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Employment

Our commercial success is directly linked to the social and economic wellbeing of our employees and the development and application of their skills and talents in the business. The continued expansion of our operations and the introduction of new services have increased our subscriber base exponentially. This has necessitated a renewed emphasis on capacity building, skills development and succession planning across the Group.

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Ongoing staff expansion across borders also requires the development of cultural understanding and new levels of management leadership. Our Y’ello Leader Academy is a year-long programme which actively instils a sense of cultural acceptance and develops leadership maturity among participants. The programme promotes the concept of peer-group appraisals, where individual managers receive performance feedback from both subordinate colleagues and peers, enabling more balanced views of their managerial abilities. The Y’ello Leader Academy was formed two years ago to foster a common leadership vision across the Group and to enable managerial staff at all levels to refine their leadership skills.

Staff turnover

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For the reporting period, MTN Group’s staff complement was 14 067. Some 1 700 employees joined the Group through organic growth and 4 676 through corporate acquisitions. The Group percentage for staff turnover during the year was 8%. Our target for the coming year is between 5% and 7%.

The staff turnover rate for MTN South Africa, specifically, was 9%. Approximately 600 employees were retrenched during the year when their positions became redundant after the restructuring and merger of MTN Network Operator and MTN Service Provider. In many instances, retrenchments were voluntary.

Employee health and wellbeing

In South Africa, MTN has implemented a wellness programme to support employees infected with or affected by various illnesses including HIV/AIDS. The utilisation rate of the programme is approximately 40%, which is good by world standards. Testing for HIV/AIDS is voluntary and results are confidential. MTN has partnered with its medical aid scheme to run awareness programmes. These include HIV/AIDSspecific content as well as information about the administration of benefits. MTN capitalises on World Aids Day to expand awareness in its operations.

The Group HIV/AIDS policy is available on the MTN intranet at www.mtn.com. The policy guides employees on issues such as prevention, handling unfair discrimination of those infected and guiding employees to obtain care and support. Each operation localises the policy to align with regional conditions and cultural dynamics.

As at December 2006, the Group employed 11 481 permanent staff members across all regions.
Number of permanent staff in operations covered in the review

Remuneration

Employees are remunerated in terms of salary bands and increases are performance-based. The Group has performed a salary anomaly exercise and benchmarked salaries against market norms in terms of the various salary bands. Total Group payroll expenditure for 2006 was R2,5 billion.

Total payroll for operations covered in the review (Rm)

A mobile workforce

MTN understands that financial remuneration alone does not inspire a talented and educated workforce. The Group’s strategy of increasing crossborder secondments between regional operations goes a long way toward enhancing job satisfaction and skills growth among mobile employees. The increased potential for employees to travel between operations has also enhanced MTN’s ability to attract highly skilled and experienced individuals.

Whistle-blowing

Whistle-blowing hotlines were introduced into all nine operations covered in the review. All MTN employees are encouraged to report fraudulent activities using the hotlines in terms of MTN’s whistle-blowing policy. MTN will continue to improve fraud-prevention measures in the expanded company through the introduction of a fraud prevention function at Group level. The purpose of this function will be to develop enhanced fraud-prevention guidelines and assist operations in implementing fraudprevention measures.

Code of ethics

The Group’s code of ethics recognises the right of all employees to work in an environment that is free from any form of harassment or unlawful discrimination on the grounds of race, gender, sexual orientation, place of origin, citizenship, creed, political persuasion, age, disability, marital or family status. Employees are urged to promptly report any case of actual or suspected discrimination or harassment to their designated managers.

The Group is committed to the principles of freedom of association and collective bargaining. Accordingly, MTN ensures that open and consistent dialogue with employees is maintained at all times.

Employee fairness

MTN is committed to employee fairness across the Group and institutionalises, as far as possible, fair human resource practices, with a strong emphasis on employee diversity and development. In South Africa, where the issues of employment fairness are legislated, the Group is particularly vigilant in ensuring compliance with the Employment Equity Act. Employment equity forums have been established to handle related issues.

