welcome to the new world - mtn group

Welcome to the New World

MTN Group Limited Sustainability Report for the year ended 31 December 2012

Our strategy: The role that telecommunications plays in people’s lives has changed rapidly in the last decade. Not so long ago, traditional voice services defined the telecommunications industry. Now they are just one of a growing range of services that impact many areas of our lives. The need for a broader digital offering has led MTN to refresh its vision and mission and refine its strategic objectives. This is to ensure that we maintain our leadership position in communications in emerging markets and sustain a business model that maximises value for all our stakeholders.

Our vision: To lead the delivery of a bold, new Digital World to our customers.

Our mission: To make our customers’ lives a whole lot brighter.

Highlights

6 billioncellphone subscriptions with 3,2 billion users globally

�10% in ARPU rates in Africa

�1,4 (US$1 trillion)of global GDP provided by mobile operators revenues (3,1% in Africa 1,4% of world’s GDP)

�25% increase incloud computing spend globally since 2008

�60 secondsto transfer 640GB of data, generate 6 million Facebook views, view 1,3 million YouTube video clips, share 100 000 tweets, send 204 million emails, download 47 000 apps – and steal online identities of 20 people globally

�200%MTN data traffic year-on-yearSources: GSMA – The Mobile Economy 2013; ITU Telecom World 2011, wired.com; Intel and the Internet in 60 seconds.

About the MTN GroupLaunched in 1994, the MTN Group is a leading emerging market telecommunications operator, connecting subscribers in 22 countries in Africa and the Middle East. The MTN Group is listed on the JSE Securities Exchange in South Africa under the share code: “MTN”. As of 31 December 2012, MTN recorded almost 190 million subscribers across its operations in Afghanistan, Benin, Botswana, Cameroon, Cote d’Ivoire, Cyprus, Ghana, Guinea Bissau, Guinea Republic, Iran, Liberia, Nigeria, Republic of Congo (Congo Brazzaville), Rwanda, South Africa, Sudan, South Sudan, Swaziland, Syria, Uganda, Yemen and Zambia. Visit us at www.mtn.com

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MTN Group Limited Sustainability Report for the year ended 31 December 2012 Page 1

01 Group president and CEO’s statement

02 Sustainable business commitments

10 2012 Sustainable business commitments

11 2013 Key performance indicators

03 Sustainable economic value

14 Helping close the digital divide

16 Enterprise solutions

17 Machine to machine (M2M) solutions

04 Eco-responsibility

20 MTN’s energy, carbon and climate management

21 Network management

21 Electronic and electrical waste management (e-waste)

05 Sustainable societies

25 Employee health and safety

25 Electromagnetic fields (EMF)

26 Human rights: freedom of expression and privacy

06 Annual sustainability statements

31 Sustainability value add report

33 UN GRI Report

07 About this report

50 Scope, boundaries and integration

51 Determining material issues

51 Where to find more information

52 Assurance statement

08 Glossary

Cont

ents

MTN Nigeria

MTN Nigeria, Nokia and the Cherie Blair Foundation have partnered to launch the

Nigerian Women Entrepreneurs and Mobile Value Added Services training programme.

This programme is implemented in the Niger Delta by the Cherie Blair Foundation

partner, Youth for Technology Foundation (YTF). Training sessions for women

entrepreneurs have been held already in Abia and Imo States and over 500 women

have participated to date. Beneficiaries undergo classroom and online training

complemented with tailored SMS messages, via the Business Women application on

Nokia phones, to help them overcome key challenges they face in running their

businesses.

Page 2 MTN Group Limited Sustainability Report for the year ended 31 December 2012

01Group president and CEO’s statement


pricing resulted to some degree of loss of market share and economic, environmental and socio-political challenges. The knock-on effect of sanctions against Iran continues to be felt in our business. We also witnessed the shrinking of voice and a surge on the data consumption which presented another challenge as far as the demand for broadband and related infrastructure in some of our markets.

Despite this, we were able to deliver growth in some of our key markets such as Nigeria and South Africa, and we saw growth in data consumption with the arrival of affordable smartphones in most of our markets.

I am pleased that we have made substantial progress in transforming our operating model to reflect the new realities. We looked at introducing and implementing projects and standardisation processes that will lead to operational efficiencies focused on optimising our assets in the same vein. We are deploying an integrated service delivery platform to improve innovation time to market for value added services. We are also taking a closer look at our supply chain management and how our business and operating culture can carry us into the future. As MTN, we are particularly focused on how we effectively govern our business more sustainably and ethically in light of the many global issues, challenges and demands on ICT operators over the last few years.

Group president and CEO’s statement

Q What was your highlight in 2012?

A 2012 was great for MTN in a sense that we were able to redefine MTN’s vision and mission, and honed our strategy which led to the changes in our business model. Our new vision – to lead the delivery of a bold, new digital world to our customers – marks an evolution from the vision to be the leader in telecommunications in emerging markets. With clear market leadership in 15 of the 22 countries in which we operate, the leading telecoms brand in Africa and a top brand in the Middle East, we have largely delivered on this earlier vision. We do, however, remain focused on developing economies.

Our new mission – to make our customers’ lives a whole lot brighter – means easier engagements with MTN such that all our customers are MTN promoters. It is a differentiated MTN-branded customer experience that we give at every touch point.

Q Tell us a little about business conditions and MTN’s responses in 2012?

A Economic conditions have been and continue to become tougher for all ICT operators, even in traditional emerging and growth markets where demand for services and access to services has historically been lagging. Increased competition with new operators coming into our markets and aggressive

In 2012, the MTN Group set our future course, by defining our new vision and strategy. Group president and CEO, Sifiso Dabengwa, tells us more about the operating context, challenges, and successes and where MTN needs to improve its practices to conduct a sustainable business.


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ICT operators, and even equipment manufacturers globally, MTN is not immune to these issues, more so given where we operate.

We are proud to serve over 22 countries across Africa and the Middle East, and our over 189 million subscribers attest to the fact that we are playing a fundamental role in ensuring telecommunications inclusivity. However, these are not single, standard markets where uniform geographic, political, judicial, regulatory, socio-economic and cultural contexts allow “develop one, fit to all” solutions to macro operating issues. This complexity is further compounded by the innovation revolution taking place in the information and communication technology sector, where innovative solutions that break down social, economic and community barriers are catalysts for positive socio-economic development.

Our business is to facilitate communications in the digital age. We remain apolitical, neutral and focused on working with our stakeholders to support the UN declaration of human rights regarding freedom of expression, and privacy and security. This though, is often easier said than done. Like all operators, we are restricted by the terms of licences granted by regulatory authorities and local laws. It is important that we also ensure the safety of our employees and customers in all we do, and operators globally are grappling with the challenge of how best to balance rights and laws in operations to the satisfaction of all stakeholders. However, we are dedicated, from the board level downwards, to fundamentally address these difficult issues, working with internal cross-functional content experts and external stakeholders.

We are in the business of providing communication services digitally. Any activity by any party that challenges this position is a challenge to our very existence, and therefore we are working hard and will act to our utmost capacity and scope of influence to continue to achieve our vision of leading the delivery of a new digital world to our markets in a way that is responsible, ethical and sustainable.

In the same year, allegations of inappropriate behaviour levelled against MTN by Turkcell regarding the operating licence issued to Irancell back in 2004/2005. We are pleased to note that after a year-long investigation by the Board-appointment commission, headed up by independent former jurist Lord Leonard Hoffman, no substance to these allegations were found.

On the networks side, some of our operations experienced quality of service issues and this resulted in some regulators threatening to shut down our network or issue fines. Whatever the reason for poorer than anticipated quality of service – from the need for supporting regulatory and infrastructure solutions from authorities, and in some cases, addressing theft and vandalisation of network sites and cable, or damage by other parties in their line of work to greater capital investment by MTN – we know that a growing, stable network is fundamental to achieving our vision and ensuring that we can make our customers’ lives brighter. As a result we invested more than R30 billion into network capacity, and continue our 4G/LTE investments.

Q MTN’s reputation has been affected lately as a result of allegations that the Company’s network may be used for inappropriate reasons such as possible breaches of privacy and challenges to human rights and freedom regarding communications in some of our markets. How can you sum up a response around these issues?

A A few years ago, the term Arab Spring was not part of anyone’s vocabulary, and issues of snooping, cybersecurity and hacking were largely confined to security agencies, IT departments and sometimes even bored teenagers around the world. Much has changed as we all know: cyber theft of identities, organised crime and cyber-intelligence, a global clampdown on freedom of speech and digital communications by governments from the USA and Europe to the Middle East, Asia and other parts of the world has, sadly, become the norm. Like most other

Group president and CEO’s statement continued


Q We know from global authorities that climate change effects will have or is already having a notable impact across Europe and North America. MTN operates in Africa especially, where many countries have the least economic and other resources to cope with these climate effects. What role is MTN playing in mitigating the foreseeable impacts?

A Climate change impact on our business has been identified and we have been working these past three-odd years to understand the financial, regulatory and physical risks – and opportunities – that we could face as a result. Although, as an ICT operator, we have a relatively smaller impact on climate change and environmental resources such as biodiversity, the health of the oceans or water use, the greatest area where we can try and be more responsible is in our use of energy.

We have stressed the importance of process optimisation which has positive spin-offs in the reduction of energy consumption, operating costs and carbon and equivalent emissions. Access to energy is still a challenge to most people in emerging markets where we operate; it makes more sense to be energy efficient so that we take special care of our own usage of a resource that most local communities don’t even have access to. Not only are we working to understand our environmental impact, and mitigate this to the best of our abilities, we are also rolling out solutions such as affordable handset recharging via solar-powered handsets in some of our markets, alongside offering Africa’s lowest-cost digital handset, to reduce the cost of communications to our customers in a socially and environmentally responsible manner. By working on both managing and reducing our energy use, we traded over 15 284 worth of forward-traded carbon credits for our network switching sites this year, and achieved Silver LEED Certification from the US Green Building Council for MTN South Africa and Group head office

campus. We have made progress in formally determining our baseline to reduce energy costs and emissions, and our operations are aware of the cost and implications of traditional energy use. In fact, they are working hard at trial and live engineering and alternative energy solutions to do their bit towards more effective, efficient and environmentally responsible use of this fundamental resource.

Q What has been MTN’s greatest achievement on the sustainability front?

A I think we are making some progress on embedding responsible environmental and social business requirements into the business; there is a positive response and understanding from MTN employees of what is expected out of them to fully integrate it in their daily lives at work. However, I know we can and must do more on quick win areas such as energy efficiency, e-waste management and using our products and services to help reduce the digital divide. On the back of all issues and allegations published on various media platforms, we saw it fit to grow our focus on Social and Ethical governance functions and the expected conduct of every employee. We partnered with Ethics Institute of South Africa to help us provide much needed training to all our employees, starting at the highest levels of the organisation. Lastly, I think the fact that we continue to maintain our listing on the JSE Social Responsibility Index attests to our efforts. However, we are acutely aware of the need to improve our performance annually, and prove this to our stakeholders, so we remain focused on ensuring sustainability and core business work hand in hand.


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Our employees are passionate about giving back to their communities: this excitement shows in how our OPCOs compete with each other to implement the most successful community initiatives each year. CSI is simply a way of life for MTN employees.

Q In the next few years; how are you going to position MTN to sustain growth in your markets?

A I think a key approach would be our focus on customer needs at all levels. A strong differentiator will be the delivery of customised products and services meeting the customer’s needs. Recent performance in our markets has shown that data consumption is on the rise and this is the space we want to be playing in as a business to provide well-structured data packages to drive up consumption. In this way, we will enable more people to have internet access and further enhance access to the digital world.

Q In most of its operations, MTN is known for the work done in communities. Why is this a key focus for MTN when the business is in a state of transition?

