MTN SA: SMMEs Portfolio Committee Briefing. 15 August 2018
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1 MTN SA: SMMEs Portfolio Committee Briefing 15 August 2018
2 Store Breakdown MTN Branded Stores Airtime / Distribution No. of B-BBEE Distributors 119 No. of B-BBEE Distributors 149 Airtime Sales value R2.1bn Airtime Sales value R2.2bn YoY Sales Growth% 8% Incremental B-BBEE Distributors (2016 vs. 2017) 30 2
3 MTN Transformation Strategy Drivers OPPORTUNITY Reduce number of stores owned and operated by MTN by 70% Upto 70% of MTN Owned Stores in next 3 years New store ownership reserved for Black Owners Up to 100% of all new stores Establish ESD Programme to support Black Owners to invest in Store Ownership Opportunity to assist current white dealers transform their businesses to be BBBEE compliant Enabler for Black Owned Store Ownership as per above/below Remaining white owned stores to improve empowerment/transformation
4 Improvement over the past three Years TOTAL MEASURED PROCUREMENT SPEND (ZAR) YoY PREFERENTIAL PROCUREMENT SPEND SPEND / 2015 Increase # VENDORS SPEND # VENDORS SPEND # VENDORS SPEND Black Owned Vendors (BO) > 51% R 2.0bn 94 R 3.0bn 109 R 4.2bn 158 Black Women Owned Vendors (BWO) > 30% R 3.5bn 44 R 8.1bn 57 R 9.8bn 170 Exempted Micro Enterprises (EME) < R10m R 148m 42 R 286m 51 R 213m 97 Qualifying Small Enterprises (QSE) < R 50m R 1.0bn 120 R 1.0bn 102 R 1.6bn 152 Designated Groups R 0.00 R 0.00 R 52.7m 110% * % *2.8 44% * % *1.6 4
5 Further Transformation Spend through FTK/MS to Empowered Partners PROCUREMENT PASS THROUGH SPEND 2017 (ZAR) 2017 PASS THROUGH SPEND Spend # No of Suppliers Black Women Owned Vendors (BWO) > 30% 670m 120 Black Owned Vendors (BO) > 51% 1,0bn 167 Exempted Micro Enterprises (EME) < R10m Qualifying Small Enterprises (QSE) < R 50m 231m m 92 On Full Turnkey / Managed Services, a minimum SMME participation is agreed with the awarded bidder. E.g. Single Vendor Managed Service (SVMS) during contract term (on a tiered basis) up to 30% of the SVMS Tender to be subcontracted to >51% Black Owned EME s, QSE s and Designated groups 30% of such subcontractors are at least >30% black women owned 40% of such subcontractors are at least >51% black owned 5
6 Improvement over the past three Years IT Infrastructure Services IT Services Network Deployment FUNCTIONAL AREA Technology Enterprise Services Transmission Hardware, Storage Management Applications, Architecture, PMO ACTIVITIES Data Centre Management, HVAC, Network Build, Energy Management, Project Management Fibre Rollout, Field Services, DCIM Microwave, RAN, CORE Up to 30% for certain Technology Spend categories set side for EME s and QSE s (directly contracted) Drive inclusion of EME, QSE, BO enterprises into the MTN SA supply chain by actively engaging the industry & onboard them. Aim to aggressively increase the % of spend with BO/SMME 6
7 Tender Evaluation Criteria EVALUATION CRITERIA Evaluation Criteria Initial Weighting Revised Weighting Foundation Technical Financial Due Diligence B-BBEE Safety Health & Environment (SHE) Quality Management Total Cost of Ownership Standard Terms & Conditions Total Evaluation Criteria We aim to revise the B-BBEE weighting on the Tender Evaluation criteria from 20% to 30%. A minimum B-BBEE entry requirement to be set at level 4 Contributor status Further the B-BBEE evaluation criteria is set-up so as to benefit SMMEs, Black Owned, Black Women Owned and Designated Groups entities. 80% of the overall B-BBEE scoring is directly related to promote Black Owned, Black Women Owned, Designated Groups and SMME participation within both value and supply chains. 7
8 Our Capacity Building Approach Pillars Supplier Development Skills Development Job Creation Localisation Focus Groups Black Owned Black Women Owned EME / QSE Designated Groups Evaluation MTN s B-BBEE evaluation criteria is set-up so as to benefit SMMEs, Black Owned and Black Women Owned entities (80% of the overall B-BBEE scoring is directly related to this). Virtual ESD Programmes & Physical Incubation Mentoring and Coaching MTN Foundation ESD Initiatives Y.E.S Pledge a 1000 Entrepreneurial opportunities for Youth MTN Zoner s (Micro- Entrepreneursh ip) Early Payment for SMMEs within 15 days avg Black SMME Upfront Payments SMME Fund 8
9 Entrepreneurship Programmes Supported in the past 5 Years Entrepreneurship in Schools Student for the Advancement of Global Entrepreneurs (SAGE) programme: o 60 high schools learners from the FS completed the programme PrimeStars Media Step Up to Start Up entrepreneurship project: o Some learners from 108 public schools participated in the project nationally R7,918,800 Entrepreneurship in Universities in partnership with Enactus 28 Universities participated in the Each Year University of Venda won the national competition and participated in the ENACTUS 2017 World Cup finals hosted in London (UK) in 2016 University of Johannesburg represented Toronto Canada Entrepreneurship skills development for SMMES The programme offers a 12-month business development and mentoring to SMME's in Gauteng and Free State from disadvantaged communities. 212 entrepreneurs completed and graduated from the programme R10,067,610 R19,281,200 TOTAL EXPENDITURE OVER THE PAST 5 YEARS R37,267,610 9
10 SMMEs Support as Implementing partners of the Foundation Projects School Connectivity related Projects using SMMEs (see below sample suppliers) in regions and national to connect ICT in Schools. The SMMEs assisted in the roll-out of the school connectivity projects which entails preparation of the classroom and installation of the multimedia centres, maintenance and support, and the teacher training programme that seeks to ensure optimal utilization of the multimedia centre: R125,264,630 > Themolo Business Enterprise > Una Technologies > Digiton Intergrated Systems > Brainet Technologies Event Management related Services where SMMEs (see below sample suppliers) where empowered to host and manage the event, these SMMEs are based in regions where community interventions are implemented: R25,361,363 > MOD Events > Intsika Business Consultants > Big Buoys Media Consultants > Lumore Supply and Projects > Ivy Functions and Projects > Xingwili Trading > Vinyl Entertainment > Merle Falken Inclusive Total SMMEs Expenditure Incurred in Project Implementation R150,625,993 10
11 Connectivity Programmes
12 Thank you
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