TEAM,

TRUST AND AGILITY

Digitalisation is accompanied by a profound change of the foundations and methods of working. This includes the question of how employees interact within the company as well as with customers, suppliers and other stakeholders. Telekom Austria Group actively promotes the competences required.

OUR PURPOSE: EMPOWERING DIGITAL LIFE

As a driver of digitalisation within its markets, Telekom Austria Group has given this mega trend the priority it deserves. Digitalisation is a promising business opportunity. At the same time, it is a matter of responsibility to stand by the customers by providing them with equal access and secure connectivity as well as with solutions and services that enrich their private and professional life. Moreover, the company’s infrastructure and service portfolio form the basis for business and public customers and enable them to offer their customers as well as citizens high-quality products and services. Together with Telekom Austria Group’s share- holders, employees, customers and partners and through initiatives that aim at fostering start-ups (see Network & Customers) the Group is dedicated its common purpose: Empowering Digital Life.

CORPORATE CULTURE AND GUIDING PRINCIPLES

In the digital era business success is strongly driven by new ways of working. In 2016, three Guiding Principles that perfectly serve people’s needs in the digital years to come have therefore been developed and agreed on across the Group: Team, Trust and Agility. Telekom Austria Group is convinced that these principles will lead it to excel in fulfilling customer expectations and paying back to society.

In addition to being willing to learn new things (‘Constant Learning’) and focussing on mu- tual strengths within the Group (‘One Company’), Telekom Austria Group’s Guiding Princi- ples are important ‘enablers’ for a corporate culture that is actively imbued with life and serves the Group’s common purpose of ‘Empowering Digital Life’. The Guiding Principles’ three core elements (see box Our Guiding Principles) form the framework of Telekom Austria Group’s new self-conception and the associated working methods that are conducive to a positive development of the company in the long term.

DIVERSITY: THE POTENTIAL OF VARIETY

Characterised by dynamic change, the complexity of tasks in the digital age has seen a steep rise. That is why it is easier for diverse teams than for individuals to master this myr- iad of associated challenges. Teams work most effectively if they manage to link as much expertise and as many different skills as possible. The team members’ varied know-how, also referred to as diversity, is an essential success factor. For only different views of a problem yield comprehensive and efficient solutions. Echoing these sentiments, Telekom Austria Group has signed a Charta of Diversity. It thus publicly commits to utilising and maintaining the wide range of cultural traditions and skills at its seven subsidiaries.

Telekom Austria Group also makes a clear statement when it comes to equal rights for women: Gender equality is a fixture in all its activities. Many programmes promoting women to take up technical professions, for instance, contribute to this. Telekom Austria Group aims at increasing the share of women in management positions to 38 % by 2018. In 2016, the company focussed on recruiting women for top expert and management posi- tions and on offering flexible ways of working and child care initiatives to reach this target. In Austria, a successful women’s network is providing women with a platform to exchange ideas, share know-how and support one another. All of this resulted in an increase of the proportion of woman in management positions from 35 % in 2015 to 36 % in 2016. 102-12

CONSTANTLY LEARNING FROM EACH OTHER

Digitalisation profoundly affects communication, collaboration and skill development within Telekom Austria Group. Learning mainly takes place ‘on the job’, while new knowl- edge is deepened through exchange with other team members, during their work, in per- sonal talks and via digital solutions such as cloud-based e-learning tools.

Employees are expected to be open to new ideas and to think in new dimensions — including actively breaking away from old routines, showing entrepreneurship and self-motivation by taking personal responsibility for their professional growth and career opportunities.

In 2016 Telekom Austria Group took part in the first wave of companies that rolled out Face- book’s enterprise solution Workplace, which has since then been available to all of the Group’s employees. As a social media tool for collaboration and knowledge sharing, it is connecting employees throughout the Group so that everyone in the company can access the information needed, reach out to each other and gain new knowledge faster and more accurately (see Thinking globally, leading regionally).

