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Sustainability review - Contents

Group cash value added statement
for the nine months ended 31 December 2005

  9 months ended
December 2005
Rm
12 months ended
March 2005
Rm
Cash value added    
Cash value generated from revenue 25 932 28 045
Cost of materials and services (12 548) (13 774)
Cash value added by operations 13 384 14 271
Finance income 371 258
  13 755 14 529
Cash value distributed    
Employees 1 428 1 411
Salaries, wages and other benefits
 
1 181
 
1 181
Employees’ tax 247 230
Governments 2 939 4 305
Corporate and indirect taxation
 
2 350
 
3 744
Licence fees 589 561
Providers of capital 1 568 1 201
Finance costs
 
487
 
521
Dividends 1 081 680
Total cash value distributed 5 935 6 917
Reinvested in the Group 7 820 7 612
  13 755 14 529

Group cash value added statement

Setting the CSR bar in African countries:

Leading by example

Corporate social responsibility (CSR) and corporate social investment (CSI) are still frequently perceived to be nothing more than a series of philanthropic donations and “good deeds” in the communities existing in and around a company’s areas of operation. Few companies participate practically in the activities of their partner agencies, and the relationship almost always ends with the proverbial cheque being handed over at a gala media launch.

In Africa, the very depth and breadth of the social, economic and environmental challenges call for more than CSR “showmanship”, a short-term once-off grant to long-term perspective to social interventions. To be a “good corporate citizen” a company must engage with numerous stakeholders to get a sensible and realistic understanding of the most pressing needs in their local communities, and to find meaningful, as well as sustainable, solutions to local development challenges.

In all countries in which it operates, MTN recognises that its role is not only to assist organisations with monetary sponsorships but rather to work with civil society to affect positive change.

Amid an apparent lack of CSR focus and effort in Africa, MTN perceives a real and practicable benefit in promoting partnerships. All MTN Foundations’ projects and targeted CSI programmes are informed by a commitment to collaborative partnerships and ensuring sustainability and long-term impact.

Through purposeful investments and partnerships with NGO’s, government agencies and related capacity-building organisations, MTN has created empowerment opportunities and contributed to socio-economic development.

In Nigeria, for instance, MTN has partnered with School Net Nigeria (an ICT in Education NGO) and State governments to provide 24 public secondary schools with fully operational computer laboratories. In Cameroon, the same ethos underpins MTN’s relationship with organisations such as the World Wildlife Fund for Nature (WWF) and the International Committee of the Red Cross (ICRC).

We are committed to promoting increased levels of CSR in the countries in which we operate. Our partners have commended the impacts of our relationship on their ability to interact with other companies. In turn, we will continue to find new and innovative ways to encourage the development of more partnerships in our operational territories and to lead by example in participating in practical, measurable ways to further CSR in the countries in which we operate.

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Group cash value added statement

Expanding entrepreneurship opportunities in Uganda

MTN Uganda has made a significant contribution towards local job creation and the promotion of local SMEs through its support of informal mobile distribution channels. Local start-up entrepreneurs who set up small mobile telecoms distribution outlets receive initial training and assistance from MTN and discounts on equipment.

However, the informal mobile distribution structure in Uganda is not only expanding the mobile telephony market to lower income groups but is also creating a wider informal business sector that is beginning to spawn new local jobs. MTN recognises the sustainable benefits accruing to this sector through its continuous use and support of informal distribution channels.

 

 

 

 

Three main distribution dealership models have burgeoned in the region:

  • Manned public payphones: Resellers buy public phones and purchase airtime at discounted prices from MTN to enhance their profitability. Nationwide there are about 12 000 manned payphones.
  • Call boxes: MTN sets up the public call boxes and allocates them to local entrepreneurs to manage. The entrepreneur can purchase recharge vouchers at reseller tariffs and charge the customer for time spent on the phone. Country-wide, there are more than 2 400 call boxes.
  • Village phones: Through a partnership with a micro financing institution, MTN assists village entrepreneurs to purchase a phone, solar panel and signage. They can purchase recharge vouchers from MTN at reseller rates and charge customers according to time spent on the phone. There are approximately 3 300 village phones in the region.

Through MTN’s ongoing support of this informal distribution channel, small entrepreneurial distributors are becoming well-established businesses in the region. Moreover, they are no longer confining their services to telecoms access but are beginning to diversify their goods and services to cater for the wider consumer needs of their community markets.

This informal distribution sector has created more than 17 000 local jobs to date. This has closed some of the gap in delivering communication access to rural outlying areas and is beginning to empower suppliers and distributors of other consumer goods and services. This, in turn, is creating many more local jobs and entrepreneurial opportunities through the ripple effect of sustaining and growing their wider business networks.

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