process. Where Vodacom SA

occupies another party’s mast, no assessment is required.

Following the EIA process, the relevant authority will either grant

or refuse authorisation for Vodacom SA to proceed with its

proposal. The legislation is currently under review and will be

amended in respect to the various categories and the respective

types of assessment required.

Total number of base stations approved in 2009/10

Vodacom SA DRC Lesotho Mozambique Tanzania

815 25 120 120 124

Other local markets

The DRC government is currently preparing a law to prohibit the

commissioning of base station sites at schools and hospitals.

Vodacom’s internal policy is otherwise currently ahead of the

national environmental regulations on the issue.

The installation of base stations in Mozambique requires the prior

approval of the Civil Aviation Institute (CAI). During the year, the

CAI denied many of the applications filed by Vodacom due to the

location of denied sites being within the limits of National Defence

Ministry territory. To date, approximately 12 proposed sites still

have not been approved by the CAI and no alternatives have been

found. While Mozambique does not have a specific policy on

environmental issues, it is endeavouring to develop and implement

one in the next few months.

For Tanzania, obtaining building permits under the Environment

Management Act of 2004 has been the biggest challenge for the

past year.

Return processes are in place for specific faulty or scrap spares and

accessories with mobile phone manufacturers HTC and Samsung,

and Vodacom SA will be proceeding in this manner with Nokia in

the next few months. In terms of this process, specific faulty spares

and accessories are consolidated from the Vodacare franchise

outlets and returned to the manufacturers, who return these to

their scrapping centres internationally.

Other local markets

Mozambique does not yet have a policy regarding e-waste.

However, it signs an agreement with all critical suppliers making

them responsible for managing and disposing of Vodacom’s

e-waste in a responsible manner. The DRC has implemented a

waste management policy which deals with e-waste, while in

Tanzania e-waste is managed by the suppliers.

Placement of base stations

In order to provide a reliable service to our customers, Vodacom

needs a sophisticated and extensive network of base stations. With

over 8 000 base stations in a diverse range of areas, from urban

centres to the rural outback, this raises a number of potential

issues in relation to each new commission. Amongst others,

potential biodiversity impacts, visual impacts and community

impacts need to be considered, and prevented or mitigated.

Vodacom SA’s policies guide the positioning of base stations by

drawing on demographic studies, research results and customer

requests, as well as the location of other operator masts, for mast

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40 Vodacom Group Sustainability Report 2010

����Material Issue����Ethical business conduct

Ethical business conduct means that a company adheres to defined standards of behaviour that

should permeate the company’s culture, and motivate strategy, business goals, policies, objectives

and activities. Our culture is a strong measure of our organisational integrity and must be

demonstrable. In order to ensure a high level of ethics, management must acknowledge the risk

of dishonest behaviour and consider the role of legislation as a guide to mitigating this risk.

Guided by the King III Code of Corporate Practices and Conduct, Vodacom is committed to

creating a culture of ethical behaviour in the Group. The ethics and compliance group run the

Ethics Along the Way programme, guided by the Vodacom Way policy defining our key ethical

values. The Anti-Money Laundering Group is responsible for the Anti-Corruption, Money

Laundering and Financing of Terrorism (CMT) Compliance Programme.

Ethics

The Ethics Along the Way programme aims at enhancing strengths and weaknesses in two main

areas: thinking about ethics, and institutionalising and managing ethics. These were highlighted

as significant areas through a number of ethics risks assessments that were conducted for the

Group and its five local markets.

The performance of the programme is measured through quarterly progress reports (for the

Ethics Committee meetings, and Board and Audit Committee meetings), cyclical audits, an

ethics survey and the ethics risk/control matrix.

During the past year, the following progress has been made in South Africa in regard to ethics

management:

➾ Updated our ethics website to make it more interactive and effective as a platform for

creating awareness;

➾ Launched the Ethics Advice Line;

➾ Published the ‘Guideline for Content in the Workplace’; and

➾ The Vodacom SA Ethics Committee was established (after the Vodacom Group Ethics

Committee was dissolved), and meets as part of the Vodacom SA Exco meeting on a

quarterly basis.

Ethics training

Management training for South Africa, Tanzania, the DRC, Lesotho and Mozambique is 87%,

76%, 91%, 97% and 84% completed respectively. Once trained, managers are expected to apply

their new skills in ethical decision-making and management practices, as well as support the Ethics

and Compliance group and newly established company ethics committees in implementing their

programmes.

Social responsibility

Our culture is a strong measure of our organisational integrity and must be demonstrable. In order to ensure a high level of ethics, management must acknowledge the risk of dishonest behaviour and consider the role of legislation as a guide to mitigating this risk.

91%

97%

84% 87%

76%

■ South Africa

■ Tanzania

■ DRC

■ Lesotho

■ Mozambique

Ethics training% management training

for the 2009/10 financial year

% staff training

for the 2009/10 financial year

76%

88%

68% 61%

77%

■ South Africa

■ Tanzania

■ DRC

■ Lesotho

■ Mozambique

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Vodacom Group Sustainability Report 2010 41

Social Responsibility

Staff training in South Africa, Tanzania, the DRC, Lesotho and

Mozambique is 61%, 77%,76%, 88% and 68% completed

respectively. We aim to train a further 1 200 Group employees

during 2010/11 taking us to a percentage completion rate of 83%

(including all local markets). The Company aims to instil a culture

of ethics in all our employees.

While it is unlikely that 100% training will be achieved at any

cut-off point due to staff movements, Vodacom SA aims to achieve

at least 95% completion during the 2010/11 financial year after

which the percentage completion is likely to remain static at 95%

due to staff movements. The effectiveness of the overall training

will be measured during the ethics survey that will be conducted

during the 2010/11 financial year.

In addition to the training mentioned above, ethics training is

also provided by the customer care education, training and

development practitioners for temporary call centre employees

in our call centres. To date, 941 temporary customer care

employees have received training.

Further to the general ethics training offered to employees, an

additional hour of ethics induction presentations continues to be

offered on a monthly basis during the orientation programme to

new employees in Group and Vodacom SA. Cumulatively the

ethics presentations have been made to 425 new employees in

the Group.

The Group Code of Ethics

The review of the Vodacom Group Code of Ethics did not occur

during the 2009/10 financial year, as previously planned. The

Code of Ethics will be reviewed during the first quarter of 2010/11.

Institutionalisation of ethics

The respective committees continue to meet on a quarterly basis.

Since its inception in August 2009, our ethics committee in South

Africa has met three times.

Ethics champions

The Vodacom Group ethics champions have been nominated to

raise awareness by encouraging forums and facilitating ethics

management initiatives implemented by the ethics and

compliance team. Ethics champions do not provide advice; this is

dealt with by line management or the Ethics and compliance,

legal or human resources teams.

Plans for the next financial year include creating ethics awareness by

publishing quarterly articles on specific ethics risk areas, as well as

conducting the ethics survey and associated awareness campaigns.

