Level 1 BEE status sharpens the telco’s competitive edge in the SA market
JOHANNEBURG – In a move that positively deepens Vodacom’s transformational role in South Africa and demonstrates the telco’s commitment to the ideals of the Broad-Based Black Economic Empowerment (B-BBEE), today Vodacom (Pty) Ltd announces that it has achieved the highest BEE contributor score of Level 1.
Vodacom earned the Level 1 BEE status by accelerating a concerted transformation strategy, ensuring that the mobile provider exceeds its financial year 2018/19 targets against all the seven components of the B-BBEE scorecard. These components are Ownership, Management control, Employment equity, Skills development, Preferential Procurement, Supplier Development, Enterprise development and Socio-economic development (corporate social investment initiatives).
This feat was made possible through a R2.3 billion direct implementation cost to Vodacom over the past financial year in addition to all the indirect costs associated to implementing B-BBEE, which saw Vodacom move from Level 3 BEE status to Level 1 over a year.
Commenting on the occasion of achieving Level 1 BEE status, Vodacom Group CEO Shameel Joosub, said:
“My EXCO and I are delighted at this exceptional achievement by our organisation when the calls to transform our economy from the leaders of the Sixth Democratic parliament are growing. This accomplishment comes at a time when our economy is faced with many challenges. It demonstrates how serious we are about being part of the transformation of South Africa and its people, especially the poor of our country. As a company with strong local roots, it has always been our resolve to help our government towards its vision of achievement of a substantial change in the racial composition of ownership and management structures in our economy.”
Some of the contributors to the new score of Level 1 BEE status include:
In June 2018, Vodacom announced a new ground breaking empowerment transaction worth up to R16.4 billion, the largest ever BEE transaction in the South African ICT sector. The deal includes all Vodacom’s existing BEE partners, our existing YeboYethu Employee Share Ownership Plan (ESOP) and a new staff scheme called Siyanda. The transaction, which cost the mobile network provider R1.15 billion, increases the effective BEE ownership in Vodacom Group to about 20%.
As part of Vodacom’s commitment to continuous employment skills development of its employees, the company invested R556 million in skills development. The investment takes into consideration amongst other costs, internal and external bursaries, training of staff members, graduate and learnership programmes, training of youth across the country through the Youth Academy. For instance, the company spent over R17, 2 million on learnerships and of the 160 learnerships opportunities it created, it employed 120 candidates on a full-time basis for the year. Just over R12 million was spent on skills training for black youth with disabilities.
On procurement, Vodacom spent over R9 billion to greater than 51% black-owned suppliers in addition to the R9.2 billion the company spent on suppliers that had greater than 30% black women ownership. It also paid out R830 million to black SMME suppliers within three days of invoice during the financial year.
A focus on enterprise creation and development is key to the ICT sector. For the 2018/2019 alone, Vodacom’s total investment in enterprise development amounted to R345 million and R164.5 million for supplier development. The telco helped to transfer an additional 27 Vodacom shops into the hands of black people; most of which received 70% in the capital funded by Vodacom at an interest rate of 50% of prime. Furthermore, the company supported 55 black SMMEs with NOSA accreditation at no cost to them. They’ve also transferred ownership of 200 tower sites to 4 black-owned tower companies, with financial support amounting to R16 million.
As an active corporate citizen, Vodacom is one of the pioneers of social transformation through ICT. In the past financial year, the company invested over R183 million in community projects to transform the lives of black people through the Vodacom Foundation.
“Our level 1 BEE status is a very clear demonstration of our commitment to our country and sharpens our competitive edge and gives us greater credibility. We are serious about the transformation agenda and the development of South Africa and we won’t be deterred in our resolve to play an active role in moving South Africa forward,” concluded Joosub.