Socio-economic contribution

Social activity is an important component of corporate social responsibility of the business and one of the key indicators of sustainable development of Kazakhtelecom JSC.

In 2021, Kazakhtelecom continued to improve its approach to the system of managing relations with local communities and external communications at various corporate levels. In order to further develop this practice, a dedicated unit was created that oversees sustainability issues and is responsible for interaction with local communities on project implementation issues.

The Company's relations with local communities are governed by the provisions of the Corporate Governance Code and international standards, such as the UN Sustainable Development Goals, the Global Reporting Initiative (GRI), IFC and EBRD Environmental and Social Standards, the UN Principles of Responsible Investment, etc.

In 2021, key changes were introduced to Kazakhtelecom JSC's policy on managing the full cycle of investment activity in the following areas:

Kazakhtelecom JSC recognizes its responsibility and strives to ensure that the investments made contribute to the development of the production and economic base in the regions of presence, conservation of the natural environment and the exercise of the right to work. The Company supports national economic development programs that include elements of environmental, social and governance principles and sustainability plans.

As part of the social aspect of sustainable development, Kazakhtelecom JSC focuses on improving the quality of life of the population in places of presence through social and educational programs, transparency of operations, and reducing the negative impact on the environment.

Kazakhtelecom JSC takes a responsible approach to conducting efficient and profitable business, and acknowledges the importance of its participation in the sustainable development of its regions of presence. The Company contributes through its core activities and socio-economic investments in the regions of presence.

The Company operates in all regions of Kazakhstan and is a major employer and taxpayer. The Company's contribution to the local and national economy and local communities is expressed in:

By implementing the Development Strategy and continuing to make regular contributions to local labor markets, Kazakhtelecom JSC brings significant economic benefits to local communities. Thus, direct economic value is created from the Company's core activity, which generates income. The economic value created is distributed through the payment of wages, dividends, taxes and other payments to the state, the purchase of goods and services, and voluntary social investments.

In cooperation with Kazakhtelecom, Qlang, an online school in Kazakhstan, continued its work on a social project on free English language training for children of medical professionals on the front line for the treatment of coronavirus patients, which was launched in 2020. All the children of Kazakhstani healthcare professionals who wish to take a free English course online on the platform www.med.qlang.kz.

The Qlang Online School courses involve both self-study of interactive tasks on the platform at any time convenient for the child, and sessions with experienced and qualified teachers with the most appropriate schedule for each child. It is also possible to practice communication in English in a conversational online club, and after completing the course obtain a certificate of completion from Qlang online school.

Kazakhtelecom JSC was not only a technical partner of the project, but also committed to paying for the work of the teachers who will provide online training for the children.

EQoldau is an effective tool in the fight against "digital disparity".

The Ministry of Digital Development, Innovations and Aerospace Industry of the Republic of Kazakhstan, together with Kazakhtelecom, is creating a network of open points in rural settlements.

EQoldau is a device similar to a payment acceptance device, but in fact it is a full-fledged computer equipped with a touchscreen display, screen key, printer and sound device.

With its help, the Selskers will be able to:

In addition to the aforementioned services, the eQoldau may distribute a Wi-Fi signal, so the rural people can easily connect to and use the Internet on their phones.

The creation of the eQoldau became possible after the completion last year of Kazakhtelecom's JSC largest project on the construction of FOCL SNP.

Kazakhtelecom JSC takes care of the socio-economic development of the regions of presence and the state as a whole, recognizing that their high development rates are one of the key factors contributing to the achievement of the Company's goals in the area of sustainable development in the long term. In its regions of presence, the Company strives to achieve and maintain the status of the best employer and the best partner, both in its business activity and in cooperation with government and management bodies, educational, non-profit and public institutions, corporate clients, consumers and society as a whole.

Kazakhtelecom's activities in this area include:

Kazakhtelecom JSC updated and approved by the Board of Directors the Policy of the Group of Companies of Kazakhtelecom JSC on managing the full cycle of investment activity.

In order to achieve sustainable development, the Company introduced the concept of green investments. These projects have additional strategic points when prioritizing projects in the capital investment portfolio.

Green investment projects include capital investment projects with a long-term effect on the achievement of sustainable development goals, ensuring the minimization of impacts on biological and physical natural systems, the optimal use of limited resources, the minimization, processing and destruction of waste, and the use of environmentally friendly, energy and material-saving technologies (green technologies).

In order to develop responsible investment practices involving the assessment of environmental, social and good corporate governance factors as part of investment analysis and when making investment decisions, the Company adheres to the following key principles of sustainable development directly related to investments:

At the end of 2021, one of the key projects of Kazakhtelecom JSC, which is of high importance for society and the economy, is the project "Provision of broadband access to rural population centers of the Republic of Kazakhstan using fiber-optic line technology".

The project is aimed at expanding access to telecommunications networks and broadband access services for government agencies and budgetary organizations in rural settlements in order to reduce the level of disparity between cities and villages in access to broadband access services. The project will impact 2.4 million people, bringing together around 3,718 government bodies and budgetary institutions in 1,249 villages. This figure reflects about fifty percent of the 7.75 million residents of the regions (districts) that will be connected to the high-speed broadband network. The level of environmental impact is defined as minimal.