Anti-Corruption, Money Laundering and Terrorist

Financing compliance programme

Instilling a culture of ethics in the organisation is key to managing

the risk related to the prevention and detection of CMT. The

Anti-CMT compliance programme includes the following

elements.

Knowledge base

As developments occur, our international and country specific

CMT risk and CMT policy, law and administration databases are

continually being augmented. Specialist legal counsel provides

advice on CMT risk management in operating countries, and

various governance and CMT indicators are regularly monitored.

Monitoring also occurs in those countries in which possible

investments are being contemplated or pursued.

Risk assessment and risk management strategy and design

Vodacom Group CMT country and company risk assessments are

updated annually for all network operating subsidiaries. Based on

the findings, CMT risk management strategies and programmes

are modified to manage the various levels of risk.

Implementation

The Group anti-CMT code of compliance continues to be

implemented. Ethics and compliance officers assist and advise on

the implementation of the programme.

Training of all high risk divisions and middle management has

been completed, and Vodacom SA is on course to train junior

management and other employees. Training of executives is a

challenge, and this has been raised through the company risk

assessment process.

All Vodacom companies are required to implement a formal

approval process and maintain registers of gifts and hospitality

received or given by personnel in accordance with Group policies

and procedures. There are various restrictions applied; for example

approval is required for any gifts above R500. Vodacom SA and

Vodacom Group have faced some challenges with this policy;

specifically a lack of awareness and misinterpretation by staff of the

policy. This policy is currently being reworded to ensure correct

interpretation and training on this policy is intensified.

The electronic gifts receiving register was launched during the last

financial year. Vodacom has been working to ensure that the

system operates optimally and that our people are aware of how

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42 Vodacom Group Sustainability Report 2010

be on client confidentiality and reducing the incidences of disclosure

of client information. Externally, focus will be on reducing the issue

of subscription fraud. The launch of M-Pesa (banking product) will

also be a challenge.

����Material Issue����Regulation of Interception of Communications Act

(RICA)

On 1 July 2009, the RICA law was implemented in South Africa.

This requires everyone who has an active mobile phone number,

or purchases a new prepaid starter pack, to register their SIM

cards. All current and new contract, top-up and prepaid customers

are required to register their SIM cards by 31 December 2010. This

represents a challenge for Vodacom as there is the potential to lose

a large number of prepaid customers if the registration process is

not completed on schedule. There are three main challenges that

RICA poses for Vodacom SA:

➾ The registration of customers who don’t have formal proof of

address documents;

➾ Ensuring that all existing customers are registered prior to

31 December 2010; and

➾ Making it possible for all our customers who live in remote

areas to be able to register.

At a formal level, Vodacom is engaging the Department of Justice

and Constitutional Development (DoJ) and both the Parliamentary

Portfolio Committee on Justice (PPC) and the Select Committee

on Security and Constitutional Affairs. A progress report on the

implementation of RICA, its impact on the business, challenges

encountered and how they can be resolved was submitted to the

DoJ, the PPC and the Select Committee in January 2010.

Vodacom has invested a substantial amount of money to ensure

that people, processes and systems are geared for RICA and that

RICA is fully integrated into all the company’s business

processes. More than 13 000 terminals at points of sale have

been installed to enable new customers to register and more

than 113 000 registration agents have been appointed and

trained. These processes have been implemented both for new

acquisitions and existing customers. Vodacom has also

incentivised business partners to register existing customers by

paying them a fee for every customer they register. Customers

who register have also been incentivised with free airtime and

SMSs.

to use it. During the 2009/10 financial year, there were 179

declarations of gifts received. While it is not easy to determine

instances of corruption, if suspicious incidences do occur they are

referred to the fraud detection department. These are dealt with

through appropriate channels.

Fraud and corruption

Fraud and corruption are dealt with by the forensic services team.

Vodacom categorises fraud into internal and external cases. Internal

fraud is generally tracked through audit trails, which are applied to

all activities. Examples of external fraud include subscription fraud

and identity theft. Vodacom has robust technological systems which

track and record trends in mobile usage and are able to detect

when suspicious activities occur. Another measure includes fraud risk

analysis of new products by risk management. Products are not

released until they receive sign off from this team.

A record is kept and reported quarterly to the risk committee.

Suspected incidences of fraud or corruption are dealt with through

investigation, and escalated through appropriate channels. If

necessary, these can be escalated to a criminal case, which is then

dealt with by the South African Police.

The number of cases of fraud for the 2009/10 financial year is as

follows.

SA fraud cases

2009/10 2008/9

Internal fraud cases 286 312External fraud cases 3 163 2 743

The increase in the number of external cases (75% of which are

subscription fraud) can be attributed to a growth in customer base.

It should be noted that this number represents approximately

0.01% of the subscriber base, which means that fraud prevention is

being well managed. However, Vodacom SA continues to work

towards improving on this level through prevention (focusing on

ethics and compliance), detection and investigation.

While Vodacom SA has not experienced any cases of true

corruption, there have been incidences where unintentional cases

have been detected, and these were intercepted and diffused

through due-diligence and corrective action as stipulated in the

policy processes.

During the 2010/11 financial year, Vodacom SA is planning a

campaign to promote its whistleblowing hotline. Internal focus will

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Vodacom Group Sustainability Report 2010 43

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distinguish between ethical and unethical behaviours. Ethics

champions have been nominated; however, their role needs to

be further defined. During 2010/11, the online ethics awareness

programme will be promoted.

The Anti-CMT Code of compliance has been successfully

implemented. Monthly fraud statistics from Tanzania are sent to

Group Enterprise Risk Management for consolidation before being

reported to management internally. Several incidents have been

reported and escalated to the appropriate authorities for further

action. Tanzania aims to minimise fraudulent/corrupt practices

through appropriate screening of prospective employees prior to

engagement, as well as employee training to develop a sensitivity

to fraudulent/corrupt acts.

����Material Issue����Privacy

Privacy is a fundamental human right, and while new technologies

come with many valuable benefits, they also create new challenges

for the protection of personal information. As a provider of these

technologies, we have an obligation to protect individuals from

intentional or unintentional disclosure or misuse of personal

information.

Vodacom has a dedicated privacy officer (Executive Director:

Regulatory Affairs) and we have various policies, procedures and

processes in place to ensure that information is not unlawfully

disclosed. Some of the control mechanisms we use include:

➾ Audit trails in all systems that interface with the customer or

handling of customer information;

➾ An Access Monitoring Policy that discourages unlawful access

and or disclosure of customers’ information;

➾ Deterrence of potential perpetrators by adopting strict

disciplinary action regarding issues of invasion/breach of

customer information; and

➾ Regular trade bulletins and electronic newsletters to alert

employees and trade partners regarding confidentiality of

customer information.

This is also provided for in the Group’s disciplinary policy and

code and a zero tolerance approach is followed regarding policy

transgression. Our employees cannot intercept calls, SMSs or any

other type of messages sent from one person to another. This

information may be intercepted only if properly authorised in

terms of the provisions of the RICA.

