CHAIRMAN'S MESSAGE "WE EMBRACED THE STARHUB CHALLENGER SPIRIT AND PRESSED ON WITH THE RELENTLESS EXECUTION OF OUR D.A.R.E. STRATEGY - Investor ...
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CHAIRMAN’S MESSAGE
“
WE EMBRACED
THE STARHUB
CHALLENGER
SPIRIT AND
PRESSED ON WITH
THE RELENTLESS
“
EXECUTION OF OUR
D.A.R.E. STRATEGY.
Steven Terrell Clontz
Chairman
12 STARHUB LTD
STRATEGY
DEAR SHAREHOLDERS,
FY2020 was a year like no other. We embraced 50-50 joint venture company to secure one of
the StarHub challenger spirit and pressed on Singapore’s 5G licences and spectrum rights.
BUSINESS REVIEW
with the relentless execution of our D.A.R.E. Subsequently, StarHub was the first to bring
strategy, despite the extraordinary events and 5G non-standalone services to Singapore
unprecedented COVID-19 related challenges with the widest nationwide coverage1. Our
that unfolded over the past 12 months, integrated, experiential 5G Mobile+ plans
remaining focused on our core values and continue to gain traction with consumers
objectives. seeking greater speed and lower latency,
exceeding internal targets.
We achieved significant corporate milestones to
strengthen our competitive edge. We bolstered The introduction of StarHub TV+ marked
our service and product offering and diversified a significant leap forward for our Pay
our geographical presence with the acquisition TV content transformation, combining
of Strateq. We made good progress on our IT traditional linear TV and over-the-top (“OTT”)
and Pay TV transformation initiatives to better services onto a single hybrid platform,
GOVERNANCE
serve the needs of our customers across providing customers with a breadth of
our digital platforms. We also intensified our entertainment options. Our efforts continue
support extended to customers, stakeholders to gain positive traction in the market, and
and the community during this period, enabling we will look to bring on more OTT partners
us to surmount the challenging period together. to our platform in 2021.
UNRELENTING COMMITMENT TO Our heightened focus on Accelerating value
TRANSFORMATION creation from core businesses through
digitalisation and simplification of processes
In FY2019, we launched our D.A.R.E. elevated operational efficiencies across the
Transformation programme, identifying over Group, reaped greater procurement savings,
$210 million in cost optimisation initiatives and made further inroads to convert our Pay
SUSTAINABILITY
over a three-year period. Capital unlocked TV content providers from a fixed-fee model
through strategic initiatives was redeployed to a variable per-user fee model, affording
into digitalisation strategies and growth greater flexibility and scalability.
opportunities to ensure StarHub’s future
competitiveness and relevance. Realising growth from new opportunities
continues to be an area of focus. In July
As at 31 December 2020, we have executed 2020, we completed the acquisition of
82% of this cost optimisation programme. Strateq, a leading data-driven IT solutions
We continue to identify other areas of growth provider, strengthening our portfolio to
opportunities and cost efficiencies, and we ensure our competitiveness and relevance
remain confident of exceeding our $210 million for long-term sustainable growth in
target announced when we first commenced our Singapore and the region. Meanwhile, our
Cybersecurity business that was a product
FINANCIALS
D.A.R.E. transformation in late 2018. We have
seen these results through a 11.8% year-on- of several Mergers and Acquisitions (“M&A”)
year (“YoY”) reduction of operating expenses in has sustained its strong growth momentum
FY2020 as we transform our operating models. to record a 51.4% YoY revenue growth in
FY2020. We will continue to seek growth and
We made headway in Delivering market-leading diversification opportunities through M&A,
customer experiences during the year. In an as we pursue more strategic partnerships
industry first, we collaborated with another and trials to develop the Enterprise 5G
Mobile Network Operation (“MNO”) to form a ecosystem.
