keppel t&t going forward - keppel corporation

Copyright ©Keppel T&T 2002

Going Forward

Capital Structure& Business Strategy

23 May 200223 May 2002

Keppel T&TKeppel T&T


Overview of Capital Structure


Current Liquidity Overview

As of March 31, 2002, total net debt of $585 m (a) (b)

– Shareholders funds of $150.1 m

– Net gearing of 3.9x (c)

9 May 2002: Redemption of US$ convertible bond in amountof S$177m

– Funded by short-term loan from Keppel Corp atfavourable interest rate of 1.21% p.a. (3 months)

• Including net debt at M1 and other JCEs, which are accounted for proportionately

• $351M owed to related parties

• All assets including M1 at net book value

2


Capital Structure Review & StrategyTo strengthen balance sheet

–Reduce debt and improve gearing

To ensure sufficient funds are available to grownetwork engineering into a global business

– Investments of S$100M - $200M planned forNetwork engineering and solutions business overthe next 3 years

To pursue orderly divestments of non-core assets

–Shipping, logistics & investment in M1


Divestment PlanShipping business

– Merchant banker engaged as adviser

– Outcome of divestment expected by early 4Q02

Logistics business

– Merchant banker engaged as adviser

– Outcome of divestment expected by 3Q02

Logistics Warehouses

– Ongoing discussions with interested parties

Divestment of M1 stake dependent on favorable marketconditions

5


Divestment PlanShipping Assets

– 10 ships, book value: $140M, loan: $97M

Logistics warehouses

– Book value: $127M, loan: $43M

M1

– Book Value (35% of M1 NTA): $123M

– Indicative valuation by privatisation IFA is $ 653.7M(for 35%)

7


MilestonesAfter providing funds for growing the core business (operations andacquisitions),

– By end 2002, gearing ratio expected to be 2 times

– M1 to repay loan of $61M

– Divestment will raise $200M - $250M

– By end 2003, KTT is expected to have no debt

– Divestment will raise $550M - $650M

KTT will continue to evaluate all funding alternatives (including equity)if divestments do not take place as planned or if further capex /acquisition needs arise

7


Agenda for Business Strategy

Our Track Record

Vision

Market Opportunities

Competitive Landscape

Strategy

Milestones

Next Steps


Our Track RecordOffices in 3 continents and 12 countries

90 91 92 93 94 95 96 97 98 99 00 01 02

MicrowaveRadioTransmission

VoiceMessaging

Digital Cellular(GSM & CDMA)

Outdoor and In-building

IT services &Outsourcing

Broadband Wireless

LMDS

UMTSWireless LAN

Voice Portals

Network Optimization

ComputerTelephonyIntegration

HybridFiberCoaxial

CT2

Paging

TrunkRadio

AnalogueCellular

Over a decade of experience in wide field of info-comms technologies

Brunei

China

Vietnam

Indonesia

Philippines

Taiwan

ThailandGermany

USA (CGS)

Luxembourg

Singapore

Malaysia Japan


Our Track Record

10 years of track record in network engineering with over 50 majorprojects completed in more than 20 countries

Key customers include major blue-chip telecommunication serviceproviders and equipment vendors in Asia and Europe

Sales & marketing network spanning 3 continents and 15 countries

Key competencies in strategically located centers worldwide

International management team and staff strength of over 700,20 nationalities, 80% tertiary education

Completed over 7000 cell sites, BTS, IBC and microwave hops

Own proprietary processes and tools


KT&T’s Vision

To be a leader in

network engineering services and

technology solutions in the

info-communications industry

by delivering best-in-class services and solutions to

our customers

through professionalism and continuous innovation


Market Opportunities


Telecom Industry Drivers and TrendsDrivers– Deregulation & Convergence of Telecommunications,

Broadcasting & Information Technology Industries

– Digitization & Compression of Information, and the pervasive useof Internet & Wireless Communications

