Telkom commits to open communication with its stakeholders and engages them on various matters. We strive to respond to stakeholder concerns appropriately and on time to keep them informed. Furthermore, we aim to be transparent about how we address these concerns.
Through our stakeholder engagement framework and policy, we guide how we manage our stakeholder engagements. We structured our Stakeholder Management Programme around identifying stakeholders, engaging with them, understanding their challenges and expectations, and aligning them to Telkom’s strategic and operational objectives and targets.
We engage with stakeholders regularly through appropriate channels.
The Board is the ultimate owner of stakeholder management matters and is responsible for managing response strategies.
The Committee assists the Board in fulfilling its responsibilities by ensuring we manage key stakeholder relationships effectively.
The GCEO ensures commitment to effective stakeholder management.
The Group Exco meeting plan comprises various agenda items, including critical stakeholder matters. The Committee reviews and discusses the stakeholder management profile and assigns certain Members to monitor specific stakeholder groups.
Management implements the overall stakeholder engagement process through the approval of the stakeholder engagement framework and policy.
We assess the effectiveness of stakeholder engagements and relations by linking KPIs to value creation and relationship quality. Properly assessing stakeholder relationships allows management to channel time and effort into those relations that are relatively weak.
In FY2023, we focused on the below stakeholder matters:
Customers underpin our existence and drive our reputation and brand. They consume the products and services we use to generate revenue. Customer requirements guide product or service development in terms of new trends.
Telkom offers customers the most compelling voice and data value propositions on the market, whether budget-friendly for individuals or high-value data packages enabling business customers to stay connected while on the move. We grow the Group’s fixed and mobile network footprint by deploying next-generation networks.
We provide end-to-end ICT products, services and solutions that create a one-stop-shop for our clients to improve cost efficiency, customer experience and productivity. This enables our clients to remain relevant in their markets. We enable customers to enrich and improve their lives through value-added services that can be bolted onto mobile plans or experience-enriching products on fixed lines.
| Interests, needs and expectations |
|
| Telkom’s desired outcomes | |
| Indicators measuring the value Telkom creates and/ or relationship quality |
|
Government and regulators publish policies, legislation and regulations that impact the cost of doing business and our ability to derive a reasonable return on investment.
Regulators issue critical licences, including those necessary to use the radio frequency spectrum. They provide a regulatory and disclosure framework that grants confidence to capital providers. Non-compliance with legislation and regulations can result in penalties and fines.
Telkom contributes to the fiscus through financial contributions such as tax payments, licence fees and contributions to the Universal Service and Access Agency of South Africa. The Group also contributes to enabling the government’s social and economic development mandate through investment in networks and infrastructure.
We contribute to shaping government policies by engaging with government and national regulatory agencies such as ICASA and the competition authorities and participating in industry forums. In addition, we support local procurement and employment and value-adding corporate social initiatives.
| Interests, needs and expectations |
|
| Telkom’s desired outcomes |
|
| Indicators measuring the value Telkom creates and/ or relationship quality |
|
The investor community creates access to equity and debt markets.
It drives demand for Telkom shares and debt securities, thereby impacting our market capitalisation and debt issue capacity.
| Interests, needs and expectations |
|
| Telkom’s desired outcomes |
|
| Indicators measuring the value Telkom creates and/ or relationship quality |
|
Employees possess the intellectual capital required for all core and supporting business processes. They are our strategic partners in ensuring the Group’s sustainability through their performance, culture and skills.
We provide employment and career development opportunities in a nondiscriminatory environment, supported by an integrated, accessible and flexible Employee Wellness Programme that extends to employees’ families. Our remuneration includes various benefits to enhance value to employees.
Telkom’s Learning and Development Programmes aim to foster employee engagement, broaden our employees’ skill base and develop skills for future leadership.
| Interests, needs and expectations |
|
| Telkom’s desired outcomes |
|
| Indicators measuring the value Telkom creates and/ or relationship quality |
Refer to the Human capital chapter for more information. |
Organised labour supports sound labour practices and assists in communicating labour‑related matters. It is a strategic partner in shared value between Telkom and our employees. Organised labour can influence the Group’s strategic plans and operations through industrial action.
Employees are allowed and supported in the exercise of their right to freedom of association. We provide trade unions with access to the workforce and support for shop stewards, and facilitate fee deductions.
| Interests, needs and expectations |
|
| Telkom’s desired outcomes |
|
| Indicators measuring the value Telkom creates and/ or relationship quality |
|
Our value-adding partnerships with our suppliers and business partners allow us to deliver high-quality products and services to customers. Suppliers underpin our value chain and directly influence raw material and other input costs. Business partners often represent Telkom to customers. Suppliers and business partners also impact our ability to meet customers’ expectations.