1 As at September 2020.
Annual Report 2020 13CHAIRMAN’S MESSAGE
In Enhancing our efforts to transform era, and secure our position as the Although competition continues to be
digitally, we continue to pursue a more preferred provider of communications, intense, we are able to differentiate our
automated and seamless product entertainment, and digital solutions. service and product offering with our
and customer journey, which will be superior network quality, customer
empowered by the IT Transformation To this end, we had in 3Q2020 experience and innovation that drives
programme. The use of digital commenced the multi-year IT greater value to customers.
channels to engage customers has Transformation programme that will
allowed us to not only lower our optimise StarHub’s IT operations, Apart from being the first to offer
operating costs but to deepen and lower costs and accelerate our digital customers access to 5G, we have taken
personalise our engagement with transformation. These digital strategies a different approach in introducing
customers. Our digital fighter brand, running on streamlined IT architecture this new technology to the market.
giga!, has maintained the highest Net will transform StarHub into a customer- To allow customers an early glimpse
Promoter Score (“NPS”) in the market driven performance engine powered into the 5G experience that offers high
and grown its subscriber base by about by data analytics; empowering us to speed and low latency, our Mobile+
five times over the past year. deepen our engagement with customers plans integrated entertainment and
at every touchpoint and provide us with gaming offerings. This demonstrates
TRANSFORMING FOR A greater agility to respond to changes StarHub’s commitment to customer-
NEW GENERATION in a dynamic and competitive market. focused innovations, beyond selling pure
We continue to implement lean and connectivity services, as we continue
FY2021 marks the final year of the automated processes, as well as to seek more of such content and
D.A.R.E transformation programme. agile operating and delivery models, gaming partnerships to differentiate
As we forge ahead to complete to accelerate our transformation to a our 5G services. We are heartened by
the programme, we are confident leaner, faster and smarter organisation. the encouraging take-up of our Mobile+
that StarHub now has the right plans, the migration of which was
building blocks to embark on further BUSINESS REVIEW & OUTLOOK accelerated by the launch of several
transformation to safeguard our popular 5G-enabled handsets in
competitiveness and sustainable Consumer – Creating Value Through 2H2020.
growth. Innovation
The Pay TV business has made
We are cognisant of evolving customer Over the course of the year, our Mobile big strides in its cost and content
needs in an increasingly digital world, business was impacted by the loss of transformation journey. Most of our
expedited by the effects of COVID-19 roaming, IDD and Prepaid revenues due content providers have been converted
that have influenced the way we work, to COVID-19 related travel restrictions. to a variable per-user cost model, and
live and play. This has reinforced the Looking ahead, we expect a gradual the new StarHub TV+ hybrid platform
need for a digital transformation of recovery as borders re-open, albeit integrates customers’ favourite StarHub
our business models and processes uncertain in time frame. programmes with popular OTT options
to ensure our leadership in the new on an intuitive interface powered by a
Network Quality: Customer Experience:
Fastest 4G and 3G Network Gold – Innovation in Customer Service
Infocomm Media Development Authority - Management, Planning & Practice
IMconnected H1 2020 report (Telecommunications)
2020 Asia Pacific Stevie Awards
Winner – Download Speed Experience
Opensignal Singapore - Mobile Network Highest-ever Customer Satisfaction
Experience Report (November 2020) Scores for Mobile & TV Services
Customer Satisfaction Index of Singapore
Highest Score – Excellent Consistent Quality (CSISG) - 2020 Q1 Info-Communications Sector
and Core Consistent Quality
Tutela Singapore - Singapore Mobile Experience
Snapshot Report (January 2021)
14 STARHUB LTDSTRATEGY
BUSINESS REVIEW
GOVERNANCE
plug-and-play android box. The Pay Our key strategies for the Enterprise and create meaningful applications for
TV segment has evolved tremendously group include increasing our share enterprise customers seeking focused
over the last two years; and while the of wallet from enterprise customers solutions for specific verticals.
industry continues to face headwinds in high-spend and/or fast growing
from disruption, we are confident that industries such as Government, The onset of the pandemic resulted in
the business is now operating on a more Financial Services, Hospitality, IT numerous deferments of enterprise
margin-efficient model that will allow and Manufacturing, Healthcare, IT-related projects and tenders
us to compete more effectively. Information & Media, Life Sciences into FY2021. We believe that while
and Manufacturing. We will tap into customers are more careful with
the underserved SME and mid-market their spending, they continue to be
Our Broadband business remained
space, augmenting our product committed to digitalise their business
stable during the year as we cast our
SUSTAINABILITY
and operations. Capitalising on our core
sights on the higher-value gaming offering with digital touchpoints and
competencies in communications and
segment with our differentiated providing an enhanced customer
seeing growth in adjacent verticals,
broadband technology and leveraged experience.
