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Axiata Group Berhad | Annual Report 2016
MANAGEMENT DISCUSSION & ANALYSIS
034
REGULATORY & LEGAL
In 2016, the Group faced several regulatory opportunities and risks ranging from spectrum allocations, the development of new regulations including the
wholesale modernisation of regulatory frameworks, increased levels of taxes, as well as regulatory measures addressing sustainability concerns on over-
competition in a few markets and an uneven playing field with OTT service operators.
In 2015, the Group had implemented the Axiata Regulatory Compliance Framework as an integral part of the Corporate Governance Framework which
provides the Board oversight of Axiata's regulatory compliance performance. Its objective is to set baseline expectations in all OpCos in relation to Regulatory
Compliance. It also assists the Group to manage exposure to unacceptable compliance risks, and ensure compliance with regulatory authorities.
Axiata's approach has been to actively engage with national regulatory authorities and policymakers on key regulatory topics and encourage the development
of national-level policies and regulations based on global best practice. The Group's stance on key issues defining the telco regulatory landscape include the
maximisation of spectrum allocations to ensure efficient use; the rationalisation of regulatory fees and charges including sector specific taxation policies to
promote long-term economic growth; and developing suitable regulations to address a more level playing field between traditional telco operators and OTT
service operators.
Axiata also encourages policy makers to consider the long-term sustainability of the sector by allowing more flexible network and spectrum sharing rules,
as well as address emerging regulatory topics such as digital financial services, Data Privacy and Trust, and Digital Identity, all which are building blocks for a
vibrant digital economy.
CUSTOMER PRIVACY, DATA PROTECTION & CYBERSECURITY
Axiata’s Group-wide customer privacy, data protection and cybersecurity policy is based on four fundamental pillars namely:
•
Personal Data Security
•
Personal Data Privacy
•
National Surveillance/Support for Law Enforcement
•
Information Technology (IT)
In 2016, Axiata reinforced its commitment to upholding privacy and security across the Group by drafting of a Group Privacy Framework which will be
developed across all OpCos over the next two years.
Increased digitalisation has brought on a greater threat of security breaches from online transactions and mobile connections which may result in the
loss or compromise of sensitive information or interruption of services. Mindful of the risks and its repercussions, in 2016 the Group established a Cyber
Security Steering Committee which focuses on the implementation of cybersecurity initiatives to minimise the risk of security breaches. In addition, Axiata
also established the Cyber Security Operations Center (CSOC) across the majority of its OpCos to improve incident monitoring capability of cybersecurity
breaches.
For complete details of our customer privacy, data protection and cybersecurity policy and initiatives, please refer to our Commitment to Customer Privacy,
Data Protection and Cybersecurity on page 108 of this Annual Report.
ECONOMIC, ENVIRONMENTAL AND SOCIAL SUSTAINABILITY
Axiata's Economic, Environmental and Social (EES) Sustainability measures and initiatives is underpinned by the Group's Sustainability Pillars, namely Beyond
Short Term Profits, Nurturing People, Process Excellence and Governance, and Planet and Society.
In 2016, the Group continued to contribute to the national development of its countries of operation. Axiata's regional capex and opex spend is now USD46.5
billion
1
in eight countries for a period of five years, while GDP contributions are USD68.2 billion
2
in eight countries over five years. Throughout Axiata's
footprint, the Group has provided direct and indirect employment to over 1.2 million people.
The Axiata Digital Innovation Fund (ADIF), one of the most active Malaysian venture capital funds, continues to support and catalyse the growth of digital
entrepreneurs. ADIF has invested in 12 digital companies to date, helping start-ups expand their business and product reach into the regional digital services
marketplace. In 2016, a total of 50% of ADIF’s investments were in Bumiputera companies, and through its investments, has created 918 jobs. Axiata was also
recently launched ADIF in Cambodia in 2017.
The Axiata Young Talent Programme, Axiata's flagship corporate social responsibility programme with a commitment of RM100 million over ten years, has
contributed towards the leadership development of 1,129 talented young individuals since the programme’s inception in 2011.
The Group's commitment to advancing gender equality is evident through the increase in the number of women employed within its 25,000 employee base
across the region. Women comprise 30% of Axiata's total workforce, of whom 16% are in senior management positions.
For complete details of our EES initiatives and outcomes, please refer to our standalone Sustainability and National Contribution Report 2016.
2016 IN REVIEW: GOVERNANCE, COMPLIANCE & EES
1&2
Capex and opex spend, and GDP contributions covers seven countries of operation till 2015 excluding Nepal. 2016 figures include Nepal, bringing the total to eight countries.