Singapore, 17 September 2004 – StarHub Ltd (“StarHub”) announced today its initial public offering (“IPO” or “Offering”) of 481.8 million shares (the "Shares") at a Maximum Offering Price of S$1.15 each, in conjunction with its proposed listing on the Main Board of Singapore Exchange Securities Trading Limited.

The Offering consists of an international placement to investors, including institutional and other investors in Singapore, as well as an offering to the public in Singapore (the “Public Offer”) which includes an offering of up to 16.8 million Reserved Shares.

The Shares represent 22.8% of StarHub’s issued share capital and are being offered by certain of StarHub’s current shareholders.  NTT Investment Singapore Pte. Ltd. is offering 81.9 million Shares; MediaCorp Pte. Ltd. is offering 0.8 million Shares; BT (Netherlands) Holdings B.V. is offering 228.7million Shares; and Singapore Press Holdings Limited is offering 170.4 million Shares.  As all the Shares are being offered by its shareholders, StarHub will not receive any of the proceeds from the IPO.

In connection with the Offering, the Joint Global Co-ordinators of the Offering will be granted an over-allotment option by the shareholders of up to an additional 15% of the Shares offered in the IPO.

Credit Suisse First Boston (Singapore) Limited and UBS AG, acting through its business group, UBS Investment Bank are the Joint Global Co-ordinators, Bookrunners and Lead Managers for the Offering.  UOB Asia Limited is the Joint Lead Manager of the Public Offer and the sub-underwriters comprise CLSA Singapore Pte Limited, DBS Bank Ltd, Nomura Singapore Limited, Oversea-Chinese Banking Corporation Limited and The Hongkong and Shanghai Banking Corporation Limited.

Corporate Profile

StarHub is a Singapore-based integrated information, communications and entertainment company, providing a broad range of mobile, cable TV, broadband and fixed network services.  As at June 2004, StarHub provided at least one service to approximately 75% of households[1] in Singapore and approximately 27,000 businesses. 

StarHub also operates three networks: an island-wide GSM 1800 network that is fully upgraded for GPRS service, a two-way hybrid fibre-coaxial network that reaches over 99% of the homes in Singapore and a high capacity fibre-optic network which directly connects over 800 commercial buildings with wide coverage across the Singapore central business district.

Hubbing Strategy – Key Growth Driver

StarHub’s key differentiation from its competitors is its Hubbing strategy, which it believes is a key driver of customer growth and retention.  Being the only fully integrated telecommunications and cable service operator in Singapore has allowed StarHub to be a “one-stop shop” for convergent and bundled products and services for both consumer and business customers. 

In addition, Hubbing allows StarHub to realise multiple revenue streams from single customer accounts and a suite of service offerings. As a result, StarHub believes it is generating greater customer loyalty, lower churn, cost efficiencies and stronger brand equity.

Hubbing Metrics

StarHub has achieved rapid customer and revenue growth in its relatively short history, as a result of the success of its management in executing its strategy.

The total number of households with at least one StarHub service (post-paid mobile, cable TV and/or broadband services) grew from 572,000 as at 31 December 2002 to 659,000 homes as at 30 June 2004. Over the same period, the percentage of total households which subscribe to any two StarHub services grew from 25.5% to 29.5% while the percentage of total households with three services increased from 5.0% to 9.5%. 

