Inspiring Change StarHub Ltd Annual Report 2017 Inspiring Change Inspiring STARHUB LTD Annual Report 2017 Report Annual STARHUB LTD OUR VISION Creating Happiness, Inspiring Change OUR MISSION To deliver world-class communication, information and lifestyle services, to every person, home and business. WHAT’S INSIDE Overview At a Glance 08 Overview Strategy StarHub’s bringing the future closer to consumers Chairman’s Message 10 through gigabit-class network upgrades and Significant Events 14 mesh networking systems, to enterprises through Value Creation 16 Enhancing the Customer Experience 18 robotic business operations, digital SME trade Board of Directors 20 platform and secure enterprise solutions and to In Discussion with StarHub’s Management 26 the entire nation through service innovation and Senior Management’s Profiles 34 co-creation that drives Singapore’s ‘We Economy’. Strategy 10 38 80 Performance Chairman’s Message Hubbing in Review Sustainability We intend to broaden engagement with our Hubbing remains our over-arching business To us, sustainability means using our core customers, allowing us more insights into what strategy and we are taking the Hubbing strengths as a Company to help spread the customers need and want. concept further – Hub+. benefits of our ICT solutions far and wide in Singapore. Performance Sustainability Others Governance HUBBING IN REVIEW Sustainability Report 80 Interested Person Transactions 207 – Consumer 38 Group Financial Review 120 Shareholding Information 208 – Enterprise 44 Notice of Annual General Meeting 210 Financials Corporate Information 214 Governance Financial Statements 2017 125 Proxy Form Corporate Governance 48 Directors’ Statement 126 Directors’ Particulars 71 Independent Auditors’ Report 136 Awards and Industry Honours 73 Statements of Financial Position 143 Investor Relations 74 Income Statement 144 Risk Management 76 Statement of Comprehensive Income 145 Sustainability Statements of Changes in Equity 146 Consolidated Cash Flow Statement 150 Notes to the Financial Statements 151 Financials Visit our website for the latest news and information- starhub.com Inspiring Change StarHub Ltd Annual Report 2017 01 We focus on people, We leverage on our collective experience and strong data analytics to understand what our customers expect of us. This allows us to make timely and relevant recommendations to them. Hub+ Experiences Provide customers lifestyle experiences that money can't buy CONCERT MEET PRIORITY & GREET TICKETS CSISG Ratings No. 1 No. 1 No. 2 Broadband TV Mobile 02 Inspiring Change StarHub Ltd Annual Report 2017 03 We put people ...connect at the centre enterprises to of everything opportunities, Our enterprise customers operate in an environment with greater IT complexities and we need to respond by providing them with more capabilities, and global and secure connectivity. Curiosity Hub Provides and monitors valuable social media Partnership insights and data analytics with OCBC To push Singapore’s “We Economy” Cyber Security Centre of Excellence Strong Capabilities in Cyber Security 04 Inspiring Change StarHub Ltd Annual Report 2017 05 ...and inspire change for the future. The Smart Nation push will yield plenty of opportunities for enterprises, start-ups and application developers to come together and build attractive IoT business cases, underpinned by a level of inter-connectedness. Hubtricity To support Singapore's Smart Nation vision Aethon TUG Robots Tie-up with ST Kinetics to enhance hospitality operations Nokia Partnership to co-develop loT ecosystem and launch innovative loT applications and services 06 Inspiring Change StarHub Ltd Annual Report 2017 07 AT A GLANCE What We Ofer As Singapore's first fully integrated info-communications 57% company, we ofer world-class communication, information and lifestyle services to every person, every home and every business. CONSUMER Mobile A wide range of mobile services, enabling customers to call, text and access the internet, stream music and watch videos whether at home or travelling abroad. Pay TV A suite of international and local TV channels, and an OTT app StarHub Go, to catch the latest drama, education or sports programmes. Broadband A new approach to home WiFi system. Google WiFi points connect seamlessly to each other, you can add as many as you need without afecting your WiFi speed. 0808 We will expand and elevate our oferings beyond mere Overview 43% Hubbing packs to a Hub+ proposition. We can do more to become our customers’ key lifestyle partner. ENTERPRISE Telco Services Strategy A rich variety of telco services for all your business needs from enterprise mobility to high speed internet connectivity to global VPN. ICT Solutions Performance Extending the scope to include ICT solutions like IoT, cyber security, data centre and cloud services. OUR SUSTAINABILITY EFFORTS Digital Services CO2e Emissions Gender Training Expenditure Generated Diversity Per Employee Develop digital platforms like Governance the marketplace or application tonnes % of Senior Level $ management with partners. 