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    Grow passionate promoters by dramatically improving the customer experience Actively create an environment for our people to excel and grow Put the power of the internet in people's hands Together drive operational excellence Proactively partner with our stakeholders
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What we want to achieve

What we want to achieve

The best turnaround times on all of our key customer interactions   We try measuring everything that really matters; how long it takes to answer a call, to repair a phone or deliver one. We set targets to improve in all these areas, knowing we can always do better. We’re busy taking a good look at how we can simplify and speed up the way we do things, as this will ultimately benefit our customers. Continually improving the way we do things requires ongoing innovation, which is sparked by sharing ideas and experiences across our mobile operations and also the entire Vodafone group. To drive this process, we’ve appointed a Customer Experience Managing Executive who reports to the Chief Commercial Officer. The new role is focused on getting the best turnaround times in all our customer interactions across the Group, and setting new standards and targets in all our operational excellence measures.

EStreamline, simplify and integrate our systems and processes   The power of the internet is as much of an opportunity for us as it is for our customers. We’ve identified the online channel as a strategic opportunity to drive operational excellence both in improving our customers’ interactions with us and fulfilling their needs.   We’re part of Vodafone’s Online Acceleration programme, which aims to provide a world-class online customer experience by: Meeting customer needs by creating a consistent, convenient and engaging customer experience across all online channels Developing a more effective digital marketing, distribution and service channel Driving efficiencies and cost reductions across the business through simplified and automated processes   Over time our website became far too complicated for customers to use quickly and easily, no matter what their needs may be. One of the challenges we faced was to make sure our website works on all devices, continually adapting for models being released all the time. We expect to relaunch our new website shortly. Our new online platform will integrate all our customer portals into one, serving individuals and businesses. Customers will be able to access all our services with a single login, including buying handsets, signing up for contracts, getting upgrades and accessing other value-added services. They will be able to view account information both on their phones and online, which will reduce the need to call the contact centre to get package details, balances and SIM information. Another huge benefit of being part of Vodafone is the access it gives us to their global procurement muscle. Vodafone has strategic agreements with some of the world’s leading companies to deliver innovative products and services, including Samsung, Google® and Microsoft®. Handsets, network and IT equipment are for the most part negotiated and bought centrally through the Vodafone Procurement Company (‘VPC’). We make use of these centralised benefits wherever we can but with due consideration of local procurement requirements and targets, such as those included under BBBEE in South Africa.   Besides the pricing power that comes with Vodafone’s scale, other benefits of VPC include: Access to world-class methods and standards that help us to continually improve our processes Less administration as some of our global suppliers are managed directly by VPC A stronger focus on working with our suppliers as strategic partners   Since we started our supplier performance programme, we have seen real improvements in the service we’ve had from global suppliers managed by VPC. In South Africa, 12 of our key suppliers have migrated to VPC. Our focus will be on Vodacom SA suppliers followed by those in our other countries. In line with our objective to consolidate our supplier base and optimise the procurement process, we’re planning to improve Vodacom SA’s supply chain capabilities so it can service all our operations from a central point.

Drive efficiency and reduce costs   Lower MTRs in South Africa meant a loss of R519 million in EBITDA for the year. To some extent a lower licence fee offset the loss, although this benefit had already been accounted for last year. So we needed to save some R500 million in costs to ease the impact of the lost earnings. We launched a cost efficiency programme focused on our four key cost categories. We were pleased with the results and reached our target. More than two-thirds of our total operating expenses of R40 638 million (excluding depreciation, amortisation and impairment losses) are direct expenses, so most of the savings we made were in this category. The table below discusses our cost-efficiency actions in each of the four areas and plots our performance in each case.       Background and objective   Delivery on objective   Improved contribution margin %   We aim to steadily improve our contribution margin. Our direct expenses are all variable such as customer acquisition and distribution expenses and regulatory fees. They also include interconnect expenses of R6 072 million (2010: R6 929 million).    Group direct expenses, excluding the impact of MTRs in South Africa, were up 6.7%. The Group contribution margin increased slightly to 54.9% while South Africa improved its contribution margin from 55.0% to 56.5% due to lower net contribution from interconnection and reduced customer and distribution expenses. Network savings delayed Self-provided sites   We aimed to contain other operating cost growth below revenue growth. Our other operating expenses are mainly the costs for running our network and buildings such as site rentals, maintenance, electricity and transmission. Although our total number of sites increased by 7.6%, we looked at ways to bring down average site costs.    Group other operating expenses went up 11.0%(*) to R6 928 million which was faster than revenue growth mainly due to Gateway. Cost savings came from ongoing plans to provide our own transmission, although not to the extent we’d hoped. Transmission expenses growth remained high because of the strong growth in data traffic.  Group headcount reduced Headcount/%   We aimed to keep our headcount stable, except where we needed to invest in resourcing growth areas like Vodacom Business and Vodacom M-Pesa.    We brought down our headcount from 7 643 to 7 481. This was from natural attrition and outsourcing some activities, like network management in Tanzania. Group staff expenses remained stable at 6.6% of revenue. This was a good result given wage inflation.  Reduced sponsorship exposure   We set a target of reducing our publicity expenses as a percentage of revenue. Our publicity expenses include sponsorships and advertising. We also aimed to rebalance our spending away from sponsorships to raising awareness of our different value promotions.    On the face of it, our publicity expenses as a percentage of revenue went up from 3.2% to 3.4%. But if the once-off brand refresh expenses are excluded we achieved our objective of slightly reducing publicity expenses as a percentage of revenue from 3.2% to 3.0%, mainly by reducing some sponsorship properties.