A We are aware that many of our customers come from under-resourced and under-developed communities. Access to education, healthcare and support for national imperatives to develop societies cannot be the sole responsibility of government given that the range of issues and solutions is complex, challenging, and requires coordinated responses from a spectrum of stakeholders. We draw our business from these communities, and they are supporters of our efforts to grow our business. To this end, it is only appropriate that we support long-term programmes that in some meaningful way can help them grow economically and sustainably across multiple generations. I’m particularly pleased that in 2012, we increased our investment in communities through MTN Foundations by 34%, in spite of the tough economic conditions many of our operations faced.

This was also supported by our successful employee volunteering programme, 21 Days of Y’ello Care, which each year, sees more than 50% of our colleagues support a United Nations-based theme or Millennium Development Goal initiative by volunteering within their communities. Last year, we focused on the importance of education. As a business, we also participated for the first time in the celebration of Mandela Day, which is an event celebrated globally. Some of the Y’ello Core projects were extended to commemorate the 67 minutes of Mandela Day – this is something we are very proud of.

For more statements from the Group chairman, and Group president and CEO, see the MTN Group Integrated Report for 2012, on our website at

www.mtn.com/investors


Facilitating access to online education in Uganda

Many of the emerging markets in which MTN operates struggle to access relevant

quality education. In particular, access to digital content and online educational material

is uncommon.

MTN Uganda has facilitated the rollout of the Microsoft pathfinder school e-learning

platform across the country, adding content on the platform and donating connectivity

solutions. We have partnered with Gayaza High School (a Microsoft pathfinder school) to

drive awareness of the e-learning platform as a means of creating access to quality and up-

to-date education material for both teachers and students in secondary schools, particularly

in rural areas.

At the end of 2012, we supported 26 schools. In early 2013, we will extend access to another

24 schools.


022012 sustainable business commitments


We set the following 2011 – 2012 commitments in terms of sustainable business performance last year. The table below indicates how we have performed. Commitments marked “not achieved” or “behind schedule” are elaborated upon in the relevant sections.

Achieved In progress Behind schedule Not achieved Discontinued

Focus area Commitment Progress

Governance Provide training to Botswana and Afghanistan in anti-corruption practices

Sustainable economyRoll out procurement transformation programme “Sourcing Together to Achieve Results” (STAR) 2012

Help close digital divide by implementing solar/hybrid-powered telephony infrastructure in up to 850 rural villages in Nigeria

Improve procurement efficiencies to achieve sustainable savings

Extend access to MTN Mobile Money and mobile remittances

Launch audio conferencing service to offer virtual meetings and conference solution

Introduce the ultra-low-cost handset (ULCH GPRS) in all our markets at US$18

Explore the feasibility of low-cost solar handset in the low-end segment in Zambia, Sudan, Benin, Cote d’Ivoire, Cameroon and Uganda

Eco-responsibility Start climate management strategy development Q3, 2011

Set relative baseline for GHG emissions Q4, 2011

Continue investment in alternative and energy-efficient network sites

Commence year one of three-year MTN SA e-waste pilot project Q2, 2011

Identify criteria to select downstream e-waste recyclers Q3 – Q4 of 2011, represented in two provinces in South Africa as part of e-waste pilot

Apply for LEED certification for MTN South Africa 14th Avenue premises by May 2012

Complete detailed energy reviews in detail for MTN SA and MTN Nigeria

Appoint downstream recyclers (SME and large) to recycle e-waste at pilot sites

Sustainable societiesImplement new corporate social investment (MTN Foundations) strategy by Q4 2012

Conclude socio-economic impact study by Q4, 2011 1

1 The project was discontinued due to its significant associated cost across our 22 operations. We are now assessing how our business intelligence reporting solution – MTN Market Performance Report (MPR) – can incorporate some of the required measures to assess our impact in each market where the MPR is run.

2012 sustainable business commitments


2013 key performance indicators

Strategic objective 2013 KPIs

Creating and managing stakeholder value

Upstreaming of cash

Share buy-back strategy management

Optimising gearing levels

Business risk and operational compliance

Employee Health Index (EHI)

Labour productivity composite index

Global leadership and talent management

Creating a distinct customer experience

Customer centricity strategy management

Global service delivery platforms

Brand health and equity index

Customer satisfaction and retention index

Network quality and drop rate

Driving sustainable growth

Revenue

– Increase data revenue contribution

– Mobile Money strategy management

– Device strategy management

– Global ICT strategy management

M&A strategy management on targeted assets

Earnings diversification and optimisation

Group equity transactions

Transforming our operating model

Cost management, Project Next!

Capital expenditure management

Monetisation of passive infrastructure

Global shared services strategy and execution (HR, finance, procurement and IT)

Innovation and best practice

Implementation of culture operating system

Spectrum allocation policy

Migration to all IP networks

Our key performance indicators (KPIs) are aligned to the five objectives of our recently refined strategy and are used to measure our performance against this strategy. 01


ReadySet solar charging solution MTN and Grameen Foundation partnership in Uganda

MTN operates in emerging markets in Africa and the Middle East; this comes with challenges

such as access to reliable and affordable electricity. As a result, our customers could not fully

enjoy the benefits of our products and services.

The ReadySet can power a countless number of devices, it was designed for mobile telecoms to

sell to their subscribers and improve revenues while increasing access to telecommunications.

Entrepreneurs operating small businesses are able to charge cellphones and power lights at

night so that they can keep their stores open longer and generate new meaningful income.

MTN Uganda has sold about 1 400 ReadySet units through the service centres and the dealer

network with a forecast of selling about 3 000 units in 2013. In Uganda, field studies with MTN

and Grameen Foundation found that ReadySet entrepreneurs:

• Earn US$40 per month from charging an average of six to eight phones per day.

• Save US$5-US$10 per month on kerosene and paraffin expenses for lighting (dirty and

dangerous sources of light).

• Increasing Mobile Money transactions and increasing agent commission by US$30 per month.


03Sustainable economic value


Sustainable economic value

From MTN Mobile Money and transfers to affordable enterprise development solutions and cloud computing services, our efforts in the advancement of people’s lives in our operations is clear in the products and services we provide.

We are able to help bridge the digital divide and enable communications, socio-economic inclusivity and even to a relatively small extent, address macro social and environmental issues across our markets, while creating new revenue streams for our business. This is how we create sustainable economic value for both our business, and stakeholders.

Underlying the growth of our vision is our US$210 million investment in high-capacity broadband connectivity, which helps us provide digital services to increase access to communications, at improved speeds and quality, help businesses reduce costs and provide converged IT services and mobile internet. MTN’s Y’ello Fibre Ring deployment tracker shows our main submarine cable investments and countries where LTE networks are being implemented.

3.1 Helping close the digital divideWe offer an array of solutions that are effectively using telecommunications and information data services to help our communities enjoy the socio-economic benefits of the global digital innovation revolution.

The following are some of the products we offer that help close the digital divide. (Note: not all products are available in every country in which we operate.)

� MTN Mobile Money � MTN Zone � Low-cost handsets � M-Health � M-Insurance � M-Agriculture � Google SMS for farmers, traders and health services � Opera Mini browser � Refugees United

� Village Phone � MTN – UN Food Aid transfers partnership � Solar handset recharging � M-Fisherman services

Fast data facts• 1 000: the number of fisherman helping MTN and

Ericssons test a mobile weather service information system (including weather forecasts, warnings and alerts in local languages) for fishing villages on Lake Victoria, Uganda

• 160 000: the number of refugees and displaced people that are using the Refugees United online family tracing platform to search for missing family members, offered in partnership by MTN, Clinton Global Initiative and Refugees United (a UN Refugee Agency (UNHCR)). For more information, go to www.refunite.org/

In this report, we focus on the role of MTN Mobile Money in particular, as one of the cornerstones of our strategy to drive sustainable growth through targeted revenue streams. Financial inclusion, especially across our markets, remains a global concern with 48% of the world’s adult population having no access to financial services (GSMA 2013). We are dedicated to working with partners, regulators and governments to ensure that the right services are launched to empower the citizens. MTN Mobile Money is now available in 14 countries, and is a key component of our revenue generation strategy. The demand and relevance of Mobile Money across the African continent can be seen in the steady growth of customers, up from 6 million in 2011 to 9,4 million in 2012. There has been a 50% increase in completed customer transactions as at December 2012, and our agent distribution network has grown to over 25 000.


MTN’s Y’ello Fibre Ring: deployment tracker

EASSy

● Total system cost: US$260 million

● MTN’s investment: US$40.3 million

● System capacity: 1.4 Terrabits per second

(Tbps) with upgrade ability to 4 Tbps

● MTN is the largest investor

● Live since July 2010

EIG


● MTN’s investment: US$50.36 million

● System capacity: 2.88 Tbps

● Live since March 2011

SAT-3/SAFE

● MTN holds indirect ownership

TEAMs

● MTN holds indirect ownership

● System capacity: 1.2 Tbps

● Live since October 2009

LTE LANDING STATION

● South Africa: LTE launched December 2012

● Uganda: LTE launch planned April 2013

● Benin: LTE limited launch planned 2014

WACS


● MTN is the largest investor (US$90 million) and

operates four landing stations

● Next generation fibre technology system with

capacity of 5.15 Tbps

● 14 000km: London to South Africa

● 11 landing stations along African Atlantic coast

● Live from May 2012

MTN OWNED AND OPERATED LANDING STATION

INTERCONNECT POINT AT WHICH MTN SWITCHES

OR RE-ROUTES TRAFFIC BETWEEN CABLE SYSTEMS

LTE ACTUAL/PLANNED LAUNCH

EASSy: EAST AFRICAN MAIN SYSTEM

WACS: WEST AFRICA CABLE SYSTEM

EIG: EUROPE INDIA GATEWAY

SAT-3/SAFE: SOUTH ATLANTIC 3 SOUTH AFRICA

TEAMs: THE EAST AFRICA SUBMARINE SYSTEM

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Sustainable economic value continued

In Uganda, we partnered with Western Union (WU) to launch the Mobile Money transfer service to enable MTN customers to send and receive money seamlessly over their mobile phones. International Remittance transactions are steadily on the increase. MTN Zambia partnered with ABC Bank to extend its distribution footprint to allow for cash deposits and withdrawals, ensuring the Mobile Money ecosystem benefits the larger community. MTN South Africa launched the first “mobile only” bank in the country, in partnership with the South African Bank of Athens, Pick n Pay and Boxer Stores, allowing customers to make payments from their mobile phones, transfer funds to other users, buy prepaid electricity vouchers, purchase airtime, pay for groceries and even withdraw cash at stores. This service is available to non-MTN customers as well, thereby supporting efforts to ensure financial inclusivity. In Nigeria, where the regulation stipulates that the service can only be bank-led, with mobile network operator support, we offer our banking partners the widest Mobile Money agent distribution nationally. Notwithstanding the prevalent competitive environment, with more than a dozen MTN Mobile Money offerings in Nigeria, we have managed to steadily grow our subscriber base.

MTN remains committed to being the leading mobile financial services provider in the continent, and will continue its efforts to expand this service to other opcos. We remain dedicated to continue working with the governments and regulators in all applicable countries to ensure that the right services are launched to empower the citizens.

3.2 Enterprise solutionsIn line with our new vision, we established the MTN Group Enterprise Business Unit, which will contribute revenue from our ICT solutions offering to businesses. With operational costs – including energy, human resource and maintenance costs – constantly on the rise, we have launched the MTN cloud bouquet of services, a set of cloud computing services including desktop and collaboration software, back-up services, on-demand video conferencing, antivirus and antispam security, office collaboration tools, and human resource, financial and sales force automation solutions. MTN is the first mobile network operator in Africa to adopt this cloud service brokerage model, with a pilot offering in Cameroon, Cote d’Ivoire, Ghana, Nigeria, Uganda and South Africa. The brokerage model allows MTN to act as a central point of contact for third party services, enabling customers to access these services at lower hardware, software and licence prices, reduced administrative burden, and increased productivity and efficiency. With the focus on top multi-national corporations, the results have been positively received by the pilot partners to date. Trials were successfully completed in January 2013 and confirmed demand for these services in the small and medium enterprise segment (SME) especially. Trial partners were drawn from the information technology, manufacturing and hospitality sectors.

