Vodacom chairman reflects on Eskom, YeboYethu, Please Call Me
Vodacom chairman Jabulani Moleketi has candidly critiqued South Africa’s sluggish economy in his annual statement, saying this has significantly dented business, investor and consumer confidence.
The statement, which is in the company’s Integrated Report for the year ended May 31, he cited power utility Eskom’s unprecedented spate of load-shedding in the past few months as a cause of the unfavourable environment in which business operated.
Moleketi said the serious power outages harmed the national economy and posed particular challenges for Vodacom’s network and was a sobering reminder of some of the hurdles that lie ahead.
Africa’s most advanced economy experienced the most severe power cuts in more than a decade. The situation worsened in March after Eskom lost its imports from Cahora Bassa hydroelectric system in Mozambique, which contributes 1 000MW to the South African grid, after a powerful cyclone, Idai.
The situation had become so unbearable that Eskom was threatened with a class-action suit by a law firm that called on businesses that suffered losses due to power cuts to join the legal steps against the power utility.
Moleketi noted: “While we have seen some encouraging developments at a political and policy level, with government’s stated commitment to tackle corruption and stimulate investment, the country still faces some deep challenges.”
He was, however, optimistic the recent national poll will provide sufficient mandate to drive the necessary changes to restore business and investor confidence.
The Vodacom chairman highlighted his company’s R16.4 billion black economic empowerment (BEE) transaction, the largest such deal to date in the telecommunications sector, as evidence of the telco’s commitment to driving transformation in SA.
Moleketi said: “The deal generated significant value for YeboYethu shareholders through a special dividend payment, as well as providing holders with the opportunity to remain invested in the full Vodacom Group, allowing exposure to the benefits of the group’s international operations and a stake in Safaricom.”
The YeboYethu transaction benefitted a significant number of black investors and close to 8 500 current and past employees.
The deal structure involved the coming together of the combined interests of Vodacom’s existing BEE partners (Royal Bafokeng Holdings, Thebe Investment Corporation and YeboYethu) with a newly formed employee stock ownership plan.
Moleketi said: “The transaction contributed to Vodacom South Africa successfully achieving level one BEE status, up from level three last year, and reflects Vodacom’s long-standing recognised leadership in promoting employment equity, supplier and skills development, retail transformation, and social investment.”
He also told shareholders that his board had been monitoring developments around the controversial “Please Call Me” matter as it had subjected Vodacom to some negative press and social media attention.
A public protest was also held outside Vodacom’s head office over a long-standing litigation process with a former employee, Nkosana Makate, who has been credited with the invention.