Minimise our environmental impact   We understand that any reduction in our carbon footprint has an overall positive effect on the environment. It also helps us save on operating expenses as we continually look for newer technologies and more efficient processes. One of the best ways we can contribute to protecting the environment is to work with our stakeholders, such as customers and suppliers, to help them reduce their own carbon footprint. Through machine-to-machine (‘M2M’) connections, our business customers can drastically improve their efficiency and cut CO2 emissions. vodafone.com/sustainability for Vodafone’s Carbon Connection report, which looks at the role of mobile in tackling climate change. For our initiatives to enable businesses and consumers to transition to low carbon ways of operating, working and living.   Measuring our footprint We took part in the Carbon Disclosure Project (‘CDP’) for the first time in 2010. Although our submission was a challenge given the limited measurement of electricity and fuel consumption in some of our countries, we were ranked 6th out of the top 100 JSE-listed companies for our disclosure in 2010. We are busy collecting data for the 2011 CDP, which we expect to have finalised in July 2011. Our goal in 2012 is to put mechanisms in place to reliably measure electricity consumption in all buildings and network sites possible. Complete and reliable data will allow us to measure the energy savings realised from our various initiatives against our targets.   The Greenhouse Gas (‘GHG’) Protocol defines three scopes of emissions:   Scope 1   Scope 2   Scope 3 Direct GHG emissions are those from sources that are owned or controlled by the company. For example, emissions from combustion in owned or controlled boilers, furnaces and vehicles.    GHG emissions from the generation of purchased electricity by the company.    An optional reporting category that allows for the treatment of all other indirect emissions. They are a consequence of the activities of the company, but occur from sources not owned or controlled by the company such as business travel.    In South Africa, Tanzania and Mozambique, we are increasing the number of sites where we measure our energy consumption. In South Africa we have energy meters at 2 200 base stations and plan on installing more this year. Where consumption is not metered, we use billing information to come up with an estimate.     Year ended 31 March   2011   2010   2009             Network electricity (GWh)(#) 195.8   154.2   188.6 Building electricity (GWh)(#) 101.8   118.9   80.6 Fuel (diesel and petrol) (million litres)(#) 2.1   2.5   2.2 CO2 emissions (tonnes CO2)1(#) n/a   n/m   328 394 Note: 1. Not available at time of print, will be made available on the sustainability section on vodacom.com in July 2011.   The increase in network electricity is due to the substantial increase in network capacity, from the addition of 948(#) more 3G base stations as well as an increase in the number of sites. Once the RAN swap is concluded we expect to realise savings. Our mobile networks span five sub-Saharan countries as well as urban and rural areas. Our networks require energy to operate and we produce electronic waste when we maintain and upgrade them. Electronic waste also results from the sale of hundreds of thousands of new mobile handsets each year, particularly in South Africa.   Reducing our carbon footprint We set ourselves the goal of reducing our Scope 1 and 2 emissions of 366 369 tonnes of CO2 emissions at 31 March 2009 by an estimated 73 000 tonnes, or about 20% by 31 March 2013 (assuming no growth in number of sites). We aim to do this by investing in new technologies, free cooling, and using alternative energy sources such as generator-battery power hybrid units, and wind and solar generation for remote base station sites. We are part of the Vodafone Green Energy trial, which is a three-year strategic roadmap aimed at significantly reducing fossil fuel and electricity consumption. The plan aims to save costs and lower CO2 emissions related to network infrastructure. Based on these trials, we calculated we can realise up to 70% savings in energy consumption at 3G base stations, and 40% at 2G base stations. We’re proud to say that we’re deploying the technologies that we and our suppliers have developed. It is now possible to build a site powered by renewable energy that makes economic sense. This allows us to service undeveloped areas not on the electricity grid, with the bare minimum environmental footprint.   Investment in new technologies We are running two networks in parallel in all our countries (except DRC) – 2G and 3G networks. Single RAN solutions, which integrate 2G, 3G and LTE technologies, deliver further efficiency gains. We have started with the RAN swap process in South Africa, Tanzania, DRC and Lesotho, to upgrade our networks and replace them with more cost and energy-efficient components. In South Africa a third our network has been upgraded and we plan to complete this over the next two to three years. The annualised electricity savings from the base station sites already swapped is 33 GWh.   Free cooling Free cooling means that we upgrade our network components to withstand higher temperatures and install individual battery coolers rather than cooling the whole facility. In South Africa, almost a third of our sites make use of free cooling, which has resulted in annualised energy savings of an estimated 11 GWh. In 2012 we plan to implement free cooling at another 1 000 sites.   