The implementation of RICA has resulted in a significant reduction

in new customer acquisitions with year-on-year reductions of more

than 40% in prepaid sales. This is largely due to the onerous

registrations requirements that are now part of the purchase

process, and partly due to many customers (particularly in the

informal market) not being able to provide valid proof-of-address

documentation.

Vodacom’s primary target is to make the RICA registration

process as simple as possible for both existing and new

customers while ensuring that all existing customers are

registered by 31 December 2010.

Other local markets

The World Bank and other international agencies and non-

governmental organisations list the DRC as one of the most

challenging governance and CMT environments in the world.

With this in mind, the Group code of ethics is currently being

translated into French, and the DRC is focusing strongly on

having a robust ethics programme in place. Ethics training has

occurred across the country and feedback has been positive. The

‘Ethics along the way’ programme has been implemented and

ethics champions are currently being nominated for

appointment.

In Lesotho, 90% of all staff have been through ethics training. An

ethics committee has been established and meets quarterly. Ethics

information has been launched on the intranet, and the activities

of ethics champions have been formalised, drawing on updated

Group ethics objectives.

During 2009/10, the Mozambican ethics committee was

consolidated and ethics training was carried out. The Ethics

Champions Charter was translated into Portuguese and inputs are

being collected from Ethics Committee members to inform the

final version. Once this has been approved and issued, the ethics

champions will be nominated and trained. Ethics is still a challenge

in Mozambique as employees do not fully understand what may

constitute a breach of ethics. Regular ethics sessions are being

carried out and it is hoped that the translated code and charter

will improve ethics management.

The Tanzanian ethics committee meets on a quarterly basis to

review ethics issues. While budget constraints and training

logistics are a challenge, over 80% of employees participated in

ethics awareness sessions during 2009. Staff are now aware of

what is expected from them by the Company and are able to

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44 Vodacom Group Sustainability Report 2010

Other local markets

In Mozambique, a privacy policy is being developed which should

be implemented during the course of 2010/11. In addition, the

process of identifying a Board director (with responsibility for

reporting to the Board on privacy-related matters and risks), and a

Privacy Officer (with day-to-day responsibility for implementing

operational structures, processes and measures), is underway.

Employees are trained on the importance of protecting privacy

and on the proper access to, use and disclosure of customer

information. Under current security practices and policies, access

to personally identifiable information is authorised only for those

who have a business need for such access.

The Tanzanian Communications (Consumer Protection) Regulations

of 2005 governs privacy and client confidentiality issues. The

company issues information upon request by law enforcement

agencies and penalties are imposed for any violations.

����Material Issue����Content standards/protecting vulnerable users

While mobile communications opens the door to many beneficial

products and services, it also creates a portal for adult or other

content considered inappropriate for certain users which can be

accessed through various channels such as SMS, MMS, USSD and

the Internet. In addition to this, customers can also be targeted by

scam fraudsters via these channels. As a provider of mobile

technologies, we have a responsibility to ensure that use of these

technologies causes no detriment to vulnerable users, as well as to

ensure that these channels are not abused.

At industry level, these issues are governed by WASPA who has

developed a Code of Conduct through which users are protected

from spam, subscription services, mobile content services, and

paying for adult content on the handset. During the previous

reporting year, WASPA tightened these controls further, including

instituting further sanctions against WASPs who breach the Code

of Conduct. Vodacom SA does not grant operating licences to

WASPs who are not members of WASPA.

Vodacom subscribes to the Vodafone Group standards in its

approach to adult content on its channels, with various initiatives

to ensure the responsible delivery of this content including access

control, warning screens, an ‘opt-out’ mechanism and parent’s

guide to protecting children from harmful content. All WASPs on

Vodacom SA’s network need to comply with all applicable laws,

the WASPA Code of Conduct and WASPA advertising guidelines.

The South African Protection of Personal Information Draft Act

(2005) was approved in August 2009. Vodacom made a

submission on the draft act as published by the Department of

Justice and Constitutional Development in 2005, prior to its

tabling in parliament. The version that was tabled in parliament

in 2009 addressed all the key concerns raised by Vodacom on

the initial draft. Negotiations for the establishment of an

industry forum are now at an early stage. Given the multitude

of licensed entities in the sector and the need to make the

process more manageable, the current discussions have been

initiated at the level of infrastructure-based licensees.

Wireless Application Service Providers (WASPs)

Due to the potential infringement of customer privacy associated

with the use of location-based services (LBS), Vodacom SA has

instituted strict guidelines for its provision to WASPs. Providers

must undergo an audit process prior to the approval of the

deployment of LBS and users have to consent to being tracked

(please see the section on ‘Content Standards/Protecting

vulnerable users’). The Wireless Application Service Providers

Association (WASPA), the industry regulator, also has its own

rigorous adjudication and due diligence processes which it

follows and has, for example, suspended two service providers

who may no longer operate in South Africa as a result. These

measures have restricted the violation of privacy rules on the

Vodacom network.

Vodacom is also a signatory to the Code of Conduct for

Cellular Operators in South Africa which commits us to adhere

to certain standards, ensuring protection of consumers against

harmful behaviour by WASPs using the Group’s network. We

measure the extent of violations of these rules and aim for

zero incidents. During the last financial year, there were 12

proven incidents.

Commercial business partners are now in the process of

implementing technical solutions to address compliance to business

rules as these are not always adhered to by rogue operators.

Vodacom SA has teams of testers who check WASP services for

quality and compliance, and report cases of non-compliance.

We provide training to all customer-facing employees as well as service

providers on our privacy policies and how to deal with incidences of

non-compliance. Staff are required to adhere to strict rules and

procedures when dealing with customer information. Training on the

provisions of the Access to Information Act is also provided.

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New applicants (WASPs wanting to use location-based services) must complete a two-part audit: a

business processes audit done by an independent auditing company, and a technical process

audit done by the auditing company in conjunction with Vodacom SA. The technical team has to

ensure compliance with technical criteria when the WASP is testing. The location-based services

support technical team has not identified or notified the Group of any breaches on the service

gateway platform by any WASP.

Interacting with stakeholders

ICASA, the South African Government and Films and Publications Board meet with Vodacom

when necessaryto discuss matters of mutual interest around mobile content. The Department of

Home Affairs Ministerial Task Team on the Prevention of Child Pornography holds its meetings at

least twice a year. These are standing meetings to identify and discuss trends in the country on

issues pertaining to child pornography, different measures that are in place to combat it, the

efficiency of current policies and legislation in protecting children against child pornography,

etc.

In the 2009/10 financial year, Vodacom was invited to and participated in two meetings with

the South African Films and Publications Board in relation to various campaigns to raise

awareness for the protection of women and children.

