VODACOM’S

PRESENTATION

TO THE

PARLIAMENTARY PORTFOLIO COMMITTEE

CONSUMER ISSUES5 NOVEMBER 2002

INTRODUCTION

Vodacom thanks Parliament The CONSUMER is the most

important part of our business!

OUTLINE

Customer Focus Critical success factors

Network - Coverage, Capacity and Quality

Products and Tariffs Customer Care

CUSTOMER FOCUS

LICENCE REQUIREMENTS:Network - Coverage, Capacity, QualityProducts and TariffsCustomer Care

Vodacom has met all requirementsand

Reports to ICASA bi-annually

CUSTOMER FOCUS

Vodacom is also committed to democratise telecommunications in South Africa!

CUSTOMER FOCUS

Democratisation is succeeding 12 million cellular subscribers in only 8

years Gross Connections per annum exceed 3m Vodacom subscriber base – 7,3m

customers 100m min/month Community Services

Vodacom Subscriber Growth from Sept 2000 to Sept 2002

3,900,000

4,300,000

4,700,000

5,100,000

5,500,000

5,900,000

6,300,000

6,700,000

7,100,000

7,500,000

Month

Num

ber

of S

ubsc

riber

s

Cell C Market entry

NETWORK

Coverage, Capacity and Quality

NETWORK Technical Licence Requirements

 LICENCE REQUIREMENT

VODACOM ACTUAL PERFORMANCE

Geographical Coverage

No percentage specified

64,6% of RSA

Population Coverage

70% of population by 1998

94% of population currently

Service Availability

95% Service Availability in 90% of actual area of coverage

99,5% Service Availability in 100% of coverage area

Grade of Service

Best endeavours 2% Grade of Service

Average Grade of Service over a month period <0,5%

NETWORK Factors affecting Quality of Service

• Currently the primary factors affecting quality of service are:

• Non-availability of 1800MHz spectrum

• Delays due to environmental impact assessment

and local authority approval (up to 3 years)

• Handsets

• Jamming Devices

• Transmission Failures

NETWORK 1800MHz Spectrum

• 1994 - 11 MHz 900 Mhz spectrum for

250 000 customers

• 2002 - still 11 MHz for 7,3 m customers–Plus Cell C Roaming traffic

NETWORK 1800MHz Spectrum

• 1800 Spectrum benefits

• Capacity and Quality of service in high traffic

areas will improve dramatically in the most cost

effective way

• Interference between cells will decrease,

dropped calls and call set-up failure will reduce

Original Original networknetwork

More More spectrumspectrum

More More cellscells

•• Capacity Capacity

•• Interference =Interference =

•• Cost Cost

•• Capacity Capacity

•• Interference Interference

•• Cost Cost

GSM 900GSM 900 GSM 900GSM 900 & & GSM 1800GSM 1800

?

NETWORK QUALITY TRADE-OFFS

NETWORK Handsets

• Rapid evolution of technology –pros and cons

• Vodacom Licence : ensure that only GSM handsets are connected

• Vodacom has heavily invested in testing equipment

• Only endorse phones that perform up to standard

NETWORK Handsets

• Phone performance varies from model to model, e.g. Some phone have very directional antennas which result in poorer RF performance

• Phone performance degrades with age and (ab)use, eg dropping phone

• Almost half of calls drops as a result of Handset problems / damage

NETWORK Handsets

• Grey phones are still filtering into RSA

• Vodacom recommend ‘scientific’ type approval by ICASA

• Type approval standards of GSM Certification Forum should be recognised

NETWORK Jamming Devices

Jamming prevents the use of cellphones in certain areas.

Transmit noise signals that interfere with the ability of cellphones to receive signals from mobile base stations.

Jamming is an illegal practice

Vodacom continuously improve an already high standard of service by extensive capital investment

in network

Net Profit After Tax vs Capex Additions

-

500

1,000

1,500

2,000

2,500

3,000

1998 1999 2000 2001 2002 2003

R'M

il

Profit After Tax Capex Additions

NETWORK Conclusion

Finally, Vodacom compares favourably with the best in the world

COMPARISON OF PERFORMANCE

PRODUCTS AND TARIFFS

PRODUCTS AND TARIFFS

CUSTOMERS ARE PROTECTED!Cellular tariffs are regulatedTariffs are lodged with ICASA

New tariffs Tariff increases Vodacom may not increase any tariff plan

by an amount greater than the % year on year increase in the CPI.

PRODUCTS AND TARIFFS

Vodacom has not fully utilised its right to increase by CPI E.g. Vodago pre-paid was launched in Nov 1996 @ R2.75 per minute

at all times Only peak tariff increased once to R2.85 per minute, whilst the off-

peak tariff was reduced by 44% to R1.55 per minute CPI increases would have been R4.11 per minute peak and off-

peak!!!

Twenty-one tariff plans designed to meet every need of the customer

Contract and Pre-paid tariff plans

A Contract Package without any monthly subscription – pay for usage only

Incoming call only tariff plan

High, Medium and Low usage tariff plans (bundled minutes)

Per minute or per second tariff plans

Freechange between pre-paid tariff plans once every 30 days

Tariff plans for specific usage preference - voice, sms or data

Tariff plans depending on peak or off-peak usage

Migration between contract tariff plans

Smartstep

Vodago

Frequent S

Frequent

BusinessBusiness S Talk 500 S

Talk 1000 STalk 120

Talk 100 S

Talk 200 S

Talk 240

Weekender

Weekender S

Family S

Messenger

4U Contract

4U Prepaid

Customers across all tariff PlansCustomers across all tariff Plans

PRODUCTS AND TARIFFS

VODACOM’s COMMUNITY SERVICE Original licence bid approved 99c/min Outgoing calls less than 70c/min for 8 years despite CPI

increase of more than 50%. 100 million outgoing minutes p/month Only 22 000 phones More minutes than of total 6 million pre-paid customers

CUSTOMER CARE

CUSTOMER CARE

Vodacom’s licence provides for:

Publication of a “Code of Practice for Consumer Affairs and Guidelines and Procedures for Enquiries and Complaints” (see information pack for copy)

Bi-annual report on Customer Care statistics submitted to ICASA

CUSTOMER CARE

Customer Care is a Vodacom priority!

365 days a year; 24 hours a day4 state-of-the-art Call Centres 50+ different integrated systems One-stop solution: integration of Customer Care of Vodacom Network & Service Provider Co.1,000 full time staff

CUSTOMER CARE

Customer Care staff are:

Recruited according to country’s demographics, incl. physically disabled

Extensively trainedContinuously measuredRewarded in terms of incentive bonus scheme

CUSTOMER CARE

Quality of Service Matters:

Recording all call interactions

Evaluate 9700 calls monthly

CUSTOMER CARE

Sensitive to Customer’s needs:

Call agent interaction in Zulu, Xhosa, Sotho, English, AfrikaansListen to and implement Customer suggestions

CUSTOMER CARE

Walk-In Customer Care Centre

Open 7 days a week!

Vodacom strives for excellence and will continually

improve its Customer Care

Our commitment to the Customer

THANK YOU