Over the period 2018-2020, 837 rural settlements of the Republic of Kazakhstan were connected to telecommunications networks using FOCL technology and 2,505 state institutions and budgetary organizations in rural settlements were connected to the broadband access services of Kazakhtelecom JSC.

In 2021, OS base stations were connected in 164 population centers with a total capacity of 13,261 Mbit/s.

Innovative technologies play an important role in achieving the Company's strategic goals, as they have a direct effect on their implementation. Innovation and digital transformation improve governance, minimize risk, promote ESG principles and achieve SDGs.

The company has launched the Smart Turkey project, which is based on the remote transfer of water consumption data with connection to the IoT network. The project is aimed at ensuring remote monitoring and reading of meters, transparency and prompt response to a surge in resource consumption, ensuring the safety of residents of the city and prevention of unauthorized opening of hatches thanks to the Smart Hatch solution, monitoring and control of water consumption during watering work, and monitoring of soil wetness.

Kazakhstan is the first country in Central Asia and one of the first in the world to launch a fully dedicated FWAs network thanks to Kazakhtelecom JSC. For deployment, base stations were used that provide a large network capacity for fixed subscribers. In the reporting year, the Company launched the FWAs network in Nur-Sultan, a microdistrict in the South-East. The base stations have already been installed in the Shymkent urban and private sector and in Almaty and Kosshy.

The Company is actively implementing 5G technologies in Kazakhstan. Hotspots launched to test and display 5G mobile devices are already installed in cities such as Nur-Sultan, Almaty, Turkmenistan and Shymkent.

Digitalization is an important element in achieving such goals as optimizing and automating the Company's business processes. The information technologies implemented by the Company are aimed at developing such areas as data management, customer service, partnership and management.

The Company has a center of digital HR competencies for InDigiCo, the main function of which is the development of digital products. Several teams were created within the division, which include both Company employees and specialists involved. They are scrummers, product owners, developers, IT architects, designers, testers, etc.

Kazakhtelecom JSC is actively working to ensure access to the network of residents of remote villages and villages. Thus, thanks to Internet access, such areas as education, business, medicine, culture and sports are reaching a new level. These areas are actively developing in rural areas and have a direct effect on the daily life of the population. Residents interact with government authorities and other agencies, not by visiting cities, but directly from home online, promptly receive the necessary information, communicate on social networks, learn from remote sources and actively conduct business.

Kazaktelecom offers Smart City technologies in Zhanaozen covering all key areas of the city's life. Monitoring of COVID-19 distribution risks, citizens "safety, localization of online conferences for schoolchildren, mechanisms for managing the urban environment through data analytics, management and collection of data from all utilities facilities, public transport management, and many other elements are integrated into a single platform through which management can be performed. The introduction of Smart City technologies makes it possible to optimize the work of city services and improve the living standards of residents. This project has already been successfully implemented in Akkol.

The goal of this project is to involve private entrepreneurs in the provision of Internet services to rural communities. In addition, partners have the opportunity to earn money together with the operator.

Any Kazakhstani entrepreneur can take part in the project by completing an application on the ISMET.KZ digital platform.

The project will quickly eliminate the digital disparity between rural and urban areas, providing the rural population with high-speed Internet, and will also provide new vectors for business development and stimulate the development of entrepreneurship in rural areas.

The online WhatsApp channel has become the most popular, and for clients it is time saving, ease and convenience. More than 60 000 requests from the online WhatsApp channel are received and processed on a monthly basis, which is an indicator of the effectiveness of interaction and an increase in customer satisfaction. In addition, this year the channel was put into 24/7 operation.

In 2021, a new service — the eSIM card — became available to Kazakhtelecom JSC's clients. This is a microchip that allows the client to use all services of a mobile operator without using a SIM card. This initiative is useful for consumers, device manufacturers and communications operators, since it is an alternative to gadgets with two SIM cards and allows up to five eSIM profiles to be held on one device and to switch between them as necessary.

On the basis of Kcell networks, the Mobile Business service was launched, which allows businesses to work anywhere in the country and have access to their own information network without changing access parameters, while maintaining the protection of digital protocols.

The goal of this project is to reduce the risk of the spread of COVID-19 in medical institutions. Built-in video analytics makes it possible to recognize persons who do not comply with social distance rules or do not wear their masks properly.

In the fight against the spread of konavirus, all medical institutions in the Karaganda region have anti-virus surveillance cameras that make it possible to promptly respond and identify violators of the quartile regime and those who disregard protective equipment.

Procurement processes are managed in accordance with the regulatory documents of the authorized procurement body of Samruk-Kazyna JSC and the Company's internal documents. The Foundation's electronic procurement information system is an instrument for managing procurement processes.

The procurement system is being developed at the Fund level. Together with the Fund, Category-based Procurement Management Strategies are being developed.

The Company's procurement principles:

In order to increase local content in purchased goods, a local import substitution project office has been created on the basis of the Directorate of Telecom Komplekt to work with the instructions of the authorized bodies on issues of procurement and import substitution, and the Central Project Office of Samruk-Kazyna JSC. The Authorized Procurement Body of the Fund shall also establish target KPI on an annual basis to increase the share of local content in purchased goods, work and services.