The Films and Publications Board (FPB) has introduced two initiatives for 2010 which are still in

the early stages:

(a) An awareness campaign to highlight child pornography and the need for heightened child

protection measures during the period of the 2010 FIFA World Cup. The Board is engaging

various entities for partnerships for the campaign, including Vodacom; and

(b) The establishment of an Internet Safety and Security Forum with specific focus on safe use

of the Internet by children. Discussions as to the constitution of the forum; its role and

powers, are ongoing. The FPB, the Ministry of Home Affairs and the Ministry of Education

are collaborating in the development of the forum. As one of the leading providers of

mobile communications services, Vodacom hopes to play a key role in educating young

people and its customers in general about the responsible and safe use of mobile Internet

and social networking services.

Vodacom also attends, per invitation, the WASPA AGM and the monthly WASPA Committee

meetings. Vodacom Service Provider, the legal entity that houses Vodacom SA’s internal WASP

division is a member of WASPA in its capacity as a WASP, and Vodacom (Pty) Ltd (the licensed

entity) supports WASPA in a variety of ways including:

➾ Contributing to WASPAs operational costs on a monthly basis; and

➾ Mandating compliance to the WASPA Code of Conduct and Advertising Guidelines by all

WASPs using its network.

Performance

In the past year, Vodacom SA has noticed a decrease in the number of WASPA queries, although

the stricter controls have not necessarily deterred rogue activity. Below is a customer information

centre report indicating the number of escalated WASP queries which show a healthy decline.May09

Apr09

Jul09

Aug09

Jun09

Oct09

Sept09

Dec09

Nov09

Feb10

Jan10

6 08

6

2 35

5

1 17

9

1 04

4

909

814

738

626

801

646

755

Number of escalated WASP queries

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46 Vodacom Group Sustainability Report 2010

The decrease could be attributable to a number of factors, including the following:

1. The tighter and more punitive penalties put in place by WASPA – fines for contravention of

the Code of Conduct have been increased;

2. The industry monitors put in place by WASPA to monitor any form of abuse which is

reported. This has resulted in the suspension of services that do not comply with the Code of

Conduct; and

3. Vodacom SA has implemented a WASP content-testing department which monitors

compliance to business rules and has helped reduce the contravention of these rules.

While these measures are effective, the risk of abuse still exists. More robust customer protection

measures are required such as a double-opt-in rule which requires customers who subscribe to

WASP services to confirm their requests prior to being billed. These measures have been proven

to reduce revenue but are deemed necessary for the protection of customers from rogue

activity. Vodacom SA was instrumental in initiating the double-opt-in measure and WASPA will

be adding such a rule to their Code of Conduct. This measure has become a necessity to ensure

the credibility of WASP services.

Customers can report instances of abuse to WASPA via email ([email protected]), fax

(086 606 2016) or postal address (WASPA, PO Box 3143, Parklands, 2121) as well as at the

WASPA website http://www.waspa.org.za. (A direct link is http://www.waspa.org.za/code/

complaint.shtml). Alternatively they can direct their complaints to Vodacom SA via telephone

(082 111 / 082 114), fax (0860 082 082) or email ([email protected]).

Goals for 2010

We are committed to increasing controls on potentially harmful content and aim to keep

developing measures to achieve this. Other than the double-opt-in measure, Vodacom SA is also

developing a comprehensive technical solution to enforce compliance which it hopes to

implement in the last quarter of 2010.

Vodacom SA aims to be at the forefront of all major initiatives in the country (either by industry,

government or FPB) aimed at fostering an appropriate regulatory/legislative framework for the

protection of children against age-inappropriate and/or illegal content. To this end, the

company will continue to participate in the various initiatives currently underway or proposed.

Other local markets

Given the generally low levels of wireless application activity in Vodacom’s non-SA markets,

WASP activity is not currently considered a particularly material issue. However, there are

regulatory measures in place. For example, Mozambique’s Regulatory Authority requires all

WASPs to register with it before commencing with operations, and in Tanzania the TCRA

Consumer Protection Regulations provides for the necessary safeguards.

����Material Issue����EMF compliance

While increased network coverage is generally welcomed as it facilitates an excellent level of

service to our customers, some people are concerned about the potential health effects of

electromagnetic fields (EMF) exposure. To date, experts have not found any convincing

Vodacom engages with the South African Health Department’s Directorate for Radiation Control annually to keep informed about any developments in local regulation. The industry is currently anticipating a draft South African RF standard for best practice.

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Minutes from the EMF Council meetings are then reported back to

the CEO by the Council Chairman. The matter is governed at the

policy level by Vodafone’s Health, Safety and Well-being Standard.

The purpose of the EMF Council is to ensure that the multi-faceted

nature of EMF risk management is identified and mitigated. Group

internal audit assists the EMF leader in managing the risk by auditing

the individual areas of the business and determining whether or not

controls are adequate and effective. The Risk Management

Committee reports on developments to the Vodacom Board.

Vodacom engages with the South African Health Department’s

Directorate for Radiation Control annually to keep informed about

any developments in local regulation. The industry is currently

anticipating a draft South African EMF standard and best practice

protocol. Local communities are engaged on a case-by-case basis

when commissioning new base station sites and an extensive

corporate communications plan is in place to improve

relationships with municipalities. Vodacom SA and its consultants

are now engaging with municipalities in more constructive and

imaginative ways in order to facilitate a better understanding by

interested and affected parties involved in the EMF issue.

Information on EMF exposure is communicated to customers

through the website (section on ‘base station safety’), and supplies

data on base station field measurements recorded across the

network at http://emf.vodacom.co.za.

A stakeholder engagement opinion survey was undertaken by

Nunwood Consulting in 2008, commissioned by Vodafone Group,

to provide independent feedback on the health of Vodafone’s EMF

stakeholder relationships, and Vodacom was involved as operating

Vodafone Group company. One hundred stakeholders were

surveyed over more than 20 markets. The number per market was

not large enough to provide reliable statistical information, but

rather gives an indication of stakeholder satisfaction across the

Vodafone Group.

The findings and recommendations emanating from the survey

may best be summarised as follows:

➾ The Vodafone Group (including Vodacom) should highlight to

stakeholders the education/consultation initiatives that it

undertakes to reassure the general public that it has a

responsible approach toward EMF risk management;

➾ The Vodafone Group should pursue a policy of co-location of

masts wherever possible;

evidence that EMF exposure when operated within international

guidelines is harmful to human health; however, some individual

research studies have suggested that using a mobile phone could

affect health. We recognise these concerns and are committed to

safeguarding the health and safety of our customers, employees

and the public.

The International Commission for Non-Ionizing Radiation

Protection (ICNIRP) guidelines establish permitted levels of EMF

exposure, and mobile phones and antennas are designed to

operate within these stringent levels. The levels include a safety

margin designed to assure the safety of all persons, regardless of

age and health. The World Health Organisation (WHO) endorses

the ICNIRP’s guidelines, and is conducting an international EMF

risk assessment programme. Until the WHO concludes its

international risk assessment, at Vodacom, we align our EMF policy

with the WHO’s contemporary best practice recommendations.

