46% Mobile Market Share in Singapore
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S INGA Headquarters Singapore Telecommunications Limited P Staying o 31 Exeter Road R e Comcentre ReSilient tele Singapore 239732 Republic of Singapore C Tel: +65 6838 3388 o Fax: +65 6732 8428 MMU Website: www.singtel.com ni C ATION S li M ite D ANNUAL REPORT 2008/2009 StRiving togetheR SINGAPoRe teleCoMMUniCATIONS liMiteD ANNUAL REPORT 2008/2009 For personal use only ContentS 2 Operational Highlights REACHING FURTHER AS THE STAYING RESILIENT WITH 4 Financial Highlights MARKET LEADER GOOD GOVERNANCE 6 Chairman’s Statement 23 Operating and Financial Review 58 Corporate Governance Report 9 Organisation Structure 75 Financial Statements 10 Board of Directors STAYING COMMITTED TO BE A 183 Interested Person Transactions 16 Members of the RESPONSIBLE CORPORATE CITIZEN 184 Shareholder Information Management Committee 50 Corporate Social Responsibility 186 Corporate Information 18 Awards and Accolades 54 Our People 187 SingTel Contact Points Singtel is asia’s leading communications group, providing a diverse range of innovative communications services including fixed, mobile, data, internet, it and tv. For personal use only Staying ReSilient • StRiving togetheR Resilience is a trait that is often appreciated only in challenging times, but reflects the underlying strength and true capability of a corporation. In a year that many companies worldwide found difficult, SingTel achieved growth and profitability, and laid the foundations for continuing success. Amid the economic downturn, we are striving as a Group, innovating and improving, so that we continue to offer a great experience for our customers as well as the best value proposition for our investors. Staying resilient, striving together. That’s how SingTel will emerge even stronger than before. For personal use only oPeRATionAl hiGhliGhTS no.1 in iPhoneS 100 Mbps The SingTel Group secured the rights to bring the Apple Next Generation National Broadband iPhoneTM 3G to Australia, India, Indonesia, the Philippines Networks are being planned in Singapore and Australia. and Singapore. We are the only telcos in Indonesia, Singapore and the Philippines to offer the iPhone 3G. In Singapore, OpenNet – in which SingTel has a 30% stake – was awarded Smart phones like the iPhone 3G are integral to the Group’s the contract to build and operate the strategy of attracting high value data-centric customers. passive infrastructure for the Next Generation National Broadband Network (NGNBN). The nationwide NGNBN is expected to offer users SingTel ranked top* in international broadband speeds of at least 100 Mbps initially, and eventually up to 1 Gbps. #1 Internet Protocol Virtual Private Network (IP VPN) solutions in the Asia-Pacific In Australia, the Government announced it will establish a new company that ex Japan region. We will continue to build on the will invest up to A$43 billion over eight years to build and operate a National strength of our IP VPN solutions to offer the best Broadband Network (NBN). The NBN performance and value. will deliver broadband access speeds of up to 100 Mbps to 90% of Australian *Based on IDC’s Asia/Pacific Semiannual Fixed-Line Telecom Services Tracker, First Half 2008 report homes, schools and workplaces. SingTel and Optus will leverage the networks to provide integrated high- speed services, differentiated through our unique bundling capabilities and 33% attractive content. With OpenNet utilising SingTel’s existing infrastructure Data revenue as a percentage of mobile for its fibre rollout, SingTel will service revenue for Optus customers. generate new income streams. In The Group is driving customers’ data Australia, the NBN paves the way for regulatory reform and opens up usage with compelling device line-ups significant opportunities for Optus in and useful applications. the fixed-line market. S$240 Million +32 Million SingTel successfully acquired Bharti Airtel added a record Singapore Computer Systems for about S$240 million. This enabled 32 million customers in the For personal use only NCS – SingTel’s existing wholly- past year and maintained its owned IT arm – to expand its scale significant lead over all other and strengthen its leadership in the government sector. operators in the country. 2 singapOre TelecOMMuNIcations lIMITed ANd SuBSIdIArY cOMpANIeS 652,000 96% NEW MOBILE CUSToMeRS hSPA coverage in in AuSTRAliA AuSTRAliA Optus is extending its 3G HSPA network to Optus registered strong growth momentum in mobile, reach 98% of Australia’s population, up from underpinned by targeted acquisition activities, innovative 96% currently. offers and growth in wireless broadband. With this investment, Optus will be the only carrier capable of challenging the incumbent telco’s network on both coverage and speed. 