Customer relations

Electromagnetic frequencies

The Group is prudent in its response to public concerns on electromagnetic frequency issues. While MTN respects customers’ views and is committed to responding to concerns, the Company is cautious not to perpetuate unwarranted doubts and perceptions.

To address public concerns meaningfully, MTN co-ordinates public participation meetings to clarify substantiated electromagnetic frequency impacts. Where appropriate, company representatives meet with individual customers who have specific concerns.

Call centre management practices

In our previous report, MTN highlighted the pressures of high call volumes on our call centres due to the increase in non-technical queries from customers. MTN South Africa has since expanded the call centre infrastructure by improving its interactive voice recognition capability to handle more calls. MTN has also increased its call centre staff complement by approximately 300 agents and will continue to enhance this capability in 2007 and beyond.

• On average, our South African call centres handle over 100 000 calls per day. The main issues dealt with by call centres relate to handset technical questions, value-added revenues and directory enquiries. Caller language preferences and levels of technical competency – particularly pre-paid customers – add unique complexities to our call centre operations. The majority of caller issues relate to difficulties in reading recharge vouchers and handset related queries. Where other mobile service providers refer customers with handset queries to relevant handset providers, our South Africa-based call centres provide technical handset assistance.
• MTN Cameroon launched a customer relationship management system in November 2006. The system is aimed at improving customer service activities and enhancing the working conditions of call and service centre staff. This will be achieved through improving customer query handling by giving service staff a single view of customer data.
• The MTN call centre in Swaziland experienced a 35% increase in calls in 2006. This resulted in decreased callanswer rates and lower service levels compared to previous years. Customer queries related mainly to difficulties in remote recharging. Other contributing factors were network failures and network congestion from time to time.

The table on page 118 details call centre performance in the nine countries covered in the review.

Call centre performance review

Customer health, safety and wellbeing

Responsible use of mobile phones

MTN is a key provider of research and information on the safe and responsible use of mobile phones to the South African Cellular Telecommunications Association (SACTA). In collaboration with SACTA, MTN periodically contributes to the generation and distribution of documentation to stakeholders on the safe and responsible use of mobile phones. MTN encourages subscribers to use mobile phones responsibly, particularly while driving a motor vehicle. In South Africa, the use of a mobile phone while driving has been prohibited since August 2000. Drivers should pull over and stop before making a call. If this is impossible, a hands-free kit will significantly improve safety, especially if drivers use voice-activated dialling or answering.

Managing the effects of radio frequency

While research on the potential negative effect of radio frequency exposures is ongoing and not yet conclusive, its management remains a priority for MTN. The MTN Group keeps track of global research, specifically the GSM Association, and receives regular updates on research findings. Guidelines on acceptable levels of emissions are issued by the Department of Health in South Africa, based on the guiding principles set by the International Commission for Non-ionising Radiation Protection (ICNIRP). MTN ensures that its radio frequency emissions are below this level. Should any member of the community voice concern on a specific site, we test emission levels and report on our findings. We also work with the requirements internally to improve safety levels. During the year, the Department of Health confirmed that South African cellphone operators function well within required standards.

Installation and maintenance technicians

The MTN Group is committed to the pro-active management of health and safety throughout the company and its operating units. Our main health and safety risks are associated with routine base station maintenance activities such as working on towers, electric shocks, exposure to electromagnetic fields, exposure to hazardous chemicals as well as the long hours of work and long distances technicians are expected to drive.

The Group addresses these specific risks across the nine operations covered in this review by ensuring that management, staff and contractors are appropriately trained in the Group’s safety and health systems and are aware of health and safety requirements. The Group monitors contractors’ compliance with MTN’s safety, health and environmental (SHE) risk management obligations and periodically audits the effectiveness of the SHE risk programme to facilitate ongoing improvements in line with leading global practice and relevant legal and regulatory requirements.