The MTN Cloud was launched in live production in Ghana and Nigeria in April 2013, and other markets will follow later in the year, with customers able to use a 30-day trial if they wish. Customers may pay for their cloud computing selections using their existing airtime or MTN Mobile Money, in local currency. This will increase the accessibility of services, especially for our SME customers.

• Broadband is a powerful potential accelerator towards the Millennium Development Goals (MDGs) – International Telecommunications Union, 2010

• Every 10% broadband penetration in low- and middle-income countries accelerates economic growth by 1,38% – World Bank, 2009

Fast data facts


Sustainable economic value continued

3.3 M2M solutions for the environmentMachine 2 Machine (M2M) technology uses on-property sensors to detect any event which might have an impact on business operations. Whether the issue is air quality at mining operations, temperature changes on farms or public tampering with power lines at energy plants, M2M technologies let our customers know of events that impact their operations and the environment immediately and accurately through a combination of wireless, wired or hybrid GSM communications. This helps to reduce response times, damage or loss to assets, related productivity and revenue losses, pre-empting evacuations and equipment failure, preventing downtime, and helps maintain or reduce costs and environmental impact of businesses.

MTN’s fleet monitoring and mobility solution has been helping freight and transport companies reduce the direct and possible theft costs of diesel and petrol through smart monitoring, and enables scope 1 and scope 3 greenhouse gas emissions. Our smart electricity metering solution eliminates human errors, improves data quality and security, and helps monitor tampering of energy generation or use operations. MTN’s Air Quality Reader, which is fully compliant with local air quality legislation, captures ambient air quality readings 24 hours a day, within a 50km radius. Air is monitored for the levels of sulphur dioxide, nitrogen dioxide, carbon monoxide, o-zone, particulate matter of certain aerodynamic diameters, benzene and lead. This enables our customers to make important air quality decisions quickly, helping to keep areas clean of harmful pollutants. MTN water monitoring is a solution that monitors business’ water usage. Using a water meter’s standard pulse outputs, real-time reporting on flow rates helps users develop patterns of consumption. Any variations (eg leakages causing increased water use, or dam water levels exceeding pre-set limits) trigger alarms with escalation via SMS and email, helping address problems, and reducing water wastage. We also offer telemetry-based security and surveillance solutions to our customers.

The MTN Cloud: supporting Nigeria’s cashless society policy

In 2012, the Central Bank of Nigeria introduced a cashless policy in Lagos, and is looking to roll this out to other states across the country. The aim of the cashless policy is to embrace the use of electronic payment systems and help modernise the country’s payment system, reducing the heavy cash-orientated nature of transactions and services, and the costs and risks to the banking sector and consumers as a whole, and drive financial inclusion. We have partnered with Nigeria Inter-Bank Settlement System (NIBSS) to help the country realise its cashless policy. Our solution involves providing 80 000 SIM cards to NIBSS and supporting NIBSS’ rollout out effective point of sale (POS) services at markets and shopping malls in Lagos. The POS solution is available both via wired connectivity and cloud-based access, enabling high and consistent operating speed, reliability, ease of use, remote supportability, low cost, and rich functionality. We have also introduced MTN XaaS Micro-banking software, in partnership with Computer Warehouse Group. This is a service platform which enables micro-finance banks (MFBs) to carry out banking operations without having to pay as much in licensing, storage and implementation costs required for typical banking applications. The only investment micro-finance banks require is to invest in laptops or desktops, enabling them to access a banking platform hosted in MTN’s data centre, from anywhere via a secure private or public connection. This helps MFBs remain cost-effective in delivering services to the unbanked community, and can save MFBs up to 70% of the traditional costs involved in procuring, hosting and implementing typical banking software.

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MTN Nigeria solar powerIt is estimated that only up to 30% of Nigeria’s national power requirements may be supplied by the national grid. The country is therefore highly dependent on diesel for its energy requirements. For MTN Nigeria, this means that the cost of maintaining base transceiver station (BTS) sites (and other network, technology and office facilities) has been surging annually with over 8 000 BTS sites.

MTN Nigeria decided to conduct solar energy trials on seven BTS sites so as to address the high diesel consumption of the current power methodology. The solution reduces the quantity of diesel by reducing the dependency on diesel generator set (genset), and also helps increase genset life cycles and reduces the amount of carbon emissions associated with diesel use.

• On current diesel-operated sites, savings of up to 80% of the current BTS operating costs (which includes the cost of diesel and genset maintenance) were targeted. This has been achieved. (Actual savings depending on vendor solution and configuration range between 49% and 88%.)

• On existing hybrid battery-and-diesel powered sites, a 20% savings target was set; this has been achieved.

• Average OPEX spend per site where gensets run 24/7/365 are now US$26 988,03.• Using solar power on MTN Nigeria’s sites means that gensets run on average less than

80% of the time, realising a further US$5 396,6 savings per annum, and increases the useful lifespan of the genset.

Page 18 MTN Group Limited Integrated Report for the year ended 31 December 2012


04Eco-responsibility


Although the number of reporting operations increased, material under-reporting by some of the largest MTN operations, and non-reporting by others, have led us to determine that our FY12 reported carbon emissions from energy use across all three scopes is under-reported by as much as 38% for scopes 1 and 2 alone. This year, some of the operations that submitted CDP reports only did so for scopes 1 and 2; the exclusion of scope 3 travel emissions and the impact on under-reporting has not been calculated.

As a result, we have not met our objective of setting the energy costs and greenhouse gas emissions of our 2012 business operations as the baseline by which to measure reduction efforts. Although we are actively using a number of solutions to reduce our use of energy and our greenhouse gas impact, we are unable to measure the results and direct financial and greenhouse gas reduction benefits. We are actively working to rectify this situation in 2013.

We know that the largest areas of our energy consumption and therefore greenhouse gas reductions remain our network and base station sites, switches and data centres. We therefore continue to focus our efforts to reduce energy consumption and improve efficiencies here (in addition to technology and facility services which are also material energy consumers). We are also working to improve internal understanding of the financial, physical and regulatory risks and opportunities posed to our business as a result of our use of energy.

The top climate-related risks to our business are being detailed as part of risk mitigation planning by our operations. These include increasing costs, increased flooding and higher temperatures in some countries, resulting in more costly and difficult maintenance cycles and fuel management, and increasing regulatory motions or activity in a number of countries, with respect to overall climate change.

Eco-responsibility

The three most material areas of impact where our efforts can have a less harmful impact on the environment are managing and reducing our greenhouse gas emissions, ensuring our network implementation is environmentally sound, and responding to the global proliferation of electronic and electrical waste.

We also know that we can use ICT solutions to help other companies reduce their environmental impact. Some of these solutions are also explained on the following pages.

4.1 MTN’s energy, carbon and climate managementIn 2012, 52% of our operations submitted Carbon Disclosure Project reports (up 21% from 2011). This represents 86% of our business by revenue. Our carbon footprint for 2012 was 1 040 722 tonnes, up 8,7% from 2011. We have also accounted for fuel costs and impact incurred by MTN Ghana, whose network has been outsourced (scope 3). The largest areas of energy consumption and therefore greenhouse gas emissions are our network and base station sites, and data centres.

Carbon footprint by scope (tonnes CO2e)

Scope 1 (direct)

Scope 3 (indirect)

Scope 2 (indirect)

281 201

280 246

378 869

743 646

384 725

652 790

4 414 4 739 3 208

2012201120102009

407 492

536 541

6 531

Our customers live in emerging countries that are resource-rich, but globally are most vulnerable to the effects of climate change. For this reason, we take our responsibility to address our environmental impact seriously.


managers to ensure contractors (especially new contractors) are trained on project specifics relating to environmental requirements during site preconstruction and construction phases. Our submarine and terrestrial optic-fibre broadband implementations are subject to independent environmental and local community impact assessments. In the case of broadband cabling, all infrastructure development is signed off by local government and regulatory stakeholders, and our operating licences are subject to environmental impact assessment requirements.

4.3 Electronic and electrical waste management In 2010 we commenced engagement with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, to partner on a three-year MTN South Africa e-waste pilot project which formally commenced in mid-2011.

We aim to increase public awareness about the problems caused by e-waste, potential solutions, and assure ourselves and relevant stakeholders that e-waste is being handled appropriately locally in line with acceptable standards and protocols.

In 2011 we reported delays in delivery against our commitments and implementation plans. Further delays continued to be experienced in 2012. The main reasons include the following:

� Although an important project for our operations, delayed allocation of sufficient human and financial resources to implement the solution we jointly defined with our partners impacted rollout in terms of our original timeframes. To some extent, this has been now addressed, but we will maintain oversight over this risk;

� The country-wide situational analysis undertaken provided insufficient information for us to make decisions on SME recycler selection criteria, and we undertook further assessments on their readiness to process higher volumes of e-waste, and their needs for capacity development, resulting in further delays. We have now completed this task; and

� We changed our plans to collect e-waste from school sites. We now plan to focus on collection via MTN stores as part of a broader integration focus. This change in strategy led to delays in implementation but now ensures that possible duplication and resource alloc ation risks across the business are more effectively mitigated.

In our next report, we aim to present the quantitative impact of our performance, including the results of the public awareness campaign, the value and tonnage of collections and recycled items, in addition to our current financial project commitments.

We continue to investigate and implement mechanical, electrical and architectural solutions to our largest impact areas (network sites, switches and data centres), to improve energy efficiency, manage costs, and reduce overall greenhouse gas impact. These range from free cooling, improved efficiency of radio and data centre equipment, network upgrades, increased use of deep cycle batteries, and implementing hybrid diesel generator and battery solutions to reduce the use of diesel. Infrastructure consolidation, virtualisation and upgrades also ensure a greater degree of energy efficiency.

We continue to increase our use of solar power for our network sites. Wind power and, to a lesser degree, hydropower also remain sources of direct and indirect energy for our sites. More details on our latest activities can be located in the MTN Group 2012 Carbon Disclosure Report to be published on our website towards the end of May 2013.

Fast data facts• US$21 592,00 p.a.: The maximum amount every solar-

powered site in MTN Nigeria saves on operational costs, or 80% of diesel consumption (and maintenance costs)

• R12 million in carbon credits between 2013 and 2017 realised by MTN South Africa by trading 15 000 tonnes of avoided emissions

• 7: The number of MTN Iran’s main switch sites powered by natural gas

• 12: The number of MTN operations now reporting their energy use (Nigeria, Ghana, Cameroon, Congo, Brazzaville, Guinea Bissau, Iran, Syria, Yemen, Cyprus, South Africa, Zambia and Swaziland)

• 20: The number of MTN operations that have access to online and offline carbon, climate, energy and CDP training

4.2 Network management Our Base Station Toolkit specifies approved and trial technologies to reduce total site costs including building materials and equipment, services and energy requirements, and reduction of carbon emissions. Our Group’s Environmental Management Policy is supported by Environmental Management Systems (EMS) in a number of operations. MTN South Africa’s EMS is based on ISO14001 and to date has been successfully assured each year. Network infrastructural impacts addressed by our EMS include essential environmental processes and procedures to manage site construction and infrastructure implementation, waste minimisation, prevention of pollution, and management of land, unique flora, forests, water and wildlife. Due to the complexity of site build projects, we require our project

Eco-responsibility continued 03

Supporting clinics in Yemen

A lack of access to adequate medical facilities in Yemen is a concern, with many

underprivileged communities unable to afford medical consultation fees and the cost

of treatment. This has been further exacerbated by social and political unrest.

MTN Yemen has funded the operational costs of three medical clinic facilities. This support

ensures the provision of free medical services, which includes dispensing medication,

obstetrics and gynaecological treatment, paediatrics and first aid support. In 2012,

approximately 30 000 people used the services of these clinics.



05Sustainable societies


Sustainable societies

Our new strategy places our stakeholders at the heart of how we create value. Supporting the development of sustainable societies is a challenge for a cross-function of entities, from governments and international organisations, to companies and community members.