Alternative energy sources Diesel is used in powering some of our base stations. This is mostly in our International operations, where base stations are often not connected to the national grid, or where diesel is used for providing backup power. Converting to generator-battery hybrid power units can help us reduce diesel consumption. Intelligent controls monitor and control power from the electricity grid, batteries and generator by utilising the most effective source available. In South Africa, all off grid generators are being converted to hybrid systems to reduce fuel consumption and extend the generator life by as much as four times. Alternative energy sources have been more widely used in our International operations, but we have started rolling this out in South Africa to boost energy savings. We now have 13 of these units and are planning to roll out at least another 100 in the next year. We have looked at reducing diesel consumption even further by adding wind power to our hybrid sites. We have a pilot site in South Africa and if it proves effective we will roll it out to more sites this year. These will all be in coastal areas where there is enough wind. We are also looking at solar-powered base stations in rural areas where the sites are off the national grid. Solar panel theft remains a challenge though, so we only have three of them in place at the moment. We also make use of fuel cells (using either pure hydrogen or methanol-water) as alternative energy sources for our base stations. We have 90(#) sites using pure hydrogen fuel cells instead of generators for backup power, and are using methanol-water fuel cells at two sites.   Infrastructure sharing Wherever possible we share our network sites with other operators, which helps to reduce our CO2 emissions and operating expenses. It also eases pressure on planning authorities as they need to do fewer site reviews. We’ve reviewed network sharing opportunities in all our markets. We share more than half of our sites with other network operators in South Africa. Most of these are passive sharing agreements where we share sites and infrastructure but not network equipment. In South Africa and Tanzania we share our networks with other operators under roaming agreements.   Making our buildings and operations greener Buildings account for 43.3% of our total CO2 emissions (based on our 2010 CDP calculations for Scope 2 emissions). We are a registered member of the Green Building Council of South Africa and we’ve started making our buildings more energy-efficient, fitting automatic switches that turn off lights and air conditioners outside working hours. We also use sensors that switch off lights when a room is vacant for a set time and energy-efficient light bulbs. Our head office makes use of sunlight deflection to stay cool. We also aim to reduce our consumption of water and paper. Last year we reduced the number of water ponds on our campuses and eliminated the fountain sprays, reducing our water usage. The increase in water consumption this year is largely as a result of improved measurement. We encourage greater use of video and audio conferencing to reduce our CO2 emissions from travelling. For information on ebilling. Our network makes up the biggest portion of our environmental impact, and is therefore the focus of our energy saving initiatives. But we realise that small changes in buildings and operations can have a positive effect that over time makes a big difference.      Year ended 31 March   2011   2010   2009             Water per employee (kl)(#) 47.2   39.2   43.0 Water total (kl)(#) 250 903   209 576   216 721 Paper per employee (avg kg)(#) 26.0   39.6   34.6 Paper (kg)(#) 138 260   211 797   174 497   Working with suppliers We’re working with suppliers to develop innovative alternative energy solutions, such as sites that run on a combination of battery and renewable power, and low-energy ‘no frills’ base stations for use in rural areas. We’re working with Vodafone to create the Vodafone Site Solution Innovation Centre in South Africa where our technology teams will work with external partners. We plan to open the centre in time for the COP 17 UN Climate Conference in Durban in November 2011.   E-waste Handset recycling and managing e-waste from our networks is challenging in some of our markets, which lack facilities for recycling and responsible disposal of e-waste. During the year Vodafone commissioned research to assess the systems for managing network waste in Ghana, India, Mozambique and South Africa, to explore how they can assist in building recycling capacity in these regions. We are committed to reuse or recycle as much of the waste from our network operations as is practical. We aim to dispose of e-waste in an environmentally responsible manner by using accredited suppliers. They collect and dispose of our IT equipment, base station waste, old handsets and accessories, and old batteries. Data on our network waste is sourced from network contractors, suppliers and service providers. We obtain safe disposal certificates and our Health, Safety and Environment department audits our suppliers to make sure waste is not dumped illegally. In South Africa the amount of network waste we recycled in 2011 increased to 609 tonnes, compared to 208 tonnes the year before. This was mainly as a result of the RAN swap where old equipment is no longer used in other parts of the network but rather disposed of. Our Vodacom Repair outlets (previously Vodacare) and our accredited recycling agency deal with recycling and scrapping of old handsets. For more information on handset recycling. Compliance with environmental laws In the past we have made use of external service providers to perform environmental audits. This compliance evaluation will now form part of our Group Internal Audit responsibility. Due to this transition, we didn’t have an environmental compliance audit in the year. South Africa and Tanzania are ISO 14001 certified.