MTN closely monitors contractors’ activities. In South Africa, contractors are required to adhere to specific contractual SHE clauses relating to numerous legislative acts. These acts place accountability for SHE compliance on MTN as a company. We, in turn, extend these responsibilities to our contractors – both contractually and through extensive educational initiatives and awareness guidelines. We are continuously improving educational programmes to ensure contractors are informed of their responsibilities and adhere to critical safety requirements.

Although MTN met all set safety requirements, it was with great regret that the company recorded one fatality during the year.

Training and education

Training and development

MTN sets minimum standards for training and development across the Group by mandating local operations to:

• Spend approximately 5% of their labour budget on employee training (the table below indicates training expenditure per country).
• Link employee training requirements to their individual development plans. This not only further develops our employees but ensures the effectiveness of our performance management system and succession planning initiatives.

While the Group sets guidelines for training and development, each operation localises training programmes to meet priority competency requirements and align with cultural dynamics. Total MTN Group expenditure for training in 2006 was R133 million. In South Africa, overall expenditure for training was R53 million. This exceeded the skills development levy of 1% of the labour bill by 4%, ie MTN’s training expenditure amounted to 5% of the labour bill. In addition, MTN employees in South Africa can apply for a financial grant from MTN of R5 500 per year to register at any of the country’s academic institutions. Selected studies must benefit the company and the telecommunications sector.

Training expenditure in the countries covered in the review

An employer of choice

The Y’elloStars Awards programme is an important component of the MTN Group’s drive towards becoming an employer of choice across all the countries in which it operates. Staff surveys have indicated a strong desire for an effective reward and recognition programme. Y’elloStars was launched in October 2004 and implemented throughout MTN operating units during 2005. Y’elloStars has become a vehicle for recognising peers and rewarding individuals who have made significant contributions to the continued success of the Group. More than 1 000 nominations were made in the first year.

The purpose of the Y’elloStars programme is to build informal networks of recognition, to show appreciation to those who have gone the ‘extra mile’ and to enhance the culture of MTN as a whole. Recognising and rewarding MTN employees is an essential part of acknowledging the efforts of high achievers and showing MTN’s appreciation for the contributions made in helping the Group achieve its commercial results.

Equity, diversity, non-discrimination and local skills development

Employment equity continues to underscore competency development in the South African operation. Our employment equity strategy was well supported through the company’s competency development initiatives during the year:

• MTN South Africa invested R6,9 million in learnerships and internships in 2006.
• The implemented NQF 2 – 7 learnerships and internships predominantly benefited black learners.
• MTN recouped R3,8 million from government’s learnership and internship grants.
• MTN entered into a partnership with the Innovation Hub CoachLab to develop high-level telecommunication skills of top-calibre black postgraduates.
• In June 2006, 90 learners completed the MTN learnerships programmes, with some graduates subsequently integrated into the company. Thirteen of these learners were disabled youths.

The programme was launched in 2003 and is geared towards training unemployed school leavers or university students but has been extended to include MTN employees. Two MTN trainers graduated and received the national diploma in occupationally-directed education, training and development practices. This is the first such qualification to be awarded through the process of recognition of prior learning in South Africa.

MTN emphasises employment equity and is committed to the development of all our employees. Our internal training programme addresses the competency requirements of all levels of staff. This includes training for career growth as well as technical training. MTN follows the guidelines set by the Department of Labour to train a certain number of staff and to allocate a portion of our overall budget to training.

Respect for privacy

The Regulation of Interception of Communications and Provision of Communications-related Information Act, 2002 (RICA) in South Africa requires that all telecoms service providers obtain and retain certain personal customer data when entering into service contracts.

Customer privacy is of paramount importance to MTN. The company maintains, as far as possible, the confidentiality of its customers within the regulatory environment as stipulated by RICA. MTN does not divulge personal details or monitor communications unless mandated to do so by law.