In an ever-changing industrial and societal environment, the competencies required are constantly changing as well. Developing and maintaining the appropriate skills is therefore a critical success factor for the company. One of Telekom Austria Group’s three strategic en- ablers — besides the Group’s Guiding Principles and focussing on mutual strengths (‘One Company’) — is ‘Constant Learning’. This applies to the individual employee as well as to the organisation as a whole. Aligned with Workplace and through a cloud-based digital learning solution, the company is providing employees with access to state-of-the-art learning opportunities (also accessible via a mobile application) and a broad content pool. In 2016, development programmes for Sales and IT have been created that also strongly rely on e-learning in combination with other learning methods as well as mutual exchange within the communities. So called ‘Competence Channels’ with a special focus on sales, fu- ture networks, digital life and leadership on the Workplace platform are enabling employ- ees to steer their learning journey themselves and to receive regular updates on the latest developments in the digital sector. 404-2

‘Young Potentials’ from the entire Group can apply to take part in a Group-wide further edu- cation programme at the Telekom Austria Group Business School. In the course of their training, they are also working on evolving Telekom Austria Group’s corporate culture and are encouraged to find new ways of working and learning. In order to cover its future de- mand for young specialists, Telekom Austria Group trains its own apprentices. Austrian subsidiary A1 trained 182 apprentices in 2016, Bulgarian subsidiary Mobiltel 61.

LEADERSHIP IN THE DIGITAL AGE

The digital era also alters corporate management standards. Talents are no longer aspiring life-long careers with big companies. They rather decide on where they want to work based on what currently fits their personal and lifestyles. Companies therefore have to be aware of both customers’ and employees’ needs and show the ability to serve them accordingly. This requires an altered management style. First and foremost, leadership in the digital age means to break up old, hierarchical leadership patterns and to trust and empower employ- ees to act in an agile way within their teams. For multinational companies such as Telekom Austria Group, it is essential to promote this spirit on an international level. In 2016, Telekom Austria Group has pursued this objective via the Group-wide launch of its Guiding Principles and Workplace.

Digitalisation creates momentum and requires a change of leadership. However, it is still up to managers to execute this new style of leadership. In the current time frame, not the ones who make the best predictions but the ones who best adapt to current developments are the ones who will be successful. Telekom Austria Group expects its managers to show a high level of willingness to change permanently in order to ensure that leaders, their teams and the company are fit for the future. The Group encourages its managers to utilise common strengths and to remain open to learning and adapting to new demands. Quarterly leadership webcasts are held throughout the Group to enrich the ongoing discussion about new ways of leading in a dedicated competence channel on the company’s Workplace platform. Thus, not only managers but everyone in the company can take part in this discussion.

At Telekom Austria Group, Group-wide performance management standards make sure that the quantifiable performance of employees is given just as much attention as the ‘how’ aspect of their daily work based on Telekom Austria Group’s Guiding Principles. Personal development is a major aspect within the performance management process and has been included in the latter in 2016.

Contemporary styles of leadership strongly includes the use of feedback, in particular peer- to-peer feedback. Telekom Austria Group encourages employees to appreciate each other using Feedback Cards (see Thinking globally, leading regionally) which are also based on behavioural best practice examples in line with the Guiding Principles. Telekom Austria Group takes feedback seriously, which is why the company carried out its employee survey TAGisfaction in 2016 and is taking respective steps wherever room for improvement is iden- tified. 404-3

All of this aims at creating a working environment that creates value for the company, its employees, customers and the society. This is how Telekom Austria Group wants its employ- ees to experience their ‘Employee Journey’ — as a journey that is Empowering Digital Life.