StarHub remains well-placed to
the use of new technologies, such as capitalise on this digitalisation wave in a
WiFi mesh solutions, to enhance our In the 5G space, we have seen post-COVID-19 world.
customers’ broadband experience. encouraging take-up of the Biz+ plans
We will consider the viability of new that enables enterprise customers to Our Cybersecurity business continues
technologies such as WiFi 6 and 5G take their office with them, wherever to deliver strong growth, and it has
Fixed Wireless Access, which when they go, by combining 5G connectivity, contributed an operating profit of $7.1
deployed will enhance our product SmartUC softphone capabilities and million, a vast improvement from the
offering. popular productivity applications in a loss recorded in the previous year.
single Mobile Office bundle. Ensign seeks to further expand its
FINANCIALS
Enterprise – Drive The Core, topline by deepening existing customer
Accelerate Our Growth Concurrently, we are actively building relationships, pursuing larger and
a 5G ecosystem, engaging with more complex projects, diversifying
Our Enterprise business continued to customers who are early adopters of its customer base, and exploring new
deliver growth in FY2020 as we looked 5G solution trials, and collaborating opportunities in regional markets.
to pivot and serve new customer needs with partners to explore the rich Meanwhile, it will strengthen its suite of
arising from distributed working, possibilities the new technology will capabilities and partner collaborations,
consumption and engagement in the unlock. We will focus on providing as it confidently rides on the 5G wave
advanced 5G solutions and Next- that will give rise to an increased need
new normal.
Generation Network that complement for cybersecurity services.
distributed working arrangements,
Annual Report 2020 15CHAIRMAN’S MESSAGE
During the year, our income streams Subsequent to FY2020, StarHub youths and families, and people with
were broadened with the addition of received honour for being Asia’s most disabilities with digital, employability
Regional ICT Services following the sustainable telecommunications and essential life skills. Surmounting
completion of the Strateq acquisition company and achieving 80th position COVID-19 restrictions, two of our charity
in July 2020, which contributed globally in the latest 2021 Corporate partners Nurture and Care Corner Youth
$33.2 million of revenue in FY2020. Knights Global 100, placing us in the top Services had gone digital to bring their
Strateq is pursuing growth in four key 1% of the over 8,000 large corporations activities online, maintaining outreach
pillars – capturing greater market share that were rigorously evaluated. We had and engagement with their service
for Petrol Retail Solutions; expanding also achieved an A- leadership score users. Our donations were recognised
its Healthcare Solutions presence; for the CDP Climate Change 2020 – our at the annual Community Chest Awards
bolstering its cloud and data centre
best performance since 2012, scoring with Community Spirit Gold and Charity
capabilities and reach; and focusing on
higher than the Asia regional average Gold awards.
data analytics and software engineering
of D, and higher than the media,
for its Enterprise Business Solutions.
telecommunications and data centre During the year, our subsidiary, Malaren
services sector average of C. International Sdn. Bhd., entered into
ALIGNED INTERESTS WITH a RM270 million sustainability-linked
SHAREHOLDERS Our unwavering dedication to term loan facility agreement with CIMB
sustainable practices drives us to Bank Berhad, marking StarHub’s
The Board of Directors has proposed a formulate strategies and initiatives maiden loan linked to sustainability
final dividend of 2.5 cents, in line with that maintain a harmonious balance performance targets. We will actively
prior guidance declared in August 2020. between our economic, social and participate in sustainability-linked
Together with the interim dividend of environmental imperatives, and this financing to proactively drive a
2.5 cents, total dividend for FY2020 is commitment permeates across sustainable business and enhance
5.0 cents, representing a dividend payout the organisation. the performance of the company.