In 2007, MTN will place more emphasis on information security and engage with our local operations to assess associated risks. This includes customer information security as well as MTN’s data and network security. Once MTN has a concise risk profile it will enhance its systems accordingly and update the requisite policies and procedures relating to information integrity and privacy.

Corporate social responsibility

MTN Foundation

The MTN foundation model is the foremost corporate social responsibility (CSR) management structure for the MTN Group’s related initiatives across all operations. The Group’s CSR framework gives guidance on establishing relevant programmes and new regional MTN foundations. The framework also mandates that CSR initiatives focus on education, health, culture and any other two areas determined by local and regional priorities. The latter is underpinned by each operating country’s unique social challenges.

MTN Cameroon officially launched its foundation in February 2006, bringing to three the number of operations with formal foundations. The roll out of the MTN foundation to other operations will continue in 2007. MTN aims to have fully operational foundations in the more established operations (Uganda, Rwanda, Swaziland, Côte d’Ivoire and Congo-Brazzaville) by the end of 2007. Countries where the foundations have not been officially launched will continue to manage CSR projects based on set guidelines as outlined in the CSR framework. All CSR programmes will continue to be funded by up to 1% of profit after tax, as per the Group board mandate. The table on page 129 shows the CSR spend across all operations and, specifically, the operations covered in the review.

Measuring success

MTN measures the success of its CSR programmes by considering four imperatives:

• The value added to the overall business.
• The sustainability of the project once our contribution is terminated.
• The impact the project has had on individuals and the community.
• The development of partnerships to increase the investment value of the project.

MTN will continue to refine its measurement of successful CSR outcomes in the year ahead.

Philosophy of partnerships

MTN acknowledges the important contributions made by regional governments, local municipalities, numerous global organisations and the private sector in promoting local CSR projects – particularly community and rural initiatives.

• In April 2006, the new MTN foundation in Cameroon signed agreements with the Red Cross and United Nations Children’s Emergency Fund (Unicef ). The foundation donated US$50 000 to each organisation to facilitate microprojects in Cameroon. The Red Cross will use its allocation to finance a road safety programme and to implement an Aids prevention programme. Unicef will use its funding to construct water points in three schools in Adamawa Province as well as campaign for children’s rights in the region.

Corporate social responsibility performance highlights

Healthcare

HIV/AIDS

Through its HIV/AIDS initiatives, MTN aims to promote dialogue on the subject and support for those afflicted by the disease.

• MTN South Africa continues to sponsor the national television programme, Beat It, launched in association with the SABC in 2005. The programme deals primarily with HIV/AIDS-related themes. Estimated viewership has increased from 350 000 in 2005 to 11,5 million in 2006.
• In Nigeria, MTN formally launched the first of its six targeted HIV/AIDS voluntary counselling and testing (VCT) centres in April 2006. Situated in Kogi State, the VCT centre was built, equipped and donated as part of the MTN foundation’s focus on healthcarerelated community programmes. The centre offers pre- and post-test HIV counselling, care and support. More than 500 in-school youth have received training as peer educators in the programme. The centre aims to provide education and services to pregnant women relating to prevention of mother-to-child transmission. More than 250 people have received counselling since the opening of the first VCT centre.

Educational

Schools Connectivity Programme

• The MTN Schools Connectivity Programme in South Africa is part of the MTN foundation’s education portfolio. Since 2002, the project has established 183 multimedia centres aimed at improving the quality of education and access to information technology for learners in rural areas. In February 2006, six schools in Limpopo Province received multimedia centres, raising the number of schools connected to 40.
• The MTN Nigeria foundation launched the third phase of its SchoolsConnect project in Bauchi State in northern Nigeria during the year. The project, designed to provide secondary schools with fully operational computer laboratories, has benefited nearly 50 000 learners and more than 2 000 teachers to date. The third phase will expand the roll out of computer laboratories in the region, each complete with 21 computers, a server and VSAT interconnectivity.
• Since the establishment of the MTN Cameroon foundation two years ago, it has successfully implemented 20 multimedia centres in secondary schools and universities in the country as part of its school connectivity programme. Each of the multimedia centres is equipped with at least 20 computers, a server and VSAT connectivity. An ICT engineer has been appointed to train students and teachers. This project currently reaches more than 60 000 learners.