The report below summarises our efforts, successes and challenges with respect to issues of health, safety and ethics, which are intended to support a sustainable society. More information about MTN’s corporate social investment via our Foundations and employee volunteering initiatives can be located at www.mtn.com

As MTN, we place emphasis on contributing to safe, healthy and empowered societies through investment in our employees, our customers and our communities.

• 31% increase in employee training and development• 5 official languages and 55 nationalities in 23 countries

indicate diversity• 3 000: The approximate number of new full-time jobs

created in 2012 • 100%: The percentage of employees undergoing annual

performance reviews• 1/3: The reduction on reliance of expatriates to staff

operations in Afghanistan, Benin, Ghana, Guinea, Conakry and Liberia

Fast data facts


We regret to report two work-related fatalities in the year, one each in Ghana (third-party contractor accident on network site) and Syria (heart attack by full-time employee at the office). We also had 36 work-related injuries.

5.2 Electromagnetic fields (EMF)Our staff, contractors, customers, communities and regulators have a vested interest in the way we manage the electromagnetic frequency of cellular handsets and network equipment. We keep up with the latest international research and scientific publications on EMF, and we comply with the following international standards:

� International Commission on Non-Ionizing Radiation Protection (ICNIRP).

� World Health Organisation (WHO). � Institute of Electrical and Electronics Engineers (IEEE), the National Radiological Protection Board (NRPB (UK)) and European Union (EU) standards.

MTN distributes handsets directly in South Africa and Nigeria. In both countries, vendors are required to provide electrical and electromagnetic certification to the Independent Communications Authority of South Africa (ICASA) and the Nigerian Communications Commission (NCC) respectively. These certificates are based on Electrical Safety Testing EN50191 and European Standard for Safety of Battery Chargers ENE 03352-29 standard for South Africa, and international specifications and regulations for Nigeria respectively.

More general health and safety risks may be faced by field workers and employees who are required to conduct extensive mobile telecommunications. Employees and contractors at higher electromagnetic field (EMF) network risks are required to undertake annual compliance training and certification.

Sustainable societies continued

5.1 Employee health and safety In 2012, we tried to better understand how the health and safety of our employees is addressed in all our operating countries. We learned that 45% of our operations have staff health and safety committees and permanent employee safety representatives, while 59% of our operations monitor operational health and safety matters through business functions or nominated representatives. All our operations have access to International SOS (ISOS) and Control Risks Groups (CRG) partnership with MTN. This partnership offers 24-hour access to an international alarm centre for medical, travel, security and crisis-related emergencies. These services are also available to MTN’s employees as they undertake international travel, our expatriate employees and their dependants.

Over the past few years, we have seen increasing levels of national social upheaval in some of the countries in which we operate. In countries with particularly high incidents of unrest, customised safety solutions are implemented to complement the ISOS and CRG standard services. These may include increased security services at our premises, 24-hour accessible security control rooms, flexible working hours and remote working tools for employees who cannot safely travel between office and home. Other measures include home relocation and counselling services where necessary, paid extended leave for employees unable to come into the office due to broader community safety risks, and even food vouchers and safe transport services.

• MTN Swaziland has formalised training for health and safety champions, and rolled out an employee heart awareness campaign in partnership with medical experts

• MTN Benin has trained approximately 30% of employees on the process of mosquito net distribution

• MTN Afghanistan is the first of our 22 operations to implement an on-site crèche for the children of female employees, to improve female workplace representation and provide employees with greater peace of mind about the health and safety of their children

• MTN Iran offers fully paid “pollution holidays” for employees unable to leave their homes for the workplace due to air quality levels in the country.

Fast data facts

More information on MTN’s equitable labour, talent management and remuneration practices may be located in the MTN Group Limited Integrated Report for year ended 31 December 2012, available at

www.mtn.com/investors

03


development. However, technology can and may also be used by governments and authorities in all countries of the world to restrict basic rights. Many ICT operators, including MTN, are working hard to understand and implement practical actions to balance the United Nations’ declarations of rights and freedom in the use of ICT services and the UN Protect, respect and remedy framework (Ruggie framework), with the realities and requirements of legal and social operating conditions.

Every telecommunications operator globally exists by virtue of regulatory terms and conditions of mobile licences granted by telecommunication regulators. These terms and conditions provide for the ability of governments to request information from the licence holder. MTN, like all telecommunications companies, being subject to the terms of our licences and local legislation and regulatory conditions, assesses the legality and appropriateness of such requests to determine if it should comply, and the implications of non-compliance, before responding. We have, at all times, acted in accordance with the Code and the requirements of our telecommunications licences and legal obligations. For example, we require all those seeking access to private subscriber information, including government authorities and subscribers themselves, to follow local laws and legal processes. We seek to follow those laws and legal processes in our response to those requests. We would never willingly take any action that would infringe Article 19 of the Universal Declaration of Human Rights with respect to freedom of opinion and expression, or Article 3 on personal security.

Regarding the use of surveillance equipment, as is true for mobile network operators across the world, we are required to cooperate with lawful intercept and law enforcement activities by the governments of the countries in which they operate. These requirements are set out in the local laws of each country, or in the terms of


5.3 Human rights: freedom of expression and privacy Wherever we operate in the world, the MTN Group adheres to a culture of sound ethical business conduct that generates economic value for the greater benefit of our communities and stakeholders and in a manner that is eco-responsible and sustainable. While we acknowledge that we will always experience challenges given our operations across diverse geographical, political, legislative, regulatory, cultural and social contexts, our intention is to always conduct our business responsibly, ethically and legally, ensuring that in all instances we have acted to the best of our ability. This is our position on ethical business.

We operate in 22 countries across Africa and the Middle East. These are diverse geographical, political, regulatory, socio-economic and cultural contexts which add a significant degree of complexity to our operations. Our stakeholders demand that we implement solutions to the risks posed by the use of ICT services and restrict or withdraw our services in some instances, while at the same time demanding we also extend access to telecommunications services. Understandably, satisfying the often diametrically-opposed demands and requirements of a range of stakeholders is a daily challenge. We continuously strive to remain ethical at the highest levels and respond to the individual communication needs of each country in which we operate, and we are making progress in finalising our human rights, freedom of expression, privacy and security policy.

The use of information and communication services has been fundamental to creating national citizen awareness and alerting the international community to people’s concerns. The innovation revolution taking place in the information and communication technology sector is helping break down social, economic and community barriers, which are catalysts for positive socio-economic



the licences or other authorisations we have received to operate in each country. In some countries, we are required to cover the cost, or part of the cost, of equipment used by governments for lawful interception and law enforcement purposes. However, governments generally do not wish to share their intercept activities or capabilities with private companies, and so MTN companies are not involved in procuring, setting up or operating equipment used for such purposes.

The use of location-based services also provides a possible risk to public safety, if misappropriated. Location-based services are online applications developed by companies and the public, available via mobile and internet networks, which allow users to access information about facilities and services in their current locality. For instance, users can access information about their nearest shopping and medical centres, entertainment facilities, banks, recreational venues, and the like. Location-based services are therefore a valuable choice for consumer decision making globally, but like all online products, consumers are also expected to exercise due judgement and discretion to maintain the safety of their personal information.

Our business is to facilitate communications in the digital age. Any activity by any party that challenges this position is a challenge to our very existence. We will act to our utmost capacity and scope of influence to continue to achieve our vision of leading the delivery of a new digital world to our markets in a way that is responsible, ethical and sustainable.

MTN Group social and ethics statement “Wherever we operate in the world MTN adheres to a culture of sound ethical business conduct that generates economic value for the greater benefit of our communities and stakeholders and in a manner that is eco-responsible and sustainable.

MTN acts on its social statement through: � Integrating and aligning local and international ethics practice;

� Constantly improving the quality of its services, products and operations;

� Maintaining a reputation of honesty, fairness, respect, responsibility, integrity, trust and sound business judgement; and

� Not tolerating any form of illegal or unethical conduct on the part of all MTN’s employees, leadership and directors and suppliers.

MTN’s ethics culture is a direct result of the conduct and decisions of employees. All MTN employees adhere to MTN’s ethical standards as expressed through the MTN values of integrity, leadership and relationships. The Company values of innovation and ‘can do’ are achieved with due regard for people and planet while profits are a result of consciously understanding, aligning and integrating the various stakeholders’ needs within the diverse markets and geographies we operate in.”

03

Kindergarten facilities available at MTN Afghanistan

MTN Afghanistan launched a fully equipped kindergarten to provide a much needed

service to all women employees in need of the kindergarten. This enabled the mothers to

bring in their children to work and afford them peace of mind and convenient access to

their children during the day.

• All eligible female employees have enrolled their children in the kindergarten.

• The employee engagement score for female employees showed a marked improvement

from 71% in 2011 to 74% in 2012.

• Both male and female employees have welcomed this initiative.



06Annual sustainability statements


Annual sustainability statements

We use local and global standards, protocols and guidelines to report our responsible business performance. We set out our performance in terms of material indicators that provide a clear, comprehensive and useful measure of our progress quantitatively. The indicators below have been refined which enables us to review our performance and inform current and future business planning.

MTN lodged a detailed report with the JSE SRI annually, and are pleased to advise that we have maintained our listing for 2012.

We are ultimately working towards a five-year rolling reporting cycle, and to increase the scope of quantitative KPIs that are reported and assured each year.

Key sustainability standards of reference: � King Code of Governance (King III) � JSE Social Responsibility Index (SRI) � United Nations Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines and Telecommunications sector supplement (G4 had not been released at the time this report was compiled)

� Carbon Disclosure Project � International Labour Organisation � United Nations Global Compact (first Communication of Progress Report due in 2014) � UN Protect, Respect and Remedy Framework for Business and Human Rights (Ruggie Principles)

Where to find MTN’s GRI and CDP reports:

GRI: www.mtn.com/sustainabilityCDP: www.mtn.com/sustainability and www.cdproject.net


6.1 2012 Sustainability value add reportThe table below complements and extends the MTN Group Value Added Statement reported in the MTN Group Limited Integrated Report for the year ended 31 December 2012.

Indicator Notes Unit 2012 2011 2010

Infrastructure availability

Call setup success rate: % 2G 98,87* Not Not3G 98,57* available available

Dropped call rate: %2G 0,79* Not Not3G 0,48* available available

Network availability: %2G 99,14* Not Not3G 98,53* available available

Employees

Total employees Number 26 705 24 252 26 055Employee turnover % 2,6 7,1 9,6Gender diversity females to total employees % 25 32 34

Females at senior management level and above % 0,85Not

availableNot

availableEmployee learning and development Rm 383 265 249Training hours per employee Hours 32,7 16 30,8Employee culture survey results 1 % 68,87* 69 68Employees receiving performance review % 100 100 100

Employee health and safety

Number of workplace-related deaths Number 2Not

availableNot

available

Number of workplace related serious injuries Number 36Not

availableNot

availableOperations with a health and safety committee and dedicated monitoring representative % 45

Not available

Not available

Operations with a health and safety monitoring representative only % 59

Not available

Not available

Environment and climate

CO2e emissions from energy use 2

Tonnes CO

2e 1 040 722 950 564 1 126 894

Scope 1 – direct emissions 652 790 536 541 743 646Scope 2 – indirect emissions 384 725 407 492 378 869Scope 3 – indirect emissions 3 208 6 531 4 379

CO2e intensity (tonnes) per subscriber 2 0,55 0,58 0,79

E-waste pilot project R’000 1 894 868

MTN Group/South Africa R’000 1 380 179Not

applicable* Indicates key performance indicators which have been subject to assurance by PwC. Please see assurance statement at the end of this report for more details.

