Hubbing. More Achieving Even StarHub Ltd Reg. No: 199802208C Annual Report Ltd StarHub 2011 67 Ubi Avenue 1 #05-01 StarHub Green Singapore 408942 Tel: (65) 6825 5000 Fax: (65) 6721 5000 www.starhub.com 2011 PORT ANNUAL RE For the fi rst time, a detailed Content > 1 CORPORATE INFORMATION sustainability report has been Our Key Figures for the Year prepared in accordance with > 2 Our Financial Highlights the Global Reporting Initiative Board of Directors Nominating Committee Auditors > 4 TAN Guong Ching (Chairman) Peter SEAH Lim Huat (Chairman) KPMG LLP Chairman’s Message (GRI) G3.1 guidelines, including Neil MONTEFIORE (CEO) LEE Theng Kiat Certifi ed Public Accountants GRI’s Telecommunications > 8 KUA Hong Pak TEO Ek Tor 16 Raffl es Quay #22-00 Message from the CEO Peter SEAH Lim Huat Hong Leong Building Nihal Vijaya Devadas KAVIRATNE CBE Strategy Committee Singapore 048581 Sector Supplement. Social and > 12 LEE Theng Kiat Nihal Vijaya Devadas KAVIRATNE CBE Partner-in-charge: ANG Fung Fung Even More Enhanced environmental data presented Steven Terrell CLONTZ (Chairman) (appointed w.e.f. 1 January 2011) > 16 LIM Ming Seong TAN Guong Ching in this report establishes Even More Engaging Sadao MAKI Steven Terrell CLONTZ Subsidiaries TEO Ek Tor LIM Ming Seong StarHub Mobile Pte Ltd > 18 our baseline. StarHub is LIU Chee Ming LIU Chee Ming Even More Enthralling StarHub Cable Vision Ltd. Robert J. SACHS Robert J. SACHS StarHub Internet Pte Ltd committed to working toward > 20 Nasser MARAFIH Stephen Geoffrey MILLER StarHub Online Pte Ltd setting targets and goals for Even More Endearing SIO Tat Hiang YONG Lum Sung SHINE Systems Assets Pte. Ltd. > 22 (Alternate to Peter SEAH Lim Huat) StarHub Shop Pte Ltd future reporting. Below are Board of Directors Stephen Geoffrey MILLER Company Secretaries StarHub, Inc. (Alternate to LEE Theng Kiat) Veronica LAI Kwai-Yi StarHub (Hong Kong) Limited some key statistics for 2011: > 28 Takeshi KAZAMI KONG Pooi Foong StarHub (Mauritius) Ltd In Discussion with (Alternate to Sadao MAKI) Nucleus Connect Pte. Ltd. StarHub’s Management Guy William NORMAN Registration Number > 34 (Alternate to Nasser MARAFIH) 199802208C Investor Relations Senior Management For enquiries on the Group’s Audit Committee Registered Address business performance, contact > 36 KUA Hong Pak (Chairman) 67 Ubi Avenue 1 the Investor Relations team Hubbing at a Glance Nihal Vijaya Devadas KAVIRATNE CBE #05-01 StarHub Green at email: [email protected] > 38 LIM Ming Seong Singapore 408942 The Nucleus Connect TEO Ek Tor Tel: (65) 6825 5000 17% 104.5 52,618 Conversation Fax: (65) 6721 5000 Executive Resource and EMPLOYEE MILLION kWh METRIC > 40 TURNOVER TONNES Enhanced Hubbing Compensation Committee Share Registrar in Review Peter SEAH Lim Huat (Chairman) M & C Services Private Limited LEE Theng Kiat 138 Robinson Road LOWER THAN NATIONAL ENERGY CARBON > 54 LIM Ming Seong #17-00 The Corporate Offi ce AVERAGE OF 24% CONSUMPTION EMISSIONS Group Financial Review Singapore 068906 > 59 Corporate Governance > 71 Directors’ Particulars > 75 Awards and Industry Honours 24,212 126 $1.8 > 76 All rights reserved. Some of the information in this report constitute “forward looking statements” which reflect StarHub’s current intentions, Investor Relations plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which CUBIC METRIC MILLION may be outside StarHub’s control. You are urged to view all forward looking statements with caution. No information herein should be METRES TONNES > 80 reproduced without the express written permission of StarHub. All information herein are correct at the time of publication. For updated Sustainability Report information, please contact our Corporate Office. WATER WASTE GENERATED DONATED TO CHARITIES/ > 117 strategic communicator and visual creator CONSUMPTION AND RECYCLED SOCIAL PROJECTS Financial Statements greymatter williams and phoa (asia) Our Key Figures for the Year KEY FIGURES 2011 PROFIT ATTRIBUTABLE EBITDA $ million TO SHAREHOLDERS $ million 11 676 11 316 10 602 10 263 +12.3% +19.9% EARNINGS PER SHARE cents DIVIDEND PER SHARE cents 11 18.3 11 20 10 15.3 10 20 +19.8% +0.0% STARHUB SHARE PRICE PERFORMANCE AGAINST STI 2010–2011 % +11% StarHub 100 -17% STI 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 StarHub Ltd Annual Report 2011 1 Our Financial Highlights 5-YEAR FINANCIAL HIGHLIGHTS HUBBING INDEX REVENUE $ million (HOUSEHOLDS) ’000 11 2,312 11 205 244 10 2,238 342 09 2,150 10 200 08 2,128 240 07 2,014 350 09 186 241 357 08 168 FREE CASH FLOW $ million 243 11 450 364 10 398 07 150 09 461 239 366 08 378 Triple households 07 483 Double households Single households EBITDA MARGIN ON SERVICE REVENUE % 11 31 10 28 09 32 08 32 07 34 StarHub Ltd Annual Report 2011 2 Our Financial Highlights $1,218 $376 $242 $337 MILLION MILLION MILLION