Art and culture

MTN art and culture

• In South Africa, the MTN foundation’s art and culture portfolio continued its support for the MTN Schools Art Awards. In addition, through this portfolio, the foundation launched a 300-page art book, Messages and Meaning, showcasing artists and art works from the Group’s corporate collection. The colour images of both African and South African artworks in the MTN art collection illustrate a series of 13 essays by leading writers, art historians, anthropologists and curators. The writers share their insights on some of the 1 400 works in the collection. The book will be distributed to libraries and cultural institutions throughout the country.
• In Cameroon, 20 children participated in the Enfants en Eveil training workshops offered by professional artists and designers. Forty paintings, produced by 12 children between the ages of nine and 15, were placed on exhibit in Douala. Titled Regards d’enfants, the exhibition united children from different backgrounds and drew many enthusiasts of cultural history from across the region.

Technological

MTN ScienCentres

• The MTN-supported ScienCentres in Cape Town and Umhlanga in Durban continue to provide worldclass science education. Both centres provide a fun environment for learners while teaching them about scientific discoveries and technological innovations.
• MTN Uganda built a science laboratory for a school in the Kiboga district, enabling more than 100 learners to participate in training workshops for catering, tailoring, arts and crafts. To ensure sustainability, the centre has launched a restaurant offering meals to local residents and visitors; the meals are prepared by domestic science students.

Entrepreneurship

ICT and rural entrepreneurship programme

• Established in April 2005, the ICT and rural entrepreneurship programme in South Africa aims to empower women entrepreneurs through seminars and business training. To date, MTN has established 30 business centres and educated and trained 1 050 women entrepreneurs – an increase of 500 over 2005 trainee figure.

Community upliftment programmes

• MTN South Africa launched MTN@ccess in the township of Alexandra, north of Johannesburg, in June 2006. Via an online portal, the facility provides convenient internet connectivity and access to a wealth of educational information to one of the country’s poorest communities.
• MTN Uganda constructed three school blocks for a school in Jinja, eastern Uganda. The project formed part of MTN’s deliberate strategy of partnering with communities in creating sustainable development. MTN staff arranged a fun day for learners during which they assisted in painting and cleaning classroom blocks.
• For the second consecutive year, MTN Rwanda has sponsored a treeplanting campaign at primary schools across the country. This is in response to the government’s call for the private sector to assist in conserving the environment. The company donated RwD9,8 million during the year to plant 40 000 trees in selected schools across the country. A similar amount will be donated in the coming year.
• MTN Rwanda and Grameen Foundation, a global non-profit organisation that combines microfinance with new technologies, partnered to launch the VillagePhone project in the region. The project will provide affordable telephone services in remote areas with no access to public communications where power supplies are either unreliable or non-existent.
• MTN Swaziland donated US$60 000 to refurbish one of the country’s busiest hospitals. The donations were used to refurbish a maternity ward at the Raleigh Fitkin Memorial Hospital in Manzini, east of the capital Mbabane. The hospital currently serves more than 350 000 people. Also in Swaziland, some 50 MTN staff members, led by the chief executive, combined their efforts to construct a house for a family of four orphaned siblings. Staff also donated clothing and food.
• In September 2006, MTN Congo committed to sponsoring the Diables Rouges, Congo’s national football team, for four years. For the first time in the history of Congolese football, an African company based in the Congo has committed itself to supporting the Diables Rouges. The agreement marks an important stage in the development and expansion of Congolese football.
• In partnership with the WWF, the MTN foundation in Cameroon is developing a programme aimed at educating local people on environmental conservation. With funding of US$300 000, the programme is accompanied by a reforestation campaign, titled ’A Tree for Life’. The campaign aims to support conservation efforts to preserve natural resources in the north and far-north provinces of Cameroon and reinforce an environment-friendly awareness in the northern towns of Cameroon.
• A co-operation programme, initiated between the Cameroon government and Unicef for the period 2003 – 2007, identified Adamawa province as a priority intervention zone considering critical education and health indicators. To ensure rapid results, Unicef implemented a strategy known as ‘Activity convergence for children survival and integrated development’. Within the framework of this programme, the MTN foundation and Unicef signed a co-operation agreement on the protection of children’s rights. The programme, with funding of US$50 000 is targeted at the construction of water points and sanitation facilities in three schools.