Annual sustainability statements continued 03


Indicator Notes Unit 2012 2011 2010

Environment and climate continued

PPP: GIZ 3 R’000 514 543 Not

applicable

PPP: technology station R’000 — 146Not

applicable

Governance

Operations that have implemented fraud management framework % 81%*

Not available

Not available

Number of calls to tip-offs anonymous whistle-blower line Number 886*

Not available

Not available

Economic development and social inclusivity

Corporate social investment (MTN Foundations) 4 Rm 193* 128 155

MTN employee volunteers Number 12 007 12 784 12 981

Black economic empowerment scorecard (South Africa): 100 points

Score out of 100 85,4 86,9 77,1

Ownership (20 base points and 3 bonus points)Score out

of 23 21 21,2 11,6

Management controlScore out

of 10 8,9 8,4 8,4

Employment equityScore out

of 15 12,2 11,8 11,4

Skills developmentScore out

of 15 7,4 8,4 6,8

Preferential procurementScore out

of 20 17 17,1 18,7

Enterprise developmentScore out

of 15 14 15 15

Socio-economic developmentScore out

of 5 5 5 5

* Indicates key performance indicators which have been subject to assurance by PwC. Please see assurance statement on pages 52 to 55.1 Using the Towers Watson Global Telecommunications norms, 15 dimensions (Communication, Leadership, Competitive position, Diversity, Employee

engagement, Innovation, Goals and objectives, Direct supervisor, Work organisation and efficiency, Pay and benefits, Employee development, Performance management, Values, Company image and Retention) comprising over 100 questions, are posed to all employees via an annual survey. This survey assesses the fit between MTN’s goals and that of our employees, and vice versa. The score of 69% indicates an overall average “favourable” response (employee answers of “good” and “very good”). This means 31% of responses were on average unfavourable (employee answers of “poor” or “I don’t know”).

2 We estimate internal under-reporting of over 37% of our energy consumption on scopes 1 and 2. We also are aware of under-reporting on scope 3, but have not calculated the extent (which at this stage we deem not material in relation to our overall emissions). The actual carbon emissions may be higher as a result: we are unable to determine this for FY12 as emission calculations are customised for the greenhouse gas profile of each country in which MTN operates, using UN IPCC GHG protocols, ISO14604, DEFRA and the International Energy Agency conversion factors. We aim to improve the completeness and auditability of opco reporting in 2013.

3 Technology Station’s deliverables completed 2011; no further investment required in 2012.4 The figures reported for 2010 and 2011 exclude MTN employee volunteering costs in 2010 and 2011.

Annual sustainability statements continued


6.2 2012 United Nations GRI ReportWe use the United Nations (UN) Global Reporting Initiative G3 Guidelines and Telecommunications Sector Supplement in our integrated sustainability reporting processes. (At the time this report was compiled, the G4 indicators had not been released.)

We have assessed our GRI application to a Level C (down from Level B reported for financial year 2011). The reason for the drop in the assessment level is as a result of the completeness and nature of information/ disclosure required in terms of the Group’s management approaches. We are working to improve this in future years’ reports.IR = MTN Group Limited Integrated Report for the year ended 31 December 2012.SR = MTN Group Limited Sustainability Report for the year ended 31 December 2012.

GRI indicatorMTN’s response(document, section, page number)

Strategy and analysis

1.1 CEO statement � IR: Group president and CEO’s report pages 32 to 35

� SR: Group president and CEO’s statement pages 4 to 7

1.2 Impacts, risks and opportunities: on stakeholders and financial performance)

� IR: Risk and opportunities pages 10 to 13 � SR: Eco-responsibility page 52

Organisational profile

2.1 Name of reporting organisation � MTN Group Limited

2.2 Products, services � IR: MTN’s core offering page 17 � www.mtn.com/offering

2.3 Operating structure � IR: MTN Group structure pages 26 to 29, governance structure page 68

2.4 Location of headquarters Phase 2 Building; Innovation Centre; 216 14th Avenue; Fairland, South Africa

2.5 Geographic scope/map of operations � IR: MTN Group profile; footprint pages 4 and 5

2.6 Nature of ownership and legal form � IR: MTN Group profile; footprint pages 4 and 5; pages 48 to 65 for the top nine material operations

2.7 Profile of customer base � IR: Core offerings page 17; www.mtn.com/offering

2.8 Scale of operations � IR: MTN Group footprint pages 4 and 5 � SR: MTN Group footprint page 60 and 61

2.9 Changes occurring within the reporting period � IR: MTN Group profile; footprint pages 4 and 5

2.10 Awards received � IR: MTN Group profile; footprint pages 4 and 5 pages 48 to 65 for the top nine material operations

� Various on www.mtn.com

Report parameters

Report profile

3.1 Reporting period 1 January 2012 ending on 31 December 2012

3.2 Date of most recent report April 2012

3.3 Reporting cycle: annual etc) Annual

3.4 Contact point for queries � IR: Administration page 238 � SR: Where to find more information page 51




Report scope and boundary

3.5 How was report content defined � IR: MTN Group about this report � SR: Determining material issues pages 50 to 51

3.6 Report boundaries � IR: MTN Group about this report � SR: Scope, boundaries and integration page 50

3.7 Limitations on scope � IR: MTN Group about this report � SR: Scope, boundaries and integration page 50

3.8 Reporting of joint ventures, subsidiaries etc � IR: MTN Group Annual Financial Statements, Annexure 1 page 212

� SR: Scope, boundaries and integration page 50

3.9 Data measurement � SR: Annual sustainability statement pages 31 and 32

3.10 Restatements from previous report � Not applicable/no restatements from previous report

3.11 Changes from previous report � Not applicable/no restatements from previous report

3.12 GRI table location � SR: GRI pages 33 to 47

Assurance

3.13 Policy on independent assurance � IR: Assurance statement; combined assurance page 113

� SR: Annual sustainability statement pages 52 to 55

Governance

4.1 Company’s governance structure: including major committees

� IR: Group board of directors pages 22 to 29

4.2 Is the chairman also an executive officer? No

4.3 Board profile: number, gender, executive versus non-executive

� IR: Group board of directors pages 22 to 25

4.4 How do stakeholders provide recommendations to the board?

� IR: Interacting with stakeholders page 14

4.5 Link between remuneration and leadership performance

� IR: Our people and remuneration report pages 76 to 95

4.6 Managing conflicts of interest � IR: Corporate governance highlights page 71; page 75

4.7 Process for determining leadership qualifications � The board and Exco members’ skills and qualifications are assessed during their recruitment process. Assessment of board skills is done on an ongoing basis during board evaluation

4.8 Internally developed mission/value statements, principles or codes related to sustainability

� IR: value added statement page 16, key governance enhancements and compliance page 69

� SR: Annual sustainability statement page 30 � www.mtn.com/Sustainability/More_on_sustainability/MTN_sustainability_model.aspx

� SR: MTN Group social and ethics statement page 27




4.9 Board oversight of sustainability � IR: Group risk management, compliance and corporate governance committee (governance highlights) page 78; social and ethics committee pages 98 to 108

� www.mtn.com/Sustainability/More_on_ sustainability/governance.aspx

4.10 Processes for evaluating the board’s sustainability performance

� IR: Governance highlights, Group secretary pages 71 and 72

Commitments to external initiatives

4.11 Use of the precautionary principle � SR: Eco-responsibility: network environmental impacts page 21

4.12 External charters or principles endorsed: eg EEA, GC

� SR: Key sustainability standards of reference page 30

4.13 Strategic memberships endorsed: eg EEA, GC � UN Global Compact � National Business Institute (South Africa)

Stakeholder engagement

4.14 List of stakeholder groups � IR: Our engagement with stakeholders page 14

4.15 How are stakeholders identified? � IR: Our engagement with stakeholders page 14

4.16 Ongoing mechanisms for stakeholder engagement: who, how, what outcome

� IR: Our engagement with stakeholders page 14

4.17 Stakeholder concerns and how the organisation responded

� IR: Our engagement with stakeholders page 14

Economic

Disclosure on management approach

EC: MD Management approach: economic performance, market presence and indirect economic aspects

� We operate at the heart of nations bursting with innovation, creativity and new ideas. We will continue to champion positive change. We are not first world or third world – we believe we are operating in the new world. Working with integrity, we value our relationships with the communities in which we work, our customers and employees, our shareholders and the media, governments and regulators as well as supplies and business and industry partners. We recognise the importance of these stakeholders, among others, in the sustainability of our business

� IR: Group president and CEO statement pages 32 to 35

Economic performance

EC1 Economic value added � IR: Our value added statement page 16 � SR: Annual sustainability statement pages 31 and 32

EC2 Climate change related financial implications, risks and opportunities

� IR: Our top risks and mitigation pages 10 to 13; our environmental performance page 98

� SR: Eco-responsibility pages 20 and 21




Economic performance

EC4 Significant financial assistance received from government

� MTN Group and its operations; excluding MTN South Africa, do not receive financial assistance from government. MTN South Africa contributes 1% of its annual payroll to the National Skills Development Levy. A 50% rebate on this contribution is received, and the Company uses this to further training and skills development programmes

IO1 Capital investment in telecommunication network infrastructure broken down by country/region

� IR: Group CFO report pages 36 to 39; key statistics; five-year review; operational and financial performance review pages 4 and 5; pages 48 to 65

IO2 Net costs for MTN under the universal service obligation when extending service to geographic locations and low-income groups, which are not profitable

� The MTN Group has not separately calculated or ring-fenced the net costs of extending service to geographic locations and low-income communities which are not profitable, due to the nature of the business’ operations in emerging markets across Africa and the Middle East, where low-income and geographic spread of markets are a feature of some of these markets

Market presence

EC5 Standard entry-level wage compared to local minimum wage

� The MTN Group pays entry-level wages equal to or above local minimum wages in each country in which the Company operates

EC6 Policy, practices, and proportion of spending on locally based suppliers

� IR: MTN strategy, vision and mission pages 6 and 7

EC7 Procedures for local hiring: including senior management

� The MTN Group hires locally as far as possible. A significant majority of employees, including management, at each of the Company’s operations are citizens of the respective countries where the Company operates

Access to telecommunications products and services: bridging the digital divide

PA1 Policies and practices to enable the deployment of telecommunications infrastructure and access to telecommunications products and services in remote and low population density areas

� IR: Our strategy, vision and mission pages 6 and 7 � SR: Helping close the digital divide pages 14 to 16

PA2 Policies and practices and business model applied to overcome barriers for access and use of telecommunication products and services, including: language, culture, illiteracy and lack of education, low income, disabilities and age

� SR: Helping close the digital divide pages 14 to 16




Access to telecommunications products and services: bridging the digital divide continued

PA3 Policies and practices to ensure availability and reliability of telecommunications products and services and quantify, where possible, for specified time periods and locations of down time

� IR: Achievements, challenges, opportunities page 15

� Each operation monitors the reliability of its network using at least three or more indicators. These include call setup success rate, dropped call rate, and network availability. Some operations performance were assured for 2012.