MILLION GROWTH DRIVEN MONTHLY INCREASE GROWTH ATTRIBUTED BY POST-PAID SUBSCRIPTION PRICE DRIVEN BY HIGHER TO BOTH DATA & MOBILE SERVICES INCREASE PARTLY BROADBAND INTERNET AND VOICE HELPED TO STABILISE CUSTOMER BASE SERVICES PAY TV REVENUE MOBILE PAY TV BROADBAND FIXED NETWORK CUSTOMER BASE CUSTOMER BASE CUSTOMER BASE REVENUE ’000 ’000 ’000 (DATA & INTERNET) $ million 2,192 539 538 545 440 278 281 2,145 524 422 269 504 400 247 1,918 373 1,757 1,765 346 206 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 MOBILE PAY TV BROADBAND FIXED NETWORK REVENUE REVENUE REVENUE REVENUE $ million $ million $ million (VOICE) $ million 1,218 405 253 74 1,181 398 395 247 242 376 241 236 1,079 1,094 1,037 342 56 53 53 49 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 StarHub Ltd Annual Report 2011 3 Chairman’s Message $2.3 BILLION WE INCREASED OUR OPERATING REVENUE BY 3% TO $2.3 BILLION “STARHUB HAS CONTINUED TO GROW FOR A SEVENTH STRAIGHT YEAR. WE SAW GROWTH IN THREE OF OUR FOUR LINES OF BUSINESS: MOBILE, BROADBAND AND FIXED NETWORK SERVICES.” StarHub Ltd Annual Report 2011 4 Chairman’s Message Building on smartphones’ popularity Smartphones have become more and more ubiquitous. “WE FORMED We saw strong demand for the iPhone 4S. Tablets have MANY STRATEGIC also fi gured strongly in the market with players such as Apple, Samsung, Dell and even BlackBerry looking to ALLIANCES WITH play in the tablet arena. Our cost of equipment sold went up by 23%, contributed mainly by the high demand for SOME OF ASIA’S smartphones, especially the iPhone. TOP CARRIERS, We have continued to invest signifi cantly in our SUCH AS TELE- handset subsidies for smartphones, and this has translated to an increase in smartphone adoption and COMMUNICATIONS data usage by our customers. The rewards from consumers’ reliance on data will become more evident GIANT VODAFONE.” when the LTE network rolls out in 2012. LTE services will give us the fl exibility to replace our fi xed price packages with tiered pricing plans for data. Building on strategic partnerships We formed many strategic alliances in 2011. In partnership with some of Asia’s top carriers, namely Japan’s NTT Communications, Philippines’ PLDT and Malaysia’s Telekom Malaysia, StarHub will build and operate the Dear shareholders 7,200km-long Asia Submarine-Cable Express (ASE). In 2011, Singapore’s economic growth slowed, in line with This will complement our current strong connections into a weaker global economy. According to the latest statistics the US via the Asia-America Gateway (AAG) to allow our from the Ministry of Trade and Industry, Singapore’s GDP customers to directly connect to Hong Kong, Japan and growth fell from 14.8% in 2010 to 4.9% in 2011. The growth the Philippines. The system will potentially have future is expected to moderate further in 2012. connectivity to Mainland China as well as other Southeast Asian countries. The overall mobile telephone penetration rate in Singapore is now hovering around the 150% mark, with limited growth At an estimated cost of US$430 million, the ASE potential in this area. However, the era of smartphones is will be welcomed by both consumers and corporate quite evidently here to stay, with consumers utilising their customers alike. From video streaming and advanced mobile phones increasingly for data, rather than just calls multimedia applications on devices such as smartphones and SMSes. Singapore’s 3G market is booming with over and tablets, to time-sensitive transactions for business, 5.5 million 3G subscribers as of end-2011. This bodes these will all benefi t greatly from a network that well for the coming Long Term Evolution (LTE) and the minimises latency. introduction of the 4G network in 2012. A proud moment for us in 2011 was the signing of The Next Generation Nationwide Broadband Network telecommunications giant Vodafone as our exclusive (Next Gen NBN), an open system with all operators having partner in Singapore. StarHub’s partner network includes access, is slated for a 95% nationwide rollout by mid-2012. the Conexus Mobile Alliance, one of Asia’s largest mobile This should allow us to build on the resilience of our pay alliances with presence in 10 countries/regions, and now, TV and fi xed-line services and tap on opportunities in the we have extended the reach with Vodafone, which has commercial sector. In anticipation of this, we have formed over 40 partner networks worldwide. These networks will a new Enterprise Business Group, which is dedicated to allow us to offer fi rst-class, innovative mobile services serving the needs of corporate clients. to enterprises in Singapore, especially with the unique Vodafone Global Enterprise services, and a further StarHub has continued to grow for a seventh straight year, enhanced roaming experience abroad with StarHub.