In May 2010, the International Agency for Research on Cancer

(IARC) published the first combined findings from all study centres

of the Interphone study, a major piece of research into the possible

health effects of mobile phones. The study concluded that overall

no increase in risk of glioma or meningioma (tumours of the head)

was observed with the use of mobile phones. While researchers

reported that there were suggestions that there may be an

increased risk of glioma at the highest exposure levels, they

discussed the limitations in the study that prevent a causal

interpretation. IARC recommends further investigation into

long-term heavy use of mobile devices. International studies into

such long term use and use by children are already underway, as

the WHO has already identified these as priorities.

The overall findings are consistent with expert reviews of the large

body of existing research. More than 30 authoritative expert reviews

over the last eight years, including work by the World Health

Organization, have found no adverse health effects from using

mobile devices operating within international safety guidelines.

The Vodacom Group has an EMF Council that meets three to four

times a year. Representatives from group marketing, regulatory,

legal, operations, communications, CSI and health and safety sit

on the Council and act as risk owners. The local markets are

represented by the EMF leader for the Group, who reports on

Vodafone EMF requirements, best practice and current research.

The Group EMF leader keeps track of recent developments in EMF

Health and Safety research through attendance of international

forums, and in conjunction with the Vodafone EMF leadership.

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48 Vodacom Group Sustainability Report 2010

In Mozambique, EMF exposure is managed by the subcontracted

auditor EMSS. While there has been no interaction with regulatory

bodies to date, Group policies on monitoring of EMF exposure are

complied with. As part of the external stakeholder engagement

strategy, the aim is to start engaging selected institutions about

the company’s initiatives to address EMF exposure. Full compliance

of high priority rooftop sites to the Vodafone standard is nearing

completion. Thirty-eight employees have undergone EMF training.

The Tanzanian Communications Regulatory Authority (TCRA)

and the National Environmental Management Council are

engaged with regularly in respect to EMF exposure. The TCRA

has recently issued a public notice on the effect of EMF

Exposure. (www.tcra.go.tz).

There is currently no public body for regulating EMF exposure in

the DRC. This risk is managed internally and in the absence of

formal regulation the company aims to ensure compliance with

Group and international best practice.

����Material Issue����Contribution to communities (CSI)

In South Africa, the Vodacom Foundation has evolved from

compliance-based charitable giving to a more strategic focus

aligned with business imperatives. The Foundation is run as an

internal business unit, with a dedicated risk management

division. We are in the process of registering the Vodacom

Foundation Trust as a not-for-profit entity to enable us to

leverage our extensive customer base for fundraising initiatives

for causes such as natural disasters.

➾ Following the initial consultation process that accompanies the

installation of a mast, the Vodafone Group should issue further

communications detailing how public concerns have been

taken into account;

➾ Stakeholders have demonstrated concerns about handset use

by children, and the Vodafone Group should be mindful of

this and ensure that marketing campaigns do not appeal

directly to minors;

➾ Safety information should be provided with handsets at the

point of sale to allow the user to make better informed

decisions about responsible usage;

➾ Personal (face-to-face) interaction with stakeholders is the

most effective way of conveying the Vodafone Group’s

responsibility toward EMF matters;

➾ The EMF resources available online are valued by those who

use them; however, to encourage engagement and awareness,

local EMF teams should remind stakeholders that the web

resource is available.

It is anticipated that there will be a follow-up survey in the last

quarter of the 2010/11 financial year.

Within the Vodafone global team, the EMF toolkit, an electronic

communication channel developed by Vodafone, has been rolled

out. This includes an ongoing training program across Vodacom

designed to raise awareness in the area of EMF Risk

Communication. Sections of the training programme will soon be

integrated with the activities of the Vodacom Group

Communications team to enhance their media response library.

Vodacom SA is aiming for 100% compliance with the Vodafone

Group Policy Standard on EMF Health and Safety by October

2010.

Other local markets

Vodacom Lesotho regularly engages the Lesotho Regulatory

Authority is, and an external stakeholder engagement framework

has been developed with its own dedicated management position.

EMF exposure issues are driven by the legal and regulatory division

with the Managing Director monitoring activity. Still in its infancy,

key issues for each stakeholder have been identified. Prior to being

included in the stakeholder engagement framework for more

focused communication, local authorities were communicated

with on an ad hoc basis.

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Approach

The Vodacom Foundation in South Africa receives a budget allocation from the company

each year, which it allocates to projects selected in accordance with its strategy. Criteria

for allocating Foundation support include the potential to use ICT to address social

challenges, the degree of impact, partnerships, sustainability, sound governance, track

record and solvency. Since the inclusion of a dedicated risk management unit with the

Foundation, it has become more circumspect about whom it funds. Where identified risks

can be mitigated, they are highlighted as part of the recommendations for Board approval

of project funding, and site visits are conducted in the case of shortlisted projects.

The Foundation has developed a formal business plan based on its new CSI strategy.

Recognising that mobile communications can be harnessed to deliver social benefit, the

community development strategy was recently revised and now places a stronger

emphasis on ICT-enabled projects, and this has led to fewer projects receiving support

for a longer duration. Over the next year, project expenditure aligned to ICT is targeted

to exceed 50%. Projects are also chosen to leverage services such as SMS and USSD in

support of community health, education and security. These projects are divided into

two main funding categories, and provisions are also made for grants to ad hoc

projects, as follows:

➾ Social leadership projects (50% of the budget): These use communication technologies

to help solve social problems. They are high cost, multi-year and Vodacom SA-led projects

which are sourced proactively.

➾ Social investment projects (30% of the budget): These are moderate-cost, three-year

(renewable) NGO-led projects with which Vodacom SA may want to associate. Some

applications are entertained.

➾ Ad hoc projects (20% of the budget): These are introductory, once-off projects

requiring modest contributions relating to research, emergencies, poverty alleviation,

the environment, and arts and culture. Other projects in areas such as security, arts and

culture, community sport, and the environment are funded on a case-by-case basis.

Staff involvement

Our Foundation in South Africa provides support in the form of cash, in-kind giving, time

and skills. There are currently 2 175 employee volunteers, known as Yebo Heroes, who

drive collection campaigns to obtain books, clothing, blankets and other much needed

items. Staff are also able to contribute through deductions from salary through our

Payroll-Giving platform. These contributions totalled over R722 000 this year, with 1 220

registered payroll contributors. Cash support usually consists of once-off donations, or

one- to three-year funding agreements. Time and skills contributions are driven by Yebo

Heroes in the form of relief duty, gardening, painting and tree-planting. Staff completed

73 volunteer projects this year.

1 275employee volunteers, known as Yebo Heroes who drive collection campaigns to obtain books, clothing, blankets and other much needed items

R772 000was contributed by staff deductions through our Payroll-Giving platform with 1 220 registered payroll contributors

73volunteer projects were completed by staff this year

Time and skills contributions are driven by Yebo Heroes in the form of relief duty, gardening, painting and tree-planting.