� SR: 2012 sustainability value added report page 31 and assurance statements page 52 to 55

PA4 The level of availability of telecommunications products and services in areas where MTN operates

� IR: Operational and financial performance review (top five) pages 48 to 65

PA5 Number and types of telecommunication products and services provided to and used by low- and no-income sectors of the population, with definitions of these designated groups


PA6 Programmes to provide and maintain telecommunication products and services in emergency situations and for disaster relief


Indirect economic impacts

EC8 Positive public impact of pro bono/donated infrastructure and services

� The MTN Group is assessing how our business intelligence reporting solution – MTN Market Performance Report (MPR) – can incorporate some of the required measures to assess our impact in each market where the MPR is run. The Group‘s Foundations strategy is also under review, and monitoring and evaluation are being planned as part of the new strategic approach

EC9 Significant indirect economic impacts: including extent

The MTN Group has not conducted a socio-economic impact assessment. See comments for EC8. However, investment in indirect economic impacts is located at:

� IR: Our footprint page 4; Value added statement page 16; and

� SR: Annual sustainability statement pages 31 and 32




Environmental


EN: MD Management approach: energy, water, materials, biodiversity, emissions, effluents and waste

Our customers live in emerging countries that are resource-rich, but globally are most vulnerable to the effects of climate change. For this reason, we take our responsibility to address our environmental impact seriously. The three most material areas of impact where our efforts can have a less harmful impact on the environment are managing and reducing our greenhouse gas emissions, ensuring our network implementation is environmentally sound, and responding to the global proliferation of electronic and electrical waste. We also know that we can use ICT solutions to help other companies reduce their environmental impact

� IR: Material issues page 9; top risks and mitigation page 13; environmental report page 99

� SR: Eco-responsibility pages 20 and 21

Materials

EN1 Materials used: weight/volume The most material resources used are electronic and electrical equipment. As these are procured from Own Equipment Manufacturers, the MTN Group does not measure the weight and volume

EN2 Percentage of recycled materials used Due of the nature of products and services offered, the MTN Group does not consider this indicator to be material for its operations. The Group is however, looking into e-waste recycling and re-useSR: e-Waste management page 21

Energy

EN3 Direct energy use: by primary source � IR: Review of our performance; our environmental performance page 1; page 99

� SR: Energy, carbon and climate pages 20 and 21; annual sustainability statement pages 31 and 32

� www.cdproject.net (MTN reports)

EN4 Indirect energy use: by primary source � IR: Review of our performance; our environmental performance page 1; page 99



EN5 Energy saved due to efficiencies � IR: Review of our performance; our environmental performance page 1; page 99






Energy continued

EN6 Energy efficiency/renewable energy initiatives � IR: Review of our performance; our environmental performance page 1; page 99



EN7 Initiatives to reduce indirect energy consumption � IR: Review of our performance; our environmental performance page 1; page 99



Water

EN8 Total water withdrawal by source Due to the nature of MTN’s business, this indicator is not material. However, as part of the implementation of ISO 14001 in operations and LEED certification in MTN South Africa responsible water management and use is addressed

EN9 Water sources significantly affected by withdrawal of water

Due to the nature of MTN’s business, this indicator is not material

EN10 Percentage and total water volume of water recycled and re-used

Due to the nature of MTN’s business, this indicator is not material. However, as part of the implementation of ISO 14001 in operations and LEED certification in MTN South Africa responsible water management and use is addressed

Biodiversity

EN11 Location and size of land owned, leased or managed in biodiversity-rich habitats

The MTN Group does not currently report against this indicator

EN12 Impacts of operations on areas of high biodiversity value

� SR: Eco-responsibility – responsible network management page 21

EN13 Habitats protected or restored � Due to the nature of MTN’s business, this indicator is not material

EN14 How impacts on biodiversity are being managed � SR: Eco-responsibility – responsible network management page 21

EN15 Number of conservation list species affected by operations

The MTN Group does not currently report against this indicator:


Emissions, effluent and waste

EN16 Total direct and indirect greenhouse gas emissions by weight

� IR: An overview of our performance page 1; our environmental performance page 99

� SR: Eco-responsibility – energy, carbon and climate pages 20 and 21; annual sustainability statement pages 31 and 32





Emissions, effluent and waste

EN17 Other relevant indirect greenhouse emissions by weight




EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved




EN19 Emissions of ozone-depleting substances by weight


EN20 NOx, SOx, and other significant air emissions by weight and type


EN21 Total water discharge by quality and destination The only water discharged is through the municipal sewer. Due to the nature of MTN’s business, this indicator is not material

EN22 Total amount of waste by type and disposal method

The most material waste generated is old/ redundant electronic and electrical equipment. Some of the Group’s network e-waste is subject to supplier take-back agreements. The MTN Group is in the process of quantifying e-waste:

� SR: Eco-responsibility page 21

EN23 Total number and volume of significant spills No significant spills were reported by MTN operations

EN24 Weight of transported, imported, exported or treated hazardous waste

Due to the nature of MTN’s business, this indicator is not applicable

EN25 Water discharge impacts on biodiversity and water bodies

The only water discharged is through the municipal sewer. Due to the nature of MTN’s business, this indicator is not material

Products and services

EN26 Initiatives to mitigate environmental impacts � IR: Our environmental performance page 99 � SR: Eco-responsibility pages 20 and 21 � www.cdproject.net (MTN reports)

EN27 Percentage of reclaimed products/packaging materials

Not available

Compliance

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

No significant monetary fines and non-monetary sanctions for non-compliance with environmental laws and regulations have been reported




Transport

EN29 Significant environmental impacts of transport use: for products, materials and members of the workforces

Although transportation is not a source of significant environmental impacts and is not deemed material, greenhouse gas emissions associated with transport are quantified.




Overall

EN30 Environmental protection expenditure The MTN Group does not track this indicator as part of core business activity. Through MTN CSI programmes Group-wide, we participate in environmental improvement activities such as planting trees, clearing litter in rivers and beaches/oceans

IO7 Policies and practices on the siting of masts and transmission sites including stakeholder consultation, site sharing and initiatives to reduce visual impacts


IO8 Number and percentage of stand-alone sites, shared sites and sites on existing structures

� 2G: 39,563 � 3G: 11,017 � Stand-alone, shared and existing structure sites’ information not available

� Data includes outsourced sites

Resource efficiency

TA1 Provide examples of the resource efficiency of telecommunication products and services delivered

� IR: our environmental performance page 99 � SR: Eco-responsibility – energy, carbon and climate pages 20 and 21


TA2 Provide examples of telecommunication products, services and applications that have the potential to replace physical objects

� IR: MTN core offerings page 17 � SR: Sustainable economic value – enterprise solutions page 16 and M2M solutions for the environment page 17

TA3 Disclose any measures of transport and/or resource changes of customer use of the telecommunication products and services listed above. Provide some indication of scale, market size or potential savings

Not available

TA4 Disclose any estimates of the rebound effect: indirect consequences of customer use of the products and services listed above, and lessons learned for future development. This may include social as well as environmental consequences

Not available




Labour practices and decent work


LA: MD Management approach: employment, labour relations, occupational health and safety, training and education, and diversity and equal opportunity

� IR: People and remuneration pages 76 to 78 � SR: Sustainable societies – employee safety pages 24 to 26

Employment

LA1 Employee numbers � IR: Overview of our performance page 1 � SR: Annual sustainability statement page 30

LA2 Employee turnover � IR: Overview of our performance page 1 � SR: Annual sustainability statement page 30

LA3 Full-time employee benefits not provided to temporary/part-time employees

� IR: Remuneration structure page 84; fixed remuneration page 84

Labour/management relations

LA4 Percentage unionised employees � The MTN Group does not track this indicator. The MTN Group endorses the standards set out by the International Labour Organisation and the UN Global Compact in this respect

� IR: Social and ethics report page 96

LA5 Minimum notice periods regarding significant operational changes

� The Group provides internal notification to employees regarding significant operational changes

Occupational health and safety

LA6 Employee representation in health and safety committees

� IR: People and remuneration, health and safety page 77

� SR: Employee health and safety pages 24 to 26

LA7 Total number of work-related fatalities, rates of injury, occupational diseases, lost days and absenteeism

� IR: People and remuneration page 77 � SR: Sustainability value add report page 31

LA8 Employee wellness programmes regarding serious diseases

MTN Group has partnered with ICAS, an international risk management services as our employee wellness provider who offer assistance on various issues but mainly counselling as the first phase of issue management. Wellness for serious diseases is also done through the medical aid

LA9 Health and safety topics covered in formal agreements with trade unions

Not available

IO3 Practices to ensure health and safety of field personnel involved in the installation, operation and maintenance of masts, base stations, laying cables and other activities

� IR: People and remuneration, enhancing health and safety page 77

� SR: Sustainable societies – employee health and safety pages 24 to 26




Training and education

LA10 Average hours of training per employee per year � SR: Annual sustainability statement pages 33 to 35

LA11 Employee skills and training programmes � IR: People and remuneration page 76 � SR: Sustainable societies – EMF page 25

LA12 Percentage of employees receiving performance reviews and career development

� SR: Annual sustainability value add report page 31

Diversity and equal opportunity

LA13 Composition of governance bodies � IR: Corporate governance highlights page 68

LA14 Ratio of basic salary of men to women by employee category

Not available

LA15 Return to work and retention rates after parental leave, by gender

The MTN Group does not currently track this indicator

Human rights


HR: MD Management approach: investment and procurement practices, non-discrimination, freedom of association and collective bargaining, abolition of child labour, prevention of forced and compulsory labour, complaints and grievance practices, security practices, and indigenous rights

� The MTN Group adheres to specifications with respect to the International Labour Organisation Protocol on decent work and working conditions (core standards of freedom of association, forced labour, child labour, anti-discrimination). These requirements are integrated broadly in the MTN Group Code of Ethics, and are included in the Group social and ethics committee’s terms of reference. The Group reports its integration and performance against these matters in detail to the JSE as part of the annual JSE SRI review of the Company’s sustainable business performance

� SR: Sustainable societies – inappropriate content, cyber-security, employee security; anti-corruption; human rights pages 27 and 28

Investment and procurement activities

HR1 Percentage and number of significant investments that have undergone human rights screening

0%

HR2 Percentage of significant suppliers and contractors that have undergone human rights screening

0%

HR3 Total hours and number of employees receiving human rights training

0%

Non-discrimination

HR4 Number of incidents of discrimination and action taken

The MTN Group does not currently report against this indicator

Freedom of association and collective bargaining

HR5 Any incidents where freedom of association/collective bargaining was at risk: actions taken





Child labour

HR6 Any incidents of child labour and measures taken In 2011 the MTN Group specifically assessed whether it was compliant with the ILO child labour minimum age specification, and found that it was, with youngest employee was 17 years of age. No similar assessment was undertaken for 2012

Forced and compulsory labour

HR7 Any incidents of forced labour and measures taken No incidents

Security practices

HR8 Percentage of security personnel trained in human rights


Indigenous rights

HR9 Any incidents where indigenous people’s rights were violated and measures taken

No incidents

HR10 Percentage and total number of operations that have undergone human rights reviews

0% in terms of indigenous rights

HR11 Number of human rights grievances filed and resolved through formal mechanisms


Society


SO: MD Management approach: community, corruption, public policy, anti-competitive behaviour and compliance

� IR: Chairman’s statement pages 18 and 19; social and ethics report pages 96 to 98

� SR: Sustainable societies – human rights pages 26 and 27

Community

SO1 Percentage of operations with local community engagement, impact assessments and development programmes

100% of operations undertake development programmes through enterprise development, volunteering, and community-based sponsorships such as in education or health-related fields. The impact of community investment has not been assessed by MTN Group to date. The MTN Group is assessing how our business intelligence reporting solution – MTN Market Performance Report (MPR) – can incorporate some of the required measures to assess our impact in each market where the MPR is run. The Group‘s Foundations strategy is also under review, and monitoring and evaluation are being planned as part of the new strategic approach

Access to content

PA7 Policies and practices to manage human rights issues relating to access and use of telecommunications products and services

� IR: Group strategy page 1; top risks and mitigation pages 12 and 13; social and ethics report page 96 to 98

� SR: Sustainable societies – human rights pages 26 and 27




Corruption

SO2 Business units analysed for corruption risks � The MTN Group’s Fraud Risk Management framework has been rolled out to 81% of MTN’s operations. This framework allows for, inter alia, internal corruption risk assessment

� SR: Sustainable societies – human rights page 27

SO3 Employee training regarding anti-corruption � MTN’s anonymous whistleblower solution for employees and external stakeholders, Tip-offs Anonymous, has been rolled out in operations, and is accompanied by internal electronic and offline awareness campaigns. We use the number and type of calls and emails to the Tip-offs Anonymous telephone lines and email address as an indicator of usage

SO4 Actions taken in response to incidents of corruption

Due disciplinary processes are followed to investigate and resolve matters of ill discipline including corruption. Sanctions may range from warnings to termination of employment. This is reflected in the MTN Group code of ethics and disciplinary policy

Public policy

SO5 Engagement in public policy The MTN Group remains politically neutral in all countries of operation. However, where public comment on national policies is invited, commentary is offered