VillagePhone Rwanda

To help promote greater telecommunications access for Rwandan villagers, MTN Rwanda and Grameen Foundation, a global non-profit organisation that combines microfinance with new technologies, launched the Rwandan VillagePhone project.

The project provides affordable telephone services in places where there is no access to public communications and where power supplies are either unreliable or non-existent. The concept of village phones was first introduced in Bangladesh and is now finding its way to remote African communities. Since the launch of the year-long pilot programme in the district of Gashora in June 2005, some 50 Rwandans have taken part. Operators will soon be available in 14 of Rwanda’s 30 districts and over the next three years, VillagePhone Rwanda aims to create 3 000 new businesses throughout the country.

A VillagePhone set consists of a mobile handset, an external battery that lasts as long as a month before needing to be recharged and an extended antenna that can read even the weakest signals over long distances.

Modern information management in Nigeria

The role of the library is changing rapidly in the digital age and MTN foundation’s Universities Connect project has been designed to meet these new information management challenges in Nigeria. The initiative is a collaboration between MTN foundation and NetLibrary Nigeria Limited, a development company established to facilitate access to digital information resources worldwide.

The first phase has already been launched at the University of Lagos, where MTN foundation held an interactive session with students in November 2005. The project will provide sustainable access to up-to-date information at tertiary institutions.

It will also provide a link to the world’s largest collection of digital resources from over 5 500 libraries and 300 publishers (through international partners) to assist university students and professors to gain access to digital resources.

Corporate social responsibility recognition

• The MTN Nigeria rural telephone project, a microfinance scheme under the MTN Foundation’s economic empowerment portfolio, won the award for Best Use of Phone in the Community granted by the GSM Association at the 3GSM World Congress in Barcelona, Spain. The Akede Project was first launched with 30 ‘phone ladies’ in 2004. Today 100 women participate in 20 communities. The project trains and equips rural women with the skills and equipment needed to start a call centre in their communities. The equipment includes a handset, SIM pack, airtime, promotional materials, antennae and a battery pack.
• In February 2006, MTN was voted Most Socially Responsible Company by THISDAY Awards in Nigeria. MTN received the award ahead of other significant corporate players. The award is a further endorsement of the wide impact and sustainable social investment driven through the MTN Foundation.
• In June 2006, MTN Uganda received the Transformers Appreciations Award intended to honour Ugandans who have helped transform the country. MTN received the award in recognition of its role in developing the communications sector in Uganda.
• During the year, the Group received a gold award in the sponsorship marketing category of the 2006 Sunday Times Marketing Excellence Awards. This award recognised MTN’s sponsorship of the MTN Africa Cup of Nations, and represented a watershed achievement for the company, transforming MTN into a major player in football sponsorship.
• MTN South Africa received the Progressive Company of the Year award at the Black Management Forum Presidential Awards for Business Leadership. This category rewards companies based on their growth, transformation, empowerment, support of small and medium enterprises and corporate social responsibility initiatives.
• During 2006, MTN Cameroon received four awards, including best price plan with total flexibility, best distribution strategy with the introduction of electronic voucher distribution, best corporate communication with the launch of MTN foundation and best corporate magazine with Y’ello Cameroon edition.

CSR spend across the nine countries covered in the review

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