The fact that we have maintained our listing on the JSE Social Responsibility Index
attests to our efforts, but we are acutely aware of the need to improve our sustainability
performance on an on-going basis, so we are focused on ensuring sustainability and
core business work hand-in-hand.
Sifiso Dabengwa tells us about Sustainability
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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What was your highlight in 2012?
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
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
Tell us a little about business
conditions and MTN’s responses in 2012?
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 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 paying a closer look on the supply chain management, even looking at
how our business and operating culture can carry us into the future. As MTN, we
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.
In the same year, allegations of inappropriate behavior were leveled against MTN
by Turkcell, regarding the operating license 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 network 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 –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 – 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 R30billion into network capacity,
and continue our 4G/ LTE investments.
MTN’s reputation has been affected
lately as a result of allegations that the company’s network is used for the wrong
reasons such as possible breaches of privacy and challenges to human rights and
freedoms regarding communications in some of our markets. How can you sum up a response
around these issues?
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 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 attests 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
Our business is to facilitate communications in the digital age. We remain a-political,
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 licenses 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.
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 impact?
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
areas 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 the MTN Group head office campus
in South Africa. 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.
What has been MTN’s greatest
achievement on the sustainability front?
I think we are making some progress on embedding responsible environmental and social
business requirements into the business; there is 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 the use of 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 the 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.
In most of your operations,
MTN is known for the work done in communities. Why is this key focus for MTN when
the business is in a state of transition?
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 governments 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
This was also supported by our successful employee volunteering programme 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 Care projects were extended to commemorate the 67 minutes
of Mandela Day – this is something we are very proud of.
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.
In the next few years; how are
you going to position MTN to sustain growth in your markets?
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.
We are also working hard at understanding what matters to our spectrum of stakeholders
to ensure we are aligned and try to meet their expectations more effectively.
Global ICT in numbers
- 6 billion cellphone subscriptions with 3.2 billion users globally;
- 3G mobile penetration stands at 3% p.a. in Africa;
- 1.4% (US$1 trillion) of global GDP provided by mobile operators revenues (3.1% in
- 25% increase on cloud computing spend globally since 2008.