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50 Vodacom Group Sustainability Report 2010

Stakeholder engagement

Vodacom SA Foundation has strong relationships with stakeholders such as the government

departments of education and health, at national, provincial and local levels.

During the 2009/10 financial year, a voluntary Beneficiary Forum, comprising of organisations

funded beyond a once-off basis, was established. This convenes twice a year with those unable

to attend joining by conference call. The Forum seeks to encourage information sharing as well as

best practice amongst the beneficiaries, as well as in dealings with Vodacom SA. No structured

engagement with indirect stakeholders like civil society is presently taking place.

In April 2009, the Vodacom Foundation in South Africa launched its website to serve as an

interactive communication portal for engaging with stakeholders ranging from government

and implementing partners, to communities and individuals. This is proving to be effective in

complementing other means of communications such as the intranet and newsletters to staff,

and company publications and press statements. It is also used to complement the Beneficiary

Forum, and for active searches for partnerships with government departments, as in building

classrooms on a 50-50 basis and other foundations like the Nelson Mandela Foundation, as well

as the CSI divisions of companies like Microsoft, Altech and Altron.

The risk management department within the Foundation also undertakes monitoring of a

number of key performance areas including the following:

➾ Accreditation of beneficiary organisations;

➾ Capacity building in beneficiary organisations;

➾ Coordination of CSI conducted by other divisions of the company;

➾ Monitoring of performance against the DTI BBBEE scorecard;

➾ Systems compliance and reporting; and

➾ Early warning systems.

Projects recommended by the Board of Advisers are visited and scored by independent service

providers. Regular visits by Vodacom Foundation employees are conducted during

implementation. Post-project audits are also conducted to inform decisions to renew or

discontinue projects.

Performance and evaluation

During the 2009/10 financial year, the Vodacom Foundation in South Africa contributed

R68.6 million, a 2% increase over the prior year. Cumulatively, this brings the Foundation’s

total investment since its inception a decade ago to over R500 million. A further R11.5 million

constitutes CSI activities conducted by other divisions of the company.

Other than the ongoing annual Tries for Smiles, Birdies for Kiddies and Goals for Campaigns

presented jointly with the marketing division, there have been no other notable campaigns for

the 2009/10 financial year.

For details of Vodacom Foundation’s main achievements in South Africa, please see the

Foundation website at www.vodacom.com/vodacomfoundation.

South AfricaR68.6 millionCSI spend

for the 2009/10 financial year

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Vodacom Group Sustainability Report 2010 51

Social Responsibility

Future goals

Two ICT resource centres will be implemented this year in partnership with the national education

department and other corporate sponsors. The centres will offer ICT services to community

members and schools alike. Once these pilot centres are up and running, Vodacom is considering

developing a further two centres in two other provinces in South Africa.

Other local markets

The Vodacom Congo Foundation allocated approximately R3.25 million to CSI for the 2009/10

financial year. VCF focuses on six areas: education, health, welfare, environment, culture and

arts. The CSI spend supports a wide range of projects, initiatives and activities independently or

in partnership with local communities, international NGOs, and occasionally with the

government. Vodacom Congo Foundation drives all process and delivers turn-key assets to

stakeholders, to avoid misuse of funds.

Lesotho’s CSI spend for the last financial year was R2.76 million. This was distributed amongst

eight beneficiaries, in areas including health, education, sports, community and technology.

Lesotho engages with stakeholders through government and parastatal structures, as well as

through various forms of media.

For the last financial year, primary CSI focus areas for Mozambique were education, health,

safety and security. The secondary focus areas for the same period were environment, arts

and culture, and community sports. Mozambique spent approximately R4.7 million in

2009/10 (2008/9: R4.3 million). Organisations are selected through the government’s Plan

of Action for the Reduction of Absolute Poverty (PARPA) and attempts are made to

understand their specific needs in areas such as education and health (needs previously

identified by PARPA and aligned with Mozambique’s CSI strategy). The Ministry of Education

received the lion’s share of Mozambique’s support during the 2009/10 financial year.

Whenever possible, approved NGOs and foundations are sought as partners in the

execution of CSI activities.

Tanzania’s CSI strategy focuses on establishing social infrastructure and uplifting

communities through economic empowerment, education and health initiatives. During

2009/10, the Tanzanian Foundation spent almost R3.4 million on CSI programmes. Through

partnering with various organisations, the Foundation is able to deliver various programmes

such as Share and Care (which helps orphanages develop income generation projects), as

well as education and health programmes. This year saw the launch of the new M-Pesa

Women’s Empowerment Initiative.

LESOTHOR2.76 millionCSI spend

for the 2009/10 financial year

DRCR3.25 millionCSI spend

for the 2009/10 financial year

MozambiqueR4.7 millionCSI spend

for the 2009/10 financial year

TanzaniaR3.4 millionCSI spend

for the 2009/10 financial year

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52 Vodacom Group Sustainability Report 2010

Global Reporting Index Table

GRI indicator Description of indicator

Extent of coverage for GRI Level C Reference/Section

Strategy and analysis

1.1 Statement from the most senior decision-maker of the organisation

Full SR (Sustainability Report) – CEO Message

1.2 Description of key impacts, risks and opportunities Full SR – CEO Message; Material issues table

Organisational profile

2.1 Name of the organisation Full SR, AR and Website www.vodacom.com

2.2 Primary brands, products, and/or services Full SR – About the company; Website - www.vodacom.com

2.3 Operational structure of the organisation Full SR – About the company

2.4 Location of the organisation’s headquarters Full Website - www.vodacom.com

2.5 Countries in which the organisation’s operations are located

Full Website - www.vodacom.com

2.6 Nature of ownership

2.7 Markets served Full SR – About the company

2.8 Scale of the reporting organisation Full SR - Employees

2.9 Significant changes during the reporting period in terms of size, structure or ownership

Not applicable

2.10 Awards received during the reporting period Full None

Report profile

3.1 Reporting period for information provided Full SR – About this report

3.2 Date of most recent previous report Full SR – About this report

3.3 Reporting cycle Full SR – About this report

3.4 Contact point for questions about the report or its contents

Full SR – About this report

Report scope and boundary

3.5 Process for defining report content Full SR – Stakeholder engagement

3.6 Boundary of the report Full SR – About this report

3.7 Any specific limitations on the scope or boundary of the report

Full SR – About this report

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations and other entities that can significantly affect comparability from period to period and/or between organisations

Full SR – About this report

3.9 Data measurement techniques used Partial SR – Various sections

3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement

Not applicable

3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the report

Not applicable

3.12 Table identifying the location of the standard disclosures in the report

Full SR – This GRI table

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Vodacom Group Sustainability Report 2010 53