SO6 Financial/in-kind contributions to political parties MTN recognises that strong democracies require healthy political parties. These parties require resources to sustain and operate a basic party structure robust enough to represent people, develop capacity to contest elections and to contribute meaningfully to policy debates. Section 1 of the Constitution of the Republic of South Africa encourages multiparty democracy by providing parties with public funding to promote a system of government that is accountable, representative, response and open.As there is no single model or framework that governs party funding for corporate entities, MTN adopted its Corporate Political Contributions Policy in 2008. In line with this policy and MTN’s Code of Ethics, the MTN Group board approves an allocation for political parties in relation to their performance in general elections. A similar approach with respect to supporting political parties in all other countries in which the Company operates is undertaken. Political party financial support is only provided should the country hold national parliamentary elections. No national parliamentary elections were held in 2012, and therefore no in-kind and financial support was provided to any political party for 2012





Anti-competitive behaviour

SO7 Number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices

� IR: CFO statement page 36 and page 177

Compliance

SO8 Monetary value of significant fines and number of non-monetary sanctions for non-compliance with regulations

� Telecommunication regulators in some of the countries in which MTN operates have threatened or imposed quality of service fines upon MTN based on network performance standards. Although this information is available in the public domain, we have not quantified the value of these fines for the purposes of this report

SO9 Operations with significant negative impacts on local communities

None

SO10 Prevention and mitigation of significant negative impacts on local communities, by operation


TA5 Description of practices relating to intellectual property rights and open-source technologies

The MTN Group upholds intellectual property rights in its business operations

Product responsibility


PR: MD Management approach: customer health and safety, product and service labelling, marketing communications, customer privacy, and compliance

� IR: Social and ethics report – about freedom of expression and human rights page 98

Customer health and safety

PR1 Lifecycle stages of products/services assessed for health and safety impacts: including percentage of products/services assessed

� IR: Enhancing health and safety page 78 � SR: Sustainable societies – EMF page 25

PR2 Incidents of regulatory non-compliance concerning health and safety impacts of products and services

� Not available

PA8 Policies and practices to publicly communicate on EMF related issues

� SR: Sustainable societies – EMF page 25

PA9 Total amount invested in programmes and activities in electromagnetic field research

� The MTN Group does not invest directly in programmes into EMF research; we abide by the recommendations of the various internationally recognised authorities on this subject (WHO, ICNIRP, IEEE, NRPB(UK))

� SR: Sustainable societies – EMF page 25

Product and service labelling

PR3 Product/service information required by procedures

� Not available

PR4 Incidents of regulatory non-compliance concerning product and service information labelling

� Not available




Product and service labelling continued

PR5 Customer satisfaction practices: surveys etc The MTN Market Performance Report (MPR) is an extensive assessment tool used by our operations to gauge market perceptions and customer experience and perceptions across a number of business dimensions related to network, service, functionality, value, and other indicators, and is reported to the Group executive on a quarterly basis

Marketing communications

PR6 Adherence to marketing, promotions and communications standards

In 2012 MTN Nigeria undertook a sales promotion where customers could participate in a game and stand a chance of winning vehicles. The National Lottery Regulatory Commission was invited into the selection process when MTN Nigeria realised the promotion inadvertently could be interpreted as a lottery promotion. The MTN Group ensures that it complies with local laws, standards and codes

PR7 Incidents of regulatory non-compliance concerning marketing communications

No incidents have been reported by operations

PA10 Initiatives to ensure clarity of charges and tariffs None

PA11 Initiatives to inform customers about product features and applications that will promote responsible, efficient, cost effective and environmentally preferable use

Part of marketing and product information

Customer privacy

PR8 Incidents of substantiated breaches of customer privacy and losses of customer data

Although unsubstantiated, incidents relating to possible breaches of customer privacy or general public allegations as a result of possible misappropriation or interception by government and other agencies have been generally made against both MTN and other global network operators, especially over the last two years as a result of the Arab Spring and global governmental movements to exert greater control over information. These issues are further addressed by the MTN Group freedom of expression, privacy and human rights work currently under internal development, and a summary of the Group’s position and efforts is listed at the links below. MTN Group’s fraud management framework identifies, among other issues, possible risks to customer data or security as a result of, for instance, SIM swaps. A specific instance (MTN South Africa) of the impact of a SIM swap transaction that may be related to breach of customer banking information in MTN South Africa was reported in Quarter 1, 2013. This incident is also under review.

� IR: Chairman’s statement page 18; social and ethics report (About freedom of expression and human rights) pages 97 and 98

� SR: EMF at www.mtn.com/sustainability; freedom of expression, privacy pages 27 and 28

03

Uganda fisherman weather alert system

MTN, Ericsson, National Lake Rescue (NLRI) and the Kalangala Fishing community have come

together in a unique partnership, and combined mobile technology, weather forecasting

and local know-how, to provide a localised weather alert service to fishing villages on Lake

Victoria.

This partnership has made possible the delivery of daily weather forecasts and well-timed

warnings in local languages. The service, still in its pilot phase, is being tested by over 1 000

fishermen in the Kalangala District of Lake Victoria. MTN Uganda, in partnership with Uganda

Department of Meteorology will, upon completion of the pilot, deliver the mobile service

free of charge to MTN customers. The unique weather information service will enable

fishermen and traders to make informed decisions on, for example, when and where to fish

in Lake Victoria, thus helping to save lives and preserve livelihoods.

Lake Victoria was chosen for the pilot. It is the world’s second-largest freshwater lake and

provides a livelihood, directly and indirectly, to over 3,5 million people. The lake supports

Africa’s largest inland fishery and produces over 800 000 tonnes of fish annually, currently

worth about US$600 million.



07About this report


This report provides more detail, and may be located electronically on www.mtn.com/sustainability. We have integrated the Group’s material sustainability risks and KPIs in the MTN Group Limited Integrated Report for the year ended 31 December 2012.

The detailed Group sustainability report covers 20 operations (exclusions are Mascom Botswana and MTN Ethiopia on the basis of indirect ownership holding and recent acquisitions respectively). This report also includes material activities undertaken through Group functions located in South Africa and Dubai.

All financial information is reported in South African rand (ZAR), using the exchange rate as at 31 December 2012 of ZAR8,466:US$1 and Euro11,173.

About this report

This report focuses on key developments during the year and discloses performance on the most material indicators to our stakeholders. It is also aligned to our new business strategy that seeks to address customer experience and optimisation of processes, assets and human resources. This report marks the third year of integrated business reporting and as a business we are maturing as in our implementation of sustainability matters into the business, but acknowledge we still have much to do in this respect. More information about reporting cycles and performance tracking may be located on www.mtn.com/sustainability.

7.1 Scope, boundaries and integrationWhile we have integrated our environmental, social and socio-economic performance, MTN Group Limited Integrated Report (31 December 2012) located on our website, we recognise the need for more detailed reporting on some of these issues to our stakeholders.

High importance to stakeholders; impact on MTN

� Economic performance � Ethics and good governance � Network quality and expansion � Customer satisfaction � Innovative offerings � Security, privacy, safe product use � Employee safety � Investment in employees � Energy and carbon

� MTN Group 2012 integrated report (www.mtn.com)

� MTN Group 2012 detailed sustainability report (www.mtn.com/sustainability)

Medium importance to stakeholders; impact on MTN

� Narrowing the digital divide � Corporate culture � Community investment � Electronic and electrical waste � Network environmental impact

MTN Group 2012 detailed sustainability report (www.mtn.com/sustainability)

Low importance to stakeholders; impact on MTN

� Responsible supply chain � Other environmental issues

� Not formally reported in annual reports

Whe

re re

por

ted

Issu

e

7.2 Determining material issues The MTN Group has adopted the Five Capitals Model developed by the Forum for Future as a framework for managing sustainability and assessing our performance across the economic, social and environmental issues that most impact our business and our stakeholders.

Material issues are those issues that impact our ability to remain commercially viable and socially relevant to our stakeholders. We determine material issues of importance to our company’s ongoing sustainability by reviewing the issues most important to our stakeholders, and the impact of these issues on our business. These issues are indicated below.

03

7.3 Where to find more information

Area of information Where to find

Detailed sustainability reports and positions provide a high-level account of our sustainability strategy, performance, highlights and challenges

www.mtn.com/sustainability

MTN Group Limited Integrated Report for year ended 31 December 2012

www.mtn.com/Investors/Financials/Pages/annualreports.aspx

Sustainability case studies www.mtn.com/sustainability

MTN’s environmental position www.youtube.com/watch?v=4OrNwzddfag

MTN’s carbon disclosure reports www.cdproject.net

Link to Hoffman Report and Group chairman statements www.mtn.com/Investors/circulars/Pages/overview.aspx

Contact the Group sustainability manager via email [email protected]

Contact the executive for investor relations via email [email protected]

More information on MTN’s M2M solutions [email protected]

Please direct post to MTN Group sustainability or MTN Group investor relations as appropriate

MTN Group, Private Bag x9955, Cresta, 2118, South Africa

MTN head office switchboard +27 (0)11 912 3000


Issues identified through this process were weighted in an internal materiality review. Material issues were prioritised according to the scale and nature of impact on business operations, economic performance and specific stakeholder groups.

The material issues which we have prioritised are reviewed by the Group business risk management and/or Group social and ethics committees, and are broadly classified as follows:

� Carbon, climate and energy. � Electronic waste management. � Matters related to social, ethical and human rights issues.

We also maintain our focus on basic, fundamental operational issues such as employee health and safety, diversity and investment employee and community development, and the use of our technology services to ensure Africa and the Middle East continue to benefit from the global digital innovation revolution.

Material issues have a strong bearing on our stakeholders’ assessment and decisions about MTN’s long-term viability and commitment to their needs. To determine materiality, we take the following sources into account:

� Feedback from internal and external stakeholders that review the annual sustainability report.

� Engagement with external stakeholders via the addresses [email protected] and [email protected].

� Communications with media organisations, civil society and community-based organisations, our own customers, and general members of the public.

� Feedback and engagement with the JSE SRI, the CDP, and MTN’s own investors who consult us or assess our responsible business performance.

� Information from third party questionnaires and assessments of our publicly reported performance by university organisations and other third parties not commissioned by MTN.

� Our own internal review and research processes including industry, peer and global developments, and our risk and audit management processes.

More details of MTN’s stakeholder engagement process may also be found on pages 14 and 15 of the integrated report for the year ended 31 December 2012.

About this report continued


Independent assurance report to the directors of MTN Group Limited

We have not carried out any work on data reported for prior reporting periods, nor have we performed work in respect of future projections and targets. We have not conducted any work outside of the agreed scope and therefore restrict our opinion to the subject matter selected for limited assurance.

Respective responsibilities of the directors and PricewaterhouseCoopers Inc.MTN’s directors are responsible for the selection, preparation and presentation of the subject matter selected for limited assurance in accordance with MTN’s internally defined procedures set out in the definitions for assured sustainability key performance indicators on page 54 (the “reporting criteria”) and for the development of the reporting criteria. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of the subject matter selected for limited assurance that are free from material misstatements, whether due to fraud or error.

Our responsibility is to form an independent conclusion, based on our limited assurance procedures, on whether anything has come to our attention to indicate that the subject matter selected for limited assurance is not stated, in all material respects, in accordance with the reporting criteria.

This report, including the conclusions, has been prepared solely for the directors of MTN as a body, to assist the directors in reporting on MTN’s sustainable development performance and activities. We permit the disclosure of this report within the report for the year ended 31 December 2012, to enable the directors to demonstrate they have discharged their governance responsibilities by commissioning an independent assurance report in connection with the report. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the directors as a body and MTN for our work or this report save where terms are expressly agreed and with our prior consent in writing.

Assurance work performedWe conducted our assurance engagement in accordance with the International Standard on Assurance Engagements 3000 Assurance Engagements

We have been engaged by the directors of MTN Group Limited (MTN) to perform an independent assurance engagement in respect of selected identified sustainable development information included in MTN’s 2012 sustainability report for the year ended 31 December 2012 (the report). This report is produced in accordance with the terms of our contract with MTN dated 5 December 2012.