DIGITALISATION & EMPLOYEES

Digitalisation and innovative communica- tion solutions based on it create entirely new possibilities when it comes to the design of work environments. The possibil- ity to cooperate independent of place or time as well as exchange information across social networks or knowledge plat- forms offer great potentials in terms of productivity and enhancing a work envi- ronment’s appeal. Thus, Telekom Austria Group increasingly invests in the use of its central e-learning platforms which allow for training courses to be held independent of time and place and in its Group-wide social media platform Workplace. The lat- ter promotes intern-departmental cooper- ation in international project groups and- virtual teams as well as know-how trans- fer within the Group.

OUR GUIDING PRINCIPLES

Team

We work together by using shared assets and strengths to fulfil our customers’ ex- pectations. It is important to us to be open and transparent as a team in everything we say and do. Everyone’s opinion counts, everyone is empowered to act.

Trust

Trust creates an environment in which cu- riosity, openness and collaboration are key. We truly stand behind what we say and we keep our promises. We trust in the knowl- edge and empowerment of all employees. We employ integrity in our interactions with each other as well as with customers, suppliers and partners. This helps us to become better every day.

Agility

The digital world is not waiting for us to adapt. We take decisions and execute them quickly. We learn in our daily work, when talking to colleagues and in our social networks. We learn from our failures and always try again.

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FURTHER TRAINING PROGRAMMES (SELECTION)

-New Manager Program (A1)

-Local Leadership Development Program (Mobiltel)

-„Development@vipnet” to promote new  comptences (Vipnet)

-Manager’s School (velcom)

-Si.academy programme for employees to  promote new competences (A1 Slovenija1) )

-„Development Center” for employees in Sales (Vip mobile)

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1) The renaming of Si.mobil d.d in Slovenija, d.d. in the course of the rebranding process became effective in April 2017.

AWARDS

-Beste Workplace Launch Campaign in EMEA (Telekom Austria Group)

-Winner of the HR Excellence Award for the change proess Customer needs you (A1)

THE ROADMAP — EMPLOYEES

TARGETS1)

-Evaluation of measures to  support women

-Continuing the women matter network at Austrian subsidiary A1

-Extending the

women’s network on an international basis

2016–2018

38 % women in management positions

-Implementation of measures to promote flexible working arrangements

-Launch of a Group-wide social media platform (Workplace) to allow flexible, international collaboration

-Introducing a uniform mobile work agreement (A1)

-Launch of Telekom Austria Group’s new Guiding Principles

-Defining a mobile work agreement across the entire Telekom Austria Group

-Creating framework condi- tions for working together in virtual work environments

-Regular Culture Pulse Checks throughout Telekom Austria Group

2016–2018

Anchoring of flexible working arrangements

-Establishment of a Group- wide knowledge platform

-Launch of a Group-wide social media platform (Workplace) to allow for transnational exchange

-Introducing a new Group- wide e-learning platform

-Evaluating the Group-wide implementation of Feed- back Cards (see Thinking globally, leading regionally)

2016–2018

Creating framework conditions for

the promotion of continuous learning2)

1) Baseline for targets is 2015. 2) Due to a new strategic direction, the Group-wide target of implementing a health pass was replaced by the goal to promote continuous learning. Health promotion initiatives are implemented locally by the respective subsidiary.

In the autumn of 2016, Telekom Austria Group rolled out its social media platform. As a standalone collaboration and communication solution, this tool not only allows one to communicate with col- leagues transparently, efficiently, swiftly and regardless of one’s location but greatly improves one’s ability to share and utilise knowledge and creativity.

For the fifth time, Austrian subsidiary A1 staged its A1 Team Triathlon in September 2016. For the first time, it had invited teams from Telekom Austria Group’s other subsidiaries. Teams of three took to the track with more than 1,000 employees forming a total of 335 teams to participate in this event in 2016. From members of the board to apprentices, all tiers could be seen swimming, cycling and running. Of course, the event focused on having fun and team building, apart from the sporting aspect.

Belarusian subsidiary velcom gives all its employees the chance to hand one another personal Feedback Cards. These are used to give direct feedback and express mutual appreciation. The cardscan be sent to one’s colleagues in digital form or via mail.