of 80%, consistent with our dividend
policy to distribute at least 80% of net To support our stakeholders during the ACKNOWLEDGEMENTS
profit attributable to shareholders challenging COVID-19 period, we have
(adjusted for one-off, non-recurring raised and disbursed over $1 million On behalf of the board, I am delighted
items) on a semi-annual basis. from the newly created StarHub Cares to welcome Nikhil Eapen who takes
COVID-19 Fund to finance community over as Chief Executive with effect from
While we remain committed to enhance support programmes to help cushion 1 January 2021. Nikhil comes with 20
shareholder value, we continue to the impact on vulnerable groups in years of experience in the global ICT
exercise prudence and maintain a society. StarHub Cares COVID-19 sector working with senior executive
balanced and sustainable approach to Fund comprises contributions from teams to drive growth and make
dividends. In determining the dividend across the company – with the StarHub synergistic investments in infrastructure
levels for FY2021, we will take into Board of Directors giving up to 10% and enterprise communications and
consideration the ongoing effects of FY2019 director fees, the StarHub technology, most recently building and
of COVID-19, as well as our ongoing Senior Leadership Team injecting up acquiring cloud-centric platforms in IT,
investments in, and returns from to one month of salary, and voluntary cybersecurity and enterprise software.
transformation initiatives. donations from StarHub employees.
StarHub matched all contributions I would also like to thank Peter
A HOLISTIC APPROACH TO dollar-for-dollar. We also launched a Kaliaropoulos, who retired as Chief
SUSTAINABILITY whole host of initiatives to support both Executive on 31 October 2020, for his
Consumer and enterprise customers, invaluable contributions to the Group.
Sustainability is an integral part of and ensured the safety and well-being He initiated a sweeping strategic
our strategy and operations. As an of our employees. (Please refer to page transformation programme to
info-communications company, we 136 of the Annual Report for full details.) accelerate StarHub’s digital evolution,
are in a unique position to leverage improve customers’ experience,
technology to drive positive change. Although the pandemic put distances optimise efficiencies, redefine and ignite
Our commitment and transformation between people, StarHub remained a cultural transformation for staff, and
to become a more responsible and active in its community outreach identify growth opportunities. We wish
sustainable business began in 2008 programmes. In 2020, we supported Peter well in his future endeavours.
and it continues today. organisations that equip underprivileged
16 STARHUB LTDSTRATEGY
The Board and I would also like to
extend our appreciation to Dr Nasser
Marafih who will not be offering himself KEY GROWTH LEVERS & PRIORITIES:
for re-election. Over the last 13 years,
we have benefited from Dr Nasser’s
service; his global experience and input
BUSINESS REVIEW
have been invaluable to StarHub.
I would also like to thank our employees
for their dedication and invaluable Optimise value from 5G:
contributions during this challenging core assets, continually Efficient SA rollout; Encourage
period, adapting to a new way of review operating and migration to 5G plans; Harness
working and virtual collaboration. cost models 5G Enterprise for innovative
Their continued focus on delivering use cases
our strategic transformation whilst
maintaining a high level of product and
service satisfaction will be paramount to
the Group’s future competitiveness and
creation of shareholder value.
GOVERNANCE
The Board would like to extend our
sincere gratitude to the Group’s
ENTERPRISE: REGIONAL ICT SERVICES:
customers, business partners
Deepen market Seek synergistic growth;
and suppliers for their continued
penetration; Pursue new opportunities
support and loyalty. Finally, to our
Capture greater market in adjacent verticals
faithful shareholders, the Board and
share
management would like to extend our
heartfelt thanks for your continued trust
and support.
In closing, I would like to assure our
SUSTAINABILITY
stakeholders of our firm commitment
to transform for a new generation.
Fuelled by our relentless Challenger
Spirit which is today synonymous with
the StarHub brand, we continue to CYBERSECURITY: M&A for
transform and innovate to strengthen Maintain strong diversification &
our position as the preferred provider of growth trajectory new growth
communications, entertainment, opportunities
and digital solutions.
FINANCIALS
STEVEN TERRELL CLONTZ
Chairman
Annual Report 2020 17You can also read