GRI Index

GRI indicator Description of indicator

Extent of coverage for GRI Level C Reference/Section

Report assurance

3.13 Policy and current practice with regard to seeking external assurance for the report.

Full SR – About this report

Governance, commitments and engagement

4.1 Governance structure of the organisation, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight

Full AR (Annual Report) – Corporate Governance statement

4.2 Indicate whether the chair of the highest governance body is also an executive officer

Full Chair is not an executive director

4.3 For organisations with a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members

Not applicable

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body

Partial AR – Corporate governance statement

4.5 Linkage between compensation for members of the highest governance body, senior managers and executives and the organisation’s performance

Partial AR – Corporate governance statement

4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided

Not reported

4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organisation’s strategy on economic, environmental and social topics

Partial AR – Corporate governance statement

4.8 Internally developed statements of mission or values, codes of conduct and principles relevant to economic, environmental and social performance and the status of their implementation

Not reported

4.9 Procedures of the highest governance body for overseeing the organisation’s identification and management of economic, environmental and social performance, including relevant risks and opportunities, and adherence or compliance with international agreements

Partial AR – Corporate governance statement

4.10 Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental and social performance

Not reported

Commitments to external initiatives

4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organisation

Not reported

4.12 Externally developed economic, environmental and social charters, principles or other initiatives to which the organisation subscribes or endorses

Partial SR – Climate change/Carbon footprint

4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organisations

Partial SR – Access to communications; Impact on the environment

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Global Reporting Index Table continued

54 Vodacom Group Sustainability Report 2010

GRI indicator Description of indicator

Extent of coverage for GRI Level C Reference/Section

Stakeholder engagement

4.14 List of stakeholder groups engaged by the organisation

Full SR – Stakeholder engagement

4.15 Basis for identification and selection of stakeholders with whom to engage

Partial SR – Stakeholder engagement

4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group

Partial SR – Stakeholder engagement

4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting

Partial SR – Material issues table; Stakeholder engagement

Core economic indicators

EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments

Full Annual Report

EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change

Partial SR – Climate change/Carbon footprint

EC3 Coverage of defined benefit plan obligations Full None

EC4 Government assistance Full No significant financial assistance received from government

EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation

Partial SR – Employment equity and diversity management

EC7 Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation

Not applicable

EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro-bono engagement

Partial SR Access to communications – Network coverage

Additional economic indicators

EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation

Full On average Vodacom remunerate at minimum of R96 000 pa compared to the market minimum of R45 000 pa.

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts

Not reported

Core economic indicators

EN1 Materials used by weight or volume Partial SR – Resource utilisation

EN2 Percentage of materials used that are recycled materials

Partial SR – E-waste; Resource utilisation

EN3 Direct energy consumption by primary source Full SR – Energy efficiency / alternate energy

EN4 Indirect energy consumption by primary source Not reported

EN8 Total water withdrawal by source Full SR – Resource utilisation

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Vodacom Group Sustainability Report 2010 55

GRI Index

GRI indicator Description of indicator

Extent of coverage for GRI Level C Reference/Section

EN11 Location and size of land owned, leased, managed in or adjacent to, protected areas and areas of high biodiversity value outside protected areas

Not applicable

EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

Not applicable

EN16 Total Direct and Indirect Greenhouse Gas (GHG) emissions by weight

Partial SR - Energy efficiency/Alternate energy

EN17 Other relevant indirect greenhouse gas emissions by weight

Not reported

EN19 Emissions of ozone-depleting substances by weight Not reported

EN20 NO, SO, and other significant air emissions by type and weight

Not reported

EN21 Total water discharge by quality and destination Not reported

EN22 Total weight of waste by type and disposal method Partial SR – E-waste; Resource utilisation

EN23 Total number and volume of significant spills Full None

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation

Partial SR – E-waste; Resource utilisation

EN27 Percentage of products sold and their packaging materials that are reclaimed by category

Not reported

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

Full None received: Legal compliance = 84.5% based on an operational sample size

Additional economic indicators

EN5 Energy saved due to conservation and efficiency improvements

Full SR - Energy efficiency/Alternate energy

EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives

Full SR - Energy efficiency/Alternate energy

EN7 Initiatives to reduce indirect energy consumption and reductions achieved

Not reported

EN9 Water sources significantly affected by withdrawal of water

Not reported

EN10 Percentage and total volume of water recycled and reused

Not reported

EN13 Habitats protected or restored Not reported

EN14 Strategies, current actions, and future plans for managing impacts on biodiversity

Not reported

EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk

Not reported

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved

Partial SR - Energy efficiency/Alternate energy

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Global Reporting Index Table continued

56 Vodacom Group Sustainability Report 2010

GRI indicator Description of indicator

Extent of coverage for GRI Level C Reference/Section

EN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally

Not reported

EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation’s discharges of water and runoff

Not reported

EN29 Significant environmental impacts of transporting products and other goods and materials used for the organisation’s operations, and transporting members of the workforce

Not reported

EN30 Total environmental protection expenditures and investments by type

Not reported

Core Labour Practices and Decent Work Indicators

LA1 Total workforce by employment type, employment contract, and region

Partial SR - Employees

LA2 Total number and rate of employee turnover by age group, gender, and region

Partial SR – Attracting and retaining talent

LA4 Percentage of employees covered by collective bargaining agreements

Full SR – Representation and engagement

LA5 Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements

Not reported

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work related fatalities by region

Full SR – Employee wellness (DIFR rate)

LA8 Education, training, counselling, prevention, and risk-control programmes in place to assist workforce members, their families, or community members regarding serious diseases

Full SR – Employee wellness

LA10 Average hours of training per year per employee by employee category

Full SR – Attracting and retaining talent

LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity

Not reported

LA14 Ratio of basic salary of men to women by employee category

Full From Level 1 to 5 the ratio of pay reflect that on average females are paid below their male counterparts by 10% but at level 6 females are paid slightly higher 3% more.

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Vodacom Group Sustainability Report 2010 57

GRI Index

GRI indicator Description of indicator

Extent of coverage for GRI Level C Reference/Section

Additional Labour Practices and Decent Work Indicators

LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations

Full 1. Compulsory pension fund membership;

2. Medical aid scheme; 3. Performance related incentives and

bonuses; 4. Leave benefits: maternity, paternity,

family, adoption; 5. Special mobile phone benefits; 6. Flexible work arrangement; 7. Subsidies for meals and transport

(night shifts); 8. Short term Incentive; 9. Retirement Funding;10. Cell phone;11. Medical aid; and12. Specific Leave benefit e.g. study leave

LA6 Percentage of total workforce represented informal joint management–worker health and safety committees that help monitor and advise on occupational health and safety programs

Not reported

LA9 Health and safety topics covered in formal agreements with trade unions

Not reported

LA11 Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

Partial SR – Attracting and retaining talent

LA12 Percentage of employees receiving regular performance and career development reviews

Full 100%

Core Human Rights Indicators

HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening

Not reported

HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken

Not reported

HR4 Total number of incidents of discrimination and actions taken

Not reported One. The perceived discrimination matter was addressed with both the relevant line manager and employee where after an action plan was developed to ensure that barriers experienced by the employee were removed

HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights

Not reported

HR6 Operations identified as having significant risk for incidents of child labour, and measures taken to contribute to the elimination of child labour

Not reported

HR7 Operations identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of forced or compulsory labour

Not reported

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Global Reporting Index Table continued

58 Vodacom Group Sustainability Report 2010

GRI indicator Description of indicator

Extent of coverage for GRI Level C Reference/Section

Additional Human Rights Indicators

HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

Not reported

HR8 Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights that are relevant to operations

Not reported

HR9 Total number of incidents of violations involving rights of indigenous people and actions taken

Not reported

Core Society Indicators

SO1 Nature, scope, and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities

Partial SR – Stakeholder engagement

SR – Placement of base stations

SO2 Percentage and total number of business units analysed for risks related to corruption

Partial SR – Ethics

SO3 Percentage of employees trained in organisation’s anti-corruption policies and procedures

Partial SR – Ethics

SO4 Actions taken in response to incidents of corruption Partial SR – Ethics

SO5 Public policy positions and participation in public policy development and lobbying

Full Vodacom has developed lobbying and engagement guidelines that seek to formalise and standardise the manner in which engagement with stakeholders is conducted. These refer to the Vodacom Group CMT Compliance Code, Stakeholder Relations Sponsorship Guidelines, Vodacom Group Code of Ethics and The Vodacom Way. Vodacom also has Public Policy Engagement guidelines.

SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

Not reported

Additional Society Indicators

SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country

Not applicable

SO7 Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes.

Partial SR – Competition and the cost of communications (The investigation into MTRs is ongoing. The complaint in respect of ‘margin squeeze’ has been enrolled for 26 April 2010.)

Core Product Responsibility Indicators

PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures

Not reported

PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements

Not reported

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Glossary

Vodacom Group Sustainability Report 2010 59

GRI indicator Description of indicator

Extent of coverage for GRI Level C Reference/Section

PR6 Programmes for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship

Partial SR – Ethics

PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

Not reported

Additional Product Responsibility Indicators

PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes

Not reported

PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes

Not reported

PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction

Partial SR – Stakeholder engagement

PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes

Not reported

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

Full 12 casesSR - Privacy

GRI G3 Application Level requirements

Vodacom is self-declaring a C level of application. The following table provides a summary of the GRI’s requirements for

different levels of compliance.

Report Application Level C C+ B B+ A A+

G3 Profile Disclosure ➾ Report On:1.12.1-2.103.1-3.8, 3.10-3.124.1-4.4, 4.14-4.15

Report on all criteria listed for Level C plus:1.23.9, 3.134.5-4.13, 4.16-4.17

Same as required for Level B

G3 Management Approach Disclosures

➾ Not required Management Approach Disclosures for each Indicator Caterogy

Management Approach Disclosures for each Indicator Caterogy

G3 Performance Indicators and Sector Supplement Performance Indicators

➾ Report on a minimum of 10 Performance Indicators, including at least one from each of: Economic, Social and Environment

Report on a minimum of 20 Performance Indicators, at least one from each of Economic, Environmental, Human Rights, Labour, Society and Product Responsibility

Report on each core G3 and Sector Supplement Indicator with due regard to the Materiality Principle by either: a) reporting on the indicator or b) explaining the reason for its omission

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60 Vodacom Group Sustainability Report 2010

Glossary

3G Third Generation Mobile Communications Technology

AIDS Acquired Immune Deficiency Syndrome

ARPU Average Revenue Per User

ARV Anti-Retro Viral

BEE Black Economic Empowerment

BBBEE Broad-based Black Economic Empowerment

CMT Corruption, Money Laundering and Terrorism

CoGP Department of Trade and Industry’s Codes of Good Practice

CPB Consumer Protection Bill

CSI Corporate Social Investment

CSTO Community Services Telephone Operator

CUASA Communication Users Association of South Africa

DAI Direct Aids Intervention

DIFR Disabling Injury Frequency Rate

DRC Democratic Republic of Congo

dti Department of Trade and Industry

EAP Employee Assistance Programme

EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation

ECA Electrical Contractors’ Association

ECS Electronic Communication Services

ECNS Electronic Communication Network Service

EDGE Enhanced Data Rates for Global Evolution

EE Employment Equity

EIA Environmental Impact Assessment

EMF Electromagnetic Fields

ERM Enterprise Risk Management

FASA Franchise Association of South Africa

FPB Film and Publications Board

GBCSA Green Building Council of South Africa

GPFT Graduate Programme for Females in Technology

GPRS General Packet Radio Service

GPS Global Positioning System

GRI Global Reporting Initiative

GSM Global System for Mobile Communications

HDI Historically Disadvantaged Individuals

HIV Human Immunodeficiency Virus

HR Human Resources

HSDPA High Speed Downlink Packet Access

HSUPA High Speed Uplink Packet Access

IARC International Agency for Research on Cancer

ICAS Independent Counselling and Advisory Service

ICASA Independent Communications Authority of South Africa

ICT Information, Communication and Technology

ICT Charter Empowerment Charter for the ICT Industry

ICNIRP International Commission on Non-ionising Radiation Protection

IOD Institute of Directors

ISETT SETA Information Systems, Electronics and Telecommunications Technologies Sector Training and Education Authority

ISO International Organisation for Standardisation

IVR Interactive Voice Response

JSE Johannesburg Stock Exchange

LBS Location-based Services

MMS Multimedia Messaging Service

MNO Mobile Network Operator

MNP Mobile Number Portability

MPLS Multiprotocol Label Switching

OHSAS Occupational Health and Safety Assessment Series

OpCos Operating Companies

PDI Previously Disadvantaged Individuals

PUSANO Provincial Underserviced Area Network Operator

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Glossary

QSE Qualifying and Exempt Micro-Enterprise

REMCO Remuneration Committee

RF Radio FrequencyRICA Regulation of Interception of Communications

Act

SAR Specific Absorption Rate

SARPSA South African Reserve Police Service Association

SHEQ Safety, Health, Environment and Quality

SIMCards Subscriber Identification Module Cards

SMS Short Messaging Service

SVS Short Voice Service

TSI Technology Strategy Initiative

USA Universal Services Agency

USAL Under-serviced Area Licence

USSD Unstructured Supplementary Services Data

VAEP Vodacom Advanced Executive Programme

VANS Value Added Network Services

VIP Vodacom Incentive Programme

VLC Virtual Learning Centre

VCT Voluntary Counselling and Testing

VoIP Voice over Internet Protocol

VPN Virtual Private Network

VSAT Very Small Aperture Terminal

VSP Vodacom Service Provider Company

WASP Wireless Application Service Provider

WASPA Wireless Application Service Providers Association

WiMAX Worldwide Interoperability for Microwave Access

WHO World Health Organisation

YAP Young Achievers Programme

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