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02
Value creation
How our leadership
supports value creation
Operating environment
The difficult local and
international environment added
pressure to our operations
and tested the mettle of our
strategy. The international
political climate is perpetuated
by a sense of apathy and
general distrust. Events such as
the US elections and Brexit are
examples of the polarisation in
various parts of society. Such
political events compound
consumer views of anti-elitism
and pro-nationalism.
Economic growth was severely
hampered with an annual gross
domestic product (GDP) growth
of 0.3 percent in 2016
(2015: 1.3 percent), adding strain
to the level of employment
and growth aspired to in South
Africa’s National Development
Plan. This negatively impacted
Telkom, affecting customer
spend which led to intensified
sales and marketing efforts to
retain and grow our reach as the
preferred service provider.
Chairman’s
report
– continued
As we move towards the 2018
financial year we are facing a
deteriorating economy following
South Africa’s sovereign rating
downgrades and the country has
moved into a technical recession.
The economic output of South
Africa is shrinking rather than
growing. In a country like ours,
where unemployment levels
are close to 28 percent and one
out of every two young people
will not find a job, a decline in
economic activity deepens the
socio-economic crisis we are
facing. More than 17 million
South Africans rely on social
welfare grants to survive.
A recession has the potential to
impact every South African, and
presents significant risk to our
businesses.
Our economy needs to grow for the government to be able
to meet the needs of the people who find themselves at the
very fringes of the economy.Telkomneeds to balance these
challenges with investment for future growth in our key areas
such as fibre, mobile and new business ventures. The negative
economic environment presents us with an opportunity to walk
through this journey with our corporate customers by providing
them with solutions which will make them more efficient.
We have to keep improving and aim to be better than our
competitors.
Our greatest differentiator will be the experience we offer our
customers. The combination of innovative products, competitive
pricing and unbeatable customer experience will set us apart
in these trying times. We have to step up in every part of
our business.