994 56,923 For instance, the tie-up with 60,000 54,705 54,822 1000 Prudential for Fasttrack Trade. 784 800 611 Wholesale Services 40,000 600 Market and sell capacity on Sustainability our core fixed network to Facilities-Based and 400 Service-Based Operators. 20,000 200 Male 64% Female 36% 0 2015 2016 2017 0 2015 2016 2017 Financials Inspiring Change StarHub Ltd Annual Report 2017 0909 CHAIRMAN’S MESSAGE A View from the Top ubbing remains our over-arching business strategy and we are taking the Hubbing concept even further. We intend to broaden engagement with our customers, allowing us more insights into what customers Hneed and want. Overview Dear Shareholders, more efciently. Of course, the digital world Singapore’s economy picked up in 2017. Certain introduces new challenges, disruptions, and industries surged ahead, while others, remained threats. So, aggressively embracing this constantly under pressure. For our industry, disruptive changing digital world is the best strategy for technologies, changing consumer preferences, remaining relevant. and increasingly complex information technology requirements for businesses continue to challenge For example, we have recently made key Strategy traditional business models. But those changes investments in strengthening our cyber security also ofer new opportunities for growth. At StarHub, capabilities, as the cyber threat environment is we know that to meet those challenges while also ever changing and will continue to be a threat making the most of the opportunities, requires a to networks and those connected to it for the For our industry, passion for innovation that is ignited by a genuine foreseeable future. It is not just paramount for disruptive technologies, desire to please our customers. obvious reasons; there is value to all stakeholders in StarHub maintaining a secure network. changing consumer Over the years, we have ingrained the ‘market- preferences, and driven, customer-centric’ culture into how we Hubbing remains our over-arching business increasingly complex operate as a Company. This approach has strategy and we are taking the Hubbing concept information technology worked well for us since our early days as even further. We intend to broaden engagement Performance requirements for a start-up company challenging the incumbents. with our customers, allowing us more insights into We brought many “firsts” to market under the what customers need and want. A combination businesses continue ‘Hubbing’ banner with Mobile, Pay TV and of modern technologies, new ways of addressing to challenge traditional Broadband services, enabling StarHub to the lifestyles our customers choose, and a business models. grow to the size we are today. fresh approach to building strong alliances and partnerships, brings a load of opportunities for Steven Terrell Clontz StarHub has a new corporate vision – ‘inspiring delighting customers in ways that we could not Chairman digital innovation – for the best digital life has to have achieved before. And we are just at the very ofer’. We believe there are numerous opportunities beginning of this journey. to bring innovative services to market that enhance Governance the way that people interact, their entertainment For example, in October, we announced a landmark options, and their worklife. The accelerating growth tie-up with OCBC Bank, where we ofered Service Revenue Mix in data reservoirs and the ability to analyse that promotions to each other’s customers and are data, along with machines that quickly adapt and continuing to jointly explore exciting initiatives. learn, ofer new ways to make smarter decisions StarHub’s strategic investment in entertainment about how to please customers and use resources company mm2 Asia Ltd, has allowed us to RECAP 2017 Sustainability Sustainability Enterprise Leadership Mobile 54% Pay TV 16% CORPORATE KNIGHTS’ ASTL + D’Crypt Broadband 10% GLOBAL 100 2 New Enterprised Fixed 20% Ranked in the list of the world’s Acquired majority stake in Directors coming onboard most sustainable company for ASTL and D’Crypt (as of providing diverse and invaluable Financials five consecutive years January 2018); specialising insights with their experiences in cyber security solutions 10 Inspiring Change StarHub Ltd Annual Report 2017 11 CHAIRMAN’S MESSAGE A View from the Top (cont’d) ofer hard-to-get tickets for music events and of our TV revenue was paid for branded content Service Revenue For instance, we have implemented