Social and relationship capital
Our social and relationship capital reflects our contribution to society. This is through our corporate social investments (CSI) responsibilities which contributes to the long-term sustainability of the communities in which we operate and the relationships we have, which are central to our business.
Transformation and B-BBEE
The group is firmly committed to B-BBEE in South Africa and believes that meaningful participation by black people in the mainstream economy is essential to sustaining South Africa’s economic and democratic structures. Telkom views transformation as a catalyst to address South Africa’s socio-economic challenges and its associated impact on business. Our approach to B-BBEE certification is based on sustainable transformation that goes beyond compliance.
Telkom’s B-BBEE certification rating also impacts the group’s ability to attract business. We have initiated strategies and programmes to improve the B-BBEE certification status of the group. These include a transformational and compliance plan to address the priority elements; the implementation of an aggressive Skills Development and Enterprise Supplier Development programme; and the cascading down of the B-BBEE certification plan and targets to an individual team level to incentivise performance.
Given the importance of the B-BBEE certification rating in BCX’s ability to attract and maintain business, it was rated independently. BCX established a social impact office to execute its social commitment to the market and its employees. The objective is to position BCX as a digitally, economically and socially active member of society. In this inaugural year, BCX established a cohesive social impact strategy that adequately drives this agenda. It established a B-BBEE certification unit within the social impact office. Efforts in this space ensure BCX’s dedicated compliance to business transformation is in accordance with the stipulated guidelines.
Through the group’s commitment to B-BBEE certification, Telkom’s rating has improved from level 6 to level 4, and BCX was rated level 3.
As a JSE-listed company, Telkom’s diversified shareholding structure consists of individuals, government, local and international companies and mandated investment funds (refer to page 124 and 125; and page 100 of the consolidated annual financial statements available online at www.telkom.co.za/ir).
With the current shareholding structure, Telkom has a total black ownership of 24.42 percent (FY2017: 14.33 percent).
Improvement in the black shareholding percentage is due to the continuation of the employee forfeitable share plan (FSP), which was introduced in 2013. The employee FSP allows Telkom employees to become shareholders, and acquire dividends and voting rights at the company’s AGM.
When calculating the black ownership annually, we conduct an analysis using the independent expert person’s report on mandated investments. Telkom will continue to investigate other sustainable options for implementation to improve the current black and black women ownership percentage.
Telkom is steadily progressing towards targets for both the national economically active population and internal EE as set out in the EE plan. The expiration of the previous EE plan allowed Telkom to conduct a deep analysis into its policies and procedures to identify barriers to diversity and inclusion. It also conducted an online survey to determine what employees perceive as barriers to EE. The business units have incorporated measures and strategies to eliminate those barriers into its EE plans, and these plans were consolidated into a Telkom company EE plan.
Individual business unit forums ensure accountability for the numerical targets and the qualitative affirmative action measures set in the Telkom company EE plan, as well as individual business units’ EE plans. These business unit forums will be instrumental in cascading the overall EE plan and assisting the national Telkom company EE and skills development forum with implementing any plans in the business units.
Over the years, Telkom has invested in youth development through a myriad of programmes ranging from educational support for high school learners, bursary programmes for further education and training, learnerships, internships as well as support for young entrepreneurs.
Skills development programmes
For more information on skills development, refer to human capital on page 69.
Enterprise and supplier development (ESD)
ESD is an important part of our social commitment. Through FutureMakers, launched in May 2015, we have invested over R381 million (R250 million capex and R131 million operational expenditure) in the programme, and support the ESD drive in the ICT sector. The programme specifically supports small black-owned enterprises with a focus on channel development, supply chain development and technology innovation.
Since the inception of FutureFund in 2015, R250 million was invested as capital into the Future Makers investment fund, which focuses on providing seed, early stage and commercial finance to qualifying black-owned and black women-owned enterprises.
In FY2018, R47 million was incurred towards providing non-financial support such as connectivity, office space, gap analysis services, business strategy development, mentorship, business training and auditing services. More than 2 500 small businesses have benefited from the non-financial support with 1 604 direct jobs created.
Telkom group invested into the Telkom Channel Partner programme to penetrate and diversify the market including township and peri-urban areas where it is imperative to develop black-owned channel partners. The programme is aimed at:
- Development and support of high-performing sales force distributor enterprises to drive product and services sales for Telkom Consumer and Openserve.
- Creation of job opportunities for the unemployed youth in townships and rural areas though the employment of sales agents.
- Developing of a black-owned airtime vending platform. It facilitates the selling of Telkom airtime, and enables black dealers to access the airtime vending platform to sell Telkom airtime and data, with a full commission benefit.
Telkom’s supplier development is geared to transform the group’s supply chain. It aims to increase the number of black suppliers, increase spend on black-owned and black women-owned suppliers, and develop their operational and financial capabilities. Access to procurement, finance, connectivity and business training is provided.
This programme supports digitally innovative black start-ups and existing businesses to generate ideas, develop and commercialise their business solutions. It aims to support them to develop their innovative solutions, while BCX will commercialise these solutions. The programme supports them from ideation, incubation, acceleration to commercialisation. A new Tshimologong hub in Braamfontein was launched in October 2017, under the BCX banner.
Three hubs were financially supported (Bandwidth Barn in Cape Town, Propella in Port Elizabeth and Tshimologong in Johannesburg). In all, 1 300 technology entrepreneurs are supported by the hubs with various support instruments including virtual and physical business incubation, business development support, hot desks, technology events and connectivity and market linkages.
The I’M IN Tech Accelerator programme was launched in 2017 with a R16.2 million investment. This is a preinvestment readiness programme that believes in making a sustainable impact on the entrepreneurial ecosystem. Early stage entrepreneurs with an exceptional business concept and market-viable product or service are invited to present their innovative ideas to a group of high net-worth individuals. To date, R5 million has been allocated and has benefited 17 black-owned technology enterprises with financial and non-financial support to accelerate their business growth and advance their business solutions.
The Technvst commercialisation programme was launched in April 2017 in partnership with Microsoft, Technology Innovation Agency and Identity Development Fund. The focus of the programme is to prepare and develop qualifying small South African technology companies through funding, business development support, market access and acceleration functions, that include general business incubation, technical support as well as software tools and products. It supports 19 black-owned enterprises with financial and non-financial support to commercialise their business.
As part of socio-economic development, Telkom Foundation manages Telkom ’s and BCX’s CSI initiatives. The Foundation is committed to helping disadvantaged communities through structured programmes. It promotes and embeds a culture of giving across the group through its programmes and employee voluntarism. The Telkom and BCX Foundation strategy, along with Yellow Pages’ CSI policy, guides investment. The strategy is aligned to technology-blended support, employee volunteering programmes and partnerships.
Telkom Foundation invests in education to deliver sustainable change. ICT is integral to the Foundation’s education strategy, and it empowers teachers and improves their capabilities. The Foundation works with our human resources department and other industry players to pool potential ICT learners for further development.
|Yellow Pages’ CSI
The programmes’ sustainability is crucial to success. To this end, all the programmes initiated during the financial year will continue to run for the next two years, while other programmes and initiatives are being put in place to ensure long-term sustainability.
Our key focus is education with integrated social development and employee volunteering. Telkom Foundation will continue to work with government, non-profit organisations and corporate partners to support schools in two provinces, namely Eastern Cape and Gauteng. The programme is aimed at bringing about systemic change through professional teacher development and support, school leadership development and learner supplementary tuition.