Suppliers and business partners generate revenue by supplying their products and services to Telkom fairly. Telkom provides partners, suppliers and service providers with a platform to make their products available to the market, and strengthens their brands through association with and/or accreditation by Telkom.
Where relevant and required, we provide training and support to our subcontractors, and our Enterprise and Supplier Development (ESD) and Transformation Programmes support local procurement. We also advocate local employment by supporting and developing local contractors.
| Interests, needs and expectations |
|
| Telkom’s desired outcomes |
|
| Indicators measuring the value Telkom creates and/ or relationship quality |
|
Our communities drive our social licence to operate. We are responsible for contributing to the socio-economic environment in which we operate, and recognise that civil society and forums can impact our operations.
The nature of Telkom’s products and services allows it to add value to communities in a broad context. For example, our infrastructure allows anyone to transact through electronic banking, an ATM, or a point of sale. By providing affordable internet connectivity to individuals and small, medium, and micro-enterprises (SMMEs), the Group supports local employment and economic growth.
The Telkom Foundation and other programmes empower communities with various initiatives focused on education.
| Interests, needs and expectations |
|
| Telkom’s desired outcomes |
|
| Indicators measuring the value Telkom creates and/ or relationship quality |
|
Media, opinion makers and influencers drive reputation and brand perception.
We provide information and context on technical and operational developments and thought leadership on matters affecting our industry.
| Interests, needs and expectations |
|
| Telkom’s desired outcomes |
|
| Indicators measuring the value Telkom creates and/ or relationship quality |
|
Below we set out the overarching key themes that emerged from our stakeholder engagements in FY2023.
| Stakeholder group |
Material engagement theme |
Telkom’s response |
|
| Customers | Quality of service, specifically the network experience which is exacerbated by higher stages of loadshedding. | In response to the impact of loadshedding on our operations, Telkom installed 5 000 batteries at new sites and replaced 1 600 at existing sites.We also increased the number of sites with backup generators, increasing population coverage to 84% for Universal Mobile Telecommunications System (UMTS) and 82% for long-term evolution (LTE) sites, adding 60 mobile generators to the fleet. | |
| Complaints handling, especially around providing sufficient detail on matters and resolving them within an acceptable timeframe. | Continuous enhancement of product portfolios to meet customer needs – launched our FlexOn and Infinite ranges giving customers freedom to control their data usage, resulting in lower product queries/complaints.Operational performance focus and improvements – improved our customer effort score during interaction, achieved lower fault rates on our fibre services and less billing disputes with shorter turnaround time performance. Overall escalations reduced by 35% year-on-year. | ||
| Government and regulators | Concerns generally revolve around broader economic and social issues such as cost to communicate, job creation, providing world-class networks and services such as 5G, bridging the digital divide, etc. | Ongoing constructive engagement with relevant government departments and authorities. | |
| Spectrum matters, including South Africa’s participation in international forums such as the International Telecommunications Union (ITU) and its World Radiocommunication Conferences. | We engaged the regulator on spectrum to promote a pro-competitive environment that supports challenger entities to deliver effective competition that benefits businesses, consumers, and the economy. | ||
| Investor community | Local investors consider the Group’s debt levels to be high. | The Group gearing level1 at 1.8x (including IFRS 16 leases) and 1.1x (excluding IFRS 16 leases) is well within the covenant requirement of net debt to EBITDA being less than 3.0x (excluding impact of IFRS leases). We also intend to reconfigure the debt profile to match the long-term nature of the majority of our assets in the fibre and mobile networks. These will have the impact of shifting short-term debt to long-term debt, thereby alleviating pressure on Group cash flows in the short to medium term. | |
| The impact of loadshedding on operations, the cost base and profitability. | We reprioritised some capex to fund investments in alternative sources of backup power to reduce the Group’s reliance on diesel and mitigate the impact of loadshedding on operations. | ||
| Telkom Consumer focused on increasing the postpaid contribution to revenue. However, as the cost of mobile devices are recognised upfront, but revenue over the period of the customer contract, Mobile EBITDA declined. In addition, handset inventory increased, negatively impacting working capital. |
Post-paid growth "levelled out" and Telkom Consumer slowed down the increase in handset inventory during the last six months of the year. | ||
| Employees and organised labour | Impact of section 189 (retrenchments) and the number of job losses. |
15% of employees in the Group have been impacted by the restructuring process. In line with the consultation process with unions, Telkom extended voluntary severance packages and voluntary early retirement packages to all employees in the Group.Telkom continues to manage the process transparently and socially responsibly in line with labour legislation requirements. |
|