Materiality summary

Leading the top half of the materiality table are customer issues:

• Quality and dependability of service for network operators
• Protection against harmful content or abuse of content for media houses
• Customer satisfaction and fair treatment of customers, especially for network operators
• Equitable access to products and services (see #datamustfall campaign)
• Consumer ID protection and data privacy, especially for consumer facing telcos and media houses

Governance issues, including board balance and effectiveness, leadership selection and preparation, and remuneration and incentives are all critical for companies exposed to key-man risk at leadership level. External societal risks of doing business in Africa and anti-competitive behaviour for dominant companies attracting the attention of regulators complete the top half of the materiality table.

Results

Scores for maturity of management in the TMT sector poor in comparison with Mining and Hospitals, but considerably better than Food, Pharma, Retail and Property. The best scoring companies were those with the best reporting on customer issues (suitability, treatment, access and abuse of data) and societal issues (security of data and management of government intrusion). Vodacom scored significantly better than MTN and Telkom, which both scored poorly for their response to customer issues, with Telkom also scoring poorly for protection of its infrastructure. MTN scored dramatically better than in 2015/16 on account of decisive leadership tackling MTN’s difficulties with regulators head on and showing evidence of improved government relations, though not across all markets. NPN, 700 and BLU all aggressively accumulating customer data as a driver of long-term value, but with varying degrees of responsibility in terms of how they report on their management of sensitive customer information. See the executive summary for individual company scores and materiality weightings. Buy our full report for detailed analysis and substantiation of our analysis.