StarHub’s Milestones

Another key driver of StarHub’s growth is its consistent differentiation through products and service innovation. Since its launch in April 2000, StarHub has achieved several key milestones, including:

Mobile

• First in Singapore to introduce mobile offerings such as “airtime rollover”, “per second billing”, “free incoming calls”, “free IDD calls” (priced as local mobile calls) to selected countries and the conversion of free SMS to MMS
• First operator in Singapore to provide the BlackBerry service
• Recorded a CAGR of 37.9% in mobile customer base between 2001 and 2003 while the overall Singapore mobile market grew at a CAGR of 10.3% over the same period
• Fastest-growing mobile operator in Singapore since its launch, with high ARPU compared to its local competitors in Singapore, for the quarter ended 31 December 2003. For the three months ended 30 June 2004, its pre-paid ARPU remained higher than that of its competitors and its post-paid ARPU of S$72 was higher than MobileOne and slightly below SingTel’s post-paid ARPU of S$73
• Fastest growth rate among youths and young adults in 15-29 years age band from 2001 to 2003
• Greatest beneficiary of growth in the pre-paid mobile market
• Non-voice services usage has grown rapidly to 15.2% of blended ARPU as at 30 June 2004
• Acquired its one millionth customer in June 2004

Cable TV

• Launched digital cable service at the end of May 2004 to increase channel capacity to 130 channels and provide other new features such as Pay-Per-View and Electronic Programme Guide
• As at 30 June 2004, StarHub had 393,000 residential cable TV customers and 1,800 business customers

Internet Access and Value-added Services

• Offers the highest download speed of 3Mbps available for residential broadband Internet access in Singapore
• StarHub believes it provided the most extensive WiFi coverage in Singapore for wireless broadband Internet access for the first half of 2003. Global WiFi coverage is also provided through the Wireless Broadband Alliance to over 20,000 wireless hotspots worldwide, including 66 international airports as at the end of December 2003
• Launched a pre-paid broadband Internet access plan, FlexiSurf, which was the first of its kind in Singapore and among the first in the Asia Pacific region

Fixed Network Services

• StarHub’s fixed network extends more than 2,000 fibre kilometers and directly connects over 800 commercial buildings in Singapore
• As at 30 June 2004, 18,000 wholesale and business retail customers subscribed to one or more fixed network services

Financial Highlights

In 2003, StarHub’s group revenue was S$1.1 billion.  Between 2001 and 2003, revenue grew by a compound annual growth rate of 19.9%.  For the six months ended 30 June 2004, its revenue was S$654.5 million, representing an increase of 22.2% over the same period in 2003.

EBITDA

With increases in customers and revenue across each of StarHub’s mobile, cable TV, broadband and fixed network businesses, StarHub recorded EBITDA of S$203.1 million in 2003, an increase of S$337.5 million from negative S$134.4 million in 2001.  For the six months ended 30 June 2004, its EBITDA was S$143.6 million, an increase of 56.3% over the same period in 2003.  EBITDA margin was 21.9% for the first half of 2004 representing a 20.8% improvement as compared to 18.2% for the year ended 31 December 2003.

Reduced Loss from Operations

Excluding IDA compensation of S$360.7 million in 2002 and S$90.2 million recognised over the first three months of 2003, StarHub reported a net loss of S$136.1 million in 2003 compared to a net loss of S$258.0 million in 2002.  For the first half of 2004, its net loss was S$45.5 million, a reduction of 38.2% compared with the same period last year (excluding IDA compensation).

Further Information

The date on which the offering price for each Share will be determined (the “Price Determination Date”) is expected to be on Wednesday, 6 October 2004.  The Public Offer and the Placement in Singapore is expected to open at 9.00 a.m. on 21 September 2004 and close at 12.00 noon (in respect of the Public Offer) and 5.00 p.m. (in respect of the Placement) on 5 October 2004.  The commencement of trading of StarHub’s shares, in board lots of 1,000 shares each, is expected to commence on a “when issued” basis on 13 October 2004.

Potential investors are advised to refer to the Prospectus dated 17 September 2004 (the "Prospectus") for information on the Offering. Any investment decision potential investors may make should be based solely on the information set out in the Prospectus.

The Prospectus is available for collection from any UOB branch in Singapore during business hours, from 21 September 2004, 9.00 am to 5 October 2004, 12.00 noon. Anyone wishing to acquire the Offering Shares will need to make an application in the manner set out in the Prospectus.