Independence and expertiseWe have complied with the International Federation of Accountants’ Code of Ethics for Professional Accountants, which includes comprehensive independence and other requirements founded on fundamental principles of integrity, objectivity, and professional competence and due care, confidentiality and professional behaviour. Our engagement was conducted by a team of environmental and assurance specialists with experience in sustainability reporting.

Scope and subject matterThe subject matter of our engagement is the Group level data, and the related level of assurance that we are required to provide are as follows:

Limited assurance The following identified sustainable development information in the report was selected for an expression of limited assurance:1. Quality of service (a) call setup success rate – % (page 31); (b) dropped call rate – % (page 31); and (c) network availability – % (page 31).2. MTN CSI spend (ZAR) (page 32).3. Employee culture survey result – overall

performance (%) (page 31).4. MTN fraud management framework

implementation – number of countries that have fully implemented selected proactive and reactive fraud risk reporting items in their audit committee packs (page 32).

5. MTN whistle-blower hotline data (a) number of incidents reported (page 32); and (b) number cases reviewed) (page 32).

We refer to this information as the “subject matter selected for limited assurance”.

03


significant body of established practice on which to draw allows for the selection of different but acceptable measurement techniques which can result in materially different measurements and can impact comparability. Qualitative interpretations of relevance, materiality and the accuracy of data are subject to individual assumptions and judgements. The precision of different measurement techniques may also vary. Furthermore, the nature and methods used to determine such information, as well as the measurement criteria and the precision thereof, may change over time. It is important to read the report in the context of the reporting criteria.

In particular, where the information relies on factors derived by independent third parties, our assurance work has not included examination of the derivation of those factors and other third party information.

ConclusionBased on the results of our procedures, nothing has come to our attention that causes us to believe that the subject matter selected for limited assurance for the year ended 31 December 2012, has not been prepared, in all material respects, in accordance with the reporting criteria.

Other matterThe maintenance and integrity of MTN’s website is the responsibility of MTN’s management. Our procedures did not involve consideration of these matters and, accordingly we accept no responsibility for any changes to either the information in the report or our independent assurance report that may have occurred since the initial date of presentation on the MTN website.

PricewaterhouseCoopers Inc.Director: Herman ZulchRegistered Auditor

Johannesburg28 March 2013

other than Audits or Reviews of Historical Financial Information issued by the International Auditing and Assurance Standards Board (ISAE 3000). This standard requires that we comply with ethical requirements and plan and perform the assurance engagement to obtain limited assurance on the subject matter selected for limited assurance as per the terms of our engagement.

Our procedures relating to the subject matter selected for limited assurance primarily comprised:

� reviewing the processes that MTN has in place for determining the subject matter selected for limited assurance included in the report;

� obtaining an understanding of the systems used to generate, aggregate and report the subject matter selected for limited assurance;

� conducting interviews with management at corporate head office;

� evaluating the data generation and reporting processes against the reporting criteria;

� performing key controls testing and testing the accuracy of data reported on a sample basis at two operating companies (OPCOs) material to Group reported data for the subject matter selected for limited assurance; and

� reviewing the consistency between the subject matter selected for limited assurance and related statements in MTN’s report.

The procedures selected depend on our judgement, including the assessment of the risk of material misstatement of the subject matter selected for limited assurance, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to MTN’s preparation of the subject matter selected for limited assurance in order to design procedures that are appropriate in the circumstances.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusions.

Inherent limitationsNon-financial performance information is subject to more inherent limitations than financial information, given the characteristics of the subject matter and the methods used for determining, calculating, sampling and estimating such information. The absence of a


MTN Group sustainability assurance 2012

KPI Description of KPI

Quality of service

Quality of service is a technical measure used to judge 2G and 3G network performance regarding the end-user customer experience. As revenue and customer satisfaction is related to network performance and quality, the following aspects will be used to determine if MTN is meeting end-user demands:

� Network up time as measure by traffic channel availability (TCH availability all hours (%)). � Call services measured with call setup success rate (CSSR) all hours. � Calls dropped using the definition for dropped call rate (DCR) all hours.

The rates reported are for the Group level, and for the reporting period 1 January – 31 December 2012.

Employee culture survey result

The MTN Group employee culture survey is conducted annually across each of the MTN Group’s 21 operating countries (referred to as OPCOs), and within the MTN Group Head Office (management company referred to as MANCO). The survey is conducted at a business unit level and at a team level within the business unit.

The survey reviews 14 dimensions that assess the extent to which MTN’s SFTE (Standard Full Time Equivalent) employees are a fit for the Company’s operational and competitive requirements as defined by the Group’s vision and strategy:

� Employee engagement � Leadership � Employee development � Performance management � Employee diversity � Pay and benefits � Company image � Competitive position � Innovation � Work organisation and efficiency � Direct supervisor � Communication � Goals and objectives � Values

MTN fraud management framework implementation

The MTN fraud risk management framework (FRM) outlines the minimum requirements for proactive and reactive fraud risk management across the MTN Group. Implementation of the FRM guideline is considered in place should the following proactive and reactive actions be reported in the operating company's (OPCO's) quarterly audit reporting committee packs:Proactive reporting requirements: Top fraud risks identified and rated (mandatory) and awareness raising, training activities undertaken (other best practice).Reactive reporting requirements: Fraud investigation is taking place (mandatory) and feedback on whistle-blowing/tip-offs is recorded (other best practice).

MTN whistle-blower hotline data

The anonymous tip-offs line is managed by a third party, who collects the tip-offs and reports to MTN. MTN is responsible for the investigation of the tip-off. The tip-off items include fraudulent tip-offs and other administrative matters.

A matter is regarded as received when the call is logged on the anonymous tip-off line and MTN informed of such matter reported. It is regarded as reviewed when MTN has the information of the tip-off available to investigate the matter. A matter will be regarded as reviewed, as information to investigate the matter is available, but the issue may not yet be resolved.

Description of KPIs for reporting purposes.Reporting period: 1 January – 31 December 2012

03


KPI Description of KPI

MTN CSI spend MTN Group’s corporate social investment (CSI) activities are implemented through two vehicles: MTN foundations in some of the countries in which MTN operates, and 21 Days of Y’ello Care (an employee volunteering initiative undertaken over a set period of 21 days annually). MTN CSI comprises of financial, in-kind and employee volunteering initiatives undertaken by the MTN Group and its operations for the benefit of communities and other stakeholders in the countries in which MTN operates.

The following areas of spend are recognised for the purposes of CSI reporting: � All direct financial and in-kind contributions (financially quantifiable) to initiatives in the following sectors:

– Education, including non-commercial sponsorships and bursaries – Health, including non-commercial sponsorships and bursaries – National priority foundation investment, which should ideally be aligned to the millennium development goals.

� Economic Empowerment initiatives � All employee volunteering initiatives authorised and approved annually by the Group stakeholder relations CSI function, in terms of the 21 Days of Y’ello Care programme. Employee volunteering time is calculated by reports from employees, who are required to provide average times allocated to project support during the 21 days.

� CSI spending excludes investment with a direct marketing revenue benefit, commercial and political sponsorships

� CSI spend includes operating expenses and management fees associated with the running of foundation and volunteering activities, where these are included in the foundation's trial balance and general ledger account.

Transforming our head office to a LEED-certified green building

The Leadership in Energy and Environmental Design (LEED) green building certification

programme is a US benchmark for the design, construction and operation of green

buildings. We started the MTN 14th Avenue LEED certification application process early

in 2009.

Since then, we have implemented numerous green strategies including energy-efficiency

programmes, water-efficient fixtures and fittings, a green cleaning programme and a solid

waste policy with stringent goals on diverting waste from landfill.

To access the full project scorecard, see http://new.usgbc.org/projects/mtn-14th-avenue



08Glossary


Term Definition

3G Third generation internet connection that allows mobile phones to send and receive larger volumes of data, such as live broadcasts, video clips and emails

BBBEE Broad-based black economic empowerment, a South African national initiative to enable economic participation for black South Africans

BTS Base transceiver station

CDM The United Nations Clean Development Mechanism allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol (Annex B Party) to implement an emission-reduction project in developing countries

CDP Carbon disclosure project

CO2

Carbon dioxide

CO2e Carbon dioxide equivalent

Convergence Information and communication technology products and services combining voice and data

EASSy Eastern Africa Submarine Cable System

EDGE Enhanced data for GSM Evolution (EDGE) delivers 2G technology that delivers advanced mobile services such as downloading video and music clips, full multimedia messaging, high-speed colour internet access and email on the move. It is five times faster than conventional GPRS

EIG Europe India Gateway (EIG) submarine cable

EMF Electromagnetic frequency or radio signals or waves, or energy that travels through space

GB Gigabyte

GDP Gross domestic product

GHG Greenhouse gas; unless indicated otherwise, GHG emissions are made up of CO2, Methane (CH

4),

Nitrous oxide (N2O), Hydrofluorocarbon (HFC), Perfluorcarbon (PFC) and Sulphur Hexafluoride

(SF6). The United Nations has identified these six gases as the greatest contributors to global

warming

GSMA Global System for Mobile Communications Association

GPRS General Packet Radio Service (GPRS) is a connectivity solution based on internet protocols that support a wide range of enterprise and consumer applications

HSDPA High-Speed Downlink Packet Access (HSDPA), part of the evolutionary path of 3G

ICASA Independent Communications Authority of South Africa

ICNIRP International Commission on Non-Ionizing Radiation Protection: www.icnirp.de

ICT Information and communication technology

IFC International Finance Corporation

ITU International Telecommunications Union

King III King III Code of Corporate Governance for companies operating in South Africa

LEED Leadership in Energy and Environmental Design

LTE Long-Term Evolution

Glossary


Term Definition

MMS Multi Media Services

MTR Mobile termination rates

MW Megawatt

Opco Abbreviation for MTN operation

RF Radio frequency

SEACOM Submarine cable linking South and East Africa

SMS Short Messaging Service

Sustainability Defined as ability to meet human needs in the present while preserving the environment so that these needs can also be met in the indefinite future. It requires understanding the many interconnections between economy, society and the environment

TEAMS The East African Marine System submarine cable

UNEP United Nations Environmental Programme

UNFCC United Nations Framework Convention on Climate Change

UNWFP United Nations World Food Programme

WACS West Africa Cable System

WAP Wireless Application Protocol

WHO World Health Organisation

03

Yemen

Swaziland

Afghanistan

Congo-Brazzaville

Benin

Cyprus

Rwanda

Zambia

Botswana

Guinea-Bissau

Liberia

Guinea ConakrySouth Sudan

Dubai†

Our footprintGhana

11,7MSubScriberS

Cameroon

7,3MSubScriberS

Nigeria

47,4MSubScriberS

Ivory Coast

6,1MSubScriberS

* Percentage of Group revenue**Share of MTN Group capex

†Group presence through corporate office in Dubai

Revenue (Rm)

6 862 *5,1%EBITDA margin

37,0%Capital expenditure (Rm)

1 091 **3,6%

Revenue (Rm)



903 **3,0%

Revenue (Rm)



13 733 **45,6%

Revenue (Rm)



724 **2,4%


Yemen

Swaziland

Afghanistan

Congo-Brazzaville

Benin

Cyprus

Rwanda

Zambia

Botswana

Guinea-Bissau

Liberia

Guinea ConakrySouth Sudan

Dubai†

South Africa

25,4MSubScriberS

Uganda

7,7MSubScriberS

Sudan

7,9MSubScriberS

Iran

40,5MSubScriberS

Syria

6,0MSubScriberS

Revenue (Rm)



6 416 **21,3%

Revenue (Rm)



435 **1,4%

Revenue (Rm)



1 336 **4,4%

Revenue (Rm)



1 122 **3,7%

Revenue (Rm)



577 **1,9%


BASTION GRAPHICS

welcome to the new world - mtn group

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