Enterprise development

Developing small black-owned businesses stimulates the economic participation of South Africa’s previously disadvantaged communities. Code 600 of the dti CoGP requires monetary or non-monetary contributions to be made in order to contribute to the development, or sustainable independence, of black-empowered businesses.

Vodacom SA’s target contribution for Enterprise Development is calculated based on cumulative net profit after tax (NPAT) over a five-year period, commencing from the date of implementation of BBBEE (February 2007) and equates to R732 million. Between the start of 2006/7 and end financial year 2008/9, we contributed R778.1 million to the Community Services Telephone Operators (CSTO), with a R292.2 million contribution for the year under review (a total of R1.07 billion). This represents an overspend of R338 million against the cumulative target, giving the company a score of 15 out of 15. In addition, we also spent R1.3 billion on other enterprise development initiatives in the year under review, i.e. start-up support, training and marketing for Vodashops and community service telephone operators (CSTOs).

Community services

The CSTO service was initiated when Vodacom SA was first granted its mobile telecommunications licence in the early 1990s. One of the conditions was for the company to deploy 22 000 subsidised public mobile telephones in under-serviced and rural areas. CSTOs were established in converted shipping containers and earned – and continue to earn – a 50% margin on community services airtime sales.

There are now over 133 000 community services telephones operating through containers and retail outlets, such as rural and peri-urban spaza shops.

CSTOs in SA

The next step, already initiated, is to offer community services entrepreneurs a wider range of products to sell to their customers, including airtime, starter packs and even internet access. We also now offer a choice of four more affordable brands of phone to the CSTO, ranging in cost between R800 and R1 800 per unit, thereby giving them more choice and flexibility. This will allow the micro-entrepreneur to progress from a subsistence level operation towards a more profitable and formal enterprise. Moving forward, key growth areas envisaged are in data and M-Pesa.

Retail franchisees

Since 2000, the South African Vodashop model has changed to require that all new franchisees would be at least 51% black owned, and all existing shop owners who wish to acquire a new shop now have to take on a black partner. This has resulted in the Vodashop franchise model becoming an ideal vehicle for transformation, with 57% now 100% black owned, 1.6% now 50% black owned and 2.3% now 25% black owned. Vodacom SA aims for 5% growth in this area per year. These stores receive support in a variety of forms, including training, rental support, shopfitting and advertising.

Wireless Application Service Providers (WASP)

Although the WASP market presents a world of opportunities for BBBEE entrepreneurs, uptake in this growth area in the South African market has been very slow. The key reasons identified to explain this are finances and technological know-how. The current solution for the latter is for new BBBEE WASPs to use aggregators (such as the Vodacom Internal WASP) who have the technological know-how and offer support by delivering the technological services for them. Once they have gained experience, the BBBEE WASPs can begin to offer these services themselves. Vodacom SA also offers BBBEE WASPs special deals to assist them in their marketing efforts.

During the 2009/10 financial year, the number of black-owned WASPs grew to 18 out of a total of 155 on the South African network, a 12% growth rate. Six of these are connected directly to the network and 12 are connected through the Vodacom Internal WASP platform. Vodacom SA is aiming for a growth rate of 15% for 2010/11.

Qualifying small enterprises and emerging micro-enterprises

In addition to providing workshops for qualifying small enterprises (QSE) on BBBEE requirements, we have developed a trade curriculum consisting of five levels (23 modules) covering product, data and soft skills training. We offer instructor-led training, in-store e-Learning as well as mobile learning, and have delivered in excess of
57 000 interventions for the financial year under review, largely on popular demand from QSEs who have voiced their appreciation for the value of this training. We have also invested in upgrading our learner management system so that QSEs can view and track their staff training records or progress.