249 Million 249 SingTel is present in some of 185 the fastest growing mobile 124 markets in the world and 85 65 serves 249 million customers across Asia Pacific. Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 innovation SingTel is committed to innovation as the Group transforms from a pure carriage telco to a one-stop provider of integrated multimedia and ICT solutions. During the year, mio TV, the pay TV service in Singapore, gained traction with breakthrough offerings such as ‘Season Pass’ - which offers the latest Hollywood TV series as early as 24 hours after the US premiere – a first in the world. In Australia, Optus launched prepaid wireless broadband, which lets customers surf for 46% as much or as little as their budget allows. Optus also launched an industry first - ‘yes’ Timeless plans that provide unlimited calls Mobile MARkeT ShARe and SMSes. in SingapoRe For personal use only SingTel continues to lead and shape the Singapore market. In the past year, we successfully leveraged full Mobile Number Portability to extend our leadership in the Singapore mobile market. SINGTel ANNuAl repOrT 2008 / 2009 3 FinAnciAl hiGhliGhTS During the year, the Singapore Underlying net profit declined The Group has a diversified and Australia operations turned 6%, similarly impacted by foreign earnings base as a result of in strong performances despite currency movements as the its investment in fast-growing the economic challenges. In local Singapore dollar strengthened overseas markets. Overseas currency terms, Singapore revenue against the Australian dollar and operations contributed 72% to grew 13% and Optus revenue rose regional currencies. Assuming proportionate eBITDA. 7%. However, due to the significant exchange rates remained depreciation in the Australian unchanged, underlying net profit dollar, Group revenue – of which would have grown 3%. nearly two-thirds are derived from Australia – remained stable. oPeratinG Revenue undeRlyinG neT PRoFiT (1) PRoPoRTionate ebiTdA (2) (S$ MIllION) (S$ MIllION) 14,934 3,681 1% otheRS 13,377 14,844 3,556 41% Regional 3,455 MOBILe 28% Singapore 30% AUSTRALIA FY06/07 FY06/07 FY07/08 FY07/08 FY08/09 FY08/09 SingTel is the largest listed company in Singapore and has investments in key markets throughout the Asia pacific region. Today, overseas operations contribute about 73% of the Group’s proportionate revenue and 72% of proportionate eBITdA. In Singapore, SingTel continues to lead and shape the telecommunications market while investing in new growth engines like Managed Services, IcT, TV and advertising. Optus is a challenger in the Australian telecommunications market, with scale advantage and the ability to deliver bundled wireless and fixed customer solutions. SingTel’s investments in the large, underpenetrated markets of Asia provide a significant growth impetus for the Group. With presence in both emerging and mature markets and a track record of high cash returns, SingTel delivers a combination of growth and returns to its shareholders. For personal use only notes: (1) Defined as net profit before exceptional items and exchange differences on capital reductions of certain overseas subsidiaries, net of hedging, as well as significant exceptional items of associates. (2) Based on proportionate earnings before interest, tax, depreciation and amortisation. As the associates are not consolidated on a line-by- line basis, proportionate information is provided as supplemental data to show the relative contribution from the different markets that the Group operates in. 4 singapOre TelecOMMuNIcations lIMITed ANd SuBSIdIArY cOMpANIeS SinGAPoRe ebiTdA (S$ million) +8% 13% Fy08/09 2,162 Revenue GRoWTh Fy07/08 2,011 • Data & Internet revenue rose 11%, driven by higher demand for ethernet services, and strong growth in Managed Services revenue • Mobile revenue increased 9%, reflecting SingTel’s investments in the smartphone/ integrated devices strategy and initiatives in the prepaid market • IT & engineering revenue surged 47% with the acquisition of SCS. excluding SCS, IT revenue rose 11%, driven by higher sales of hardware, systems and network integration projects AuSTRAliA ebiTdA (A$ million) +3% 7% Fy08/09 2,067 Revenue GRoWTh Fy07/08 2,002 • Mobile revenue surged 13%, underpinned by strong demand for wireless broadband and iPhone 3G, as well as the new ‘yes’ Timeless unlimited plans • Business and Wholesale Fixed revenue rose 5% as Optus continued to drive on-net traffic and grow share in data and IP services • In Consumer and Small-Medium Business Fixed, Optus remained focused on on-net customer growth while exiting from unprofitable resale services ReGionAl earnings (2) (S$ million) -21% 35% Fy08/09 1,958 (1) cuSToMeR GRoWTh Fy07/08 2,487 • In India, Bharti registered impressive record customer growth despite an increase