– Globalization on all frontiers including social, cultural & economic

Implications & Opportunities– Service Providers are moving away from provision of pure

connectivity to value-added services in the enterprise space, anarea which they are not familiar with

– Service Providers and Equipment Vendors are focusing on corebusiness and outsourcing more of their operations


Rapid and Sustainable Growth

The wireless and wireline communications market isexpected to grow rapidly over the next 5 years

Global Telecoms Market Global Wireless Market

0

1,000

2,000

3,000

2000 2001 2002 2003 2004 2005

Mil

of

Su

bsc

rib

ers

Wireless

Fixed Line

0

400

800

1200

2000 2001 2002 2003 2004 2005

Mil

of

Subs

crib

ers

United States

Europe

Asia

Source: Lehman Brothers' estimates, Industry estimatesSource: Lehman Brothers' estimates, Industry estimates, September 2001, September 2001


Capex Spending & Addressable Market

Capex Spending

0

50,000

100,000

150,000

200,000

2001 2002 2003 2004 2005

US

$ M

il

2 / 2.5G Capex 3G Capex Wireline

Spend on Engineering Services & Technology Systems

0

20,000

40,000

60,000

80,000

2001 2002 2003 2004 2005

US

$ M

il

Asia Europe United States


For the period 2001 – 2005

Total wireline and wireless capex is expected to be US$871 billion

The engineering services and telecoms technology software market is

estimated to be US$312 billion


Capex Spending

0

50,000

100,000

150,000

200,000

2001 2002 2003 2004 2005

US

$ M

il

2 / 2.5G Capex 3G Capex Wireline

Spend on Engineering Services & Technology Systems

0

20,000

40,000

60,000

80,000

2001 2002 2003 2004 2005

US

$ M

il

Asia Europe United States


Capex Spending & Addressable Market


The engineering services and technology systems marketis traditionally dominated by equipment vendors and

Service Providers’ internal engineering arms.Our available market is increasing significantly as they move toward

outsourcing of engineering services and technology systems.


Changing Face of Service Providers

NEW SERVICES• Video-on-demand

• Information-on-demand

• Electronic Commerce

• On-line Banking

• Application Service Provision

• Telemetry

• E-Learning

• Gaming

CONNECTIVITY• Domestic Telephone

• IDD

• Mobile Phone

• Paging

• Fax

• Internet

Traditional Telco

New Generation Service ProvidersNew Generation Service Providers


Source: INRA-Telcobus, ISM-Survey, ICN MCM 12 Analysis

E-mail, Fax,V-mail 30%

E-mail, Fax,V-mail 30%

Online Banking15%

Online Banking15%

Location Services15%

Location Services15%

Internet Access13%

Internet Access13%

Information Services10%

Information Services10%

Mobile Office7%

Mobile Office7%

Telematics 1%Telematics 1%Telemetry 5%Telemetry 5%

Payments 1%Payments 1%Games 3%Games 3%

Changing Face Of Service ProvidersNew Generation Mobile Service Providers - Applications Drive Opportunities


Globalisation of Service Providers

Germany, Belgium, Canada, China, France, Hong Kong, India,Japan, Russia, Singapore, Ukraine, UK, USA

UK, Australia, Belgium, China, Egypt, France, Fiji, Germany,Greece, Hungary, India, Ireland, Italy, Japan, Kenya, Korea,Malta, Mexico, Netherlands, New Zealand, Poland, Portugal,Romania, South Africa, Sweden, Switzerland, US

Singapore, Australia, Belgium, Taiwan, Thailand, Philippines,Indonesia, India

France, Austria, Belgium, Botswana, Cameroon, China, Denmark,Dominican Republic, Germany, India, Italy, Ivory Coast,Madagascar, Mauritius, Netherlands, Portugal, Romania,Slovakia, Sweden, Switzerland, Thailand, UK, USA


Vendors

PWC

Competitive Landscape

DyCom

MasTec Inc

Bechtel

CH2MHill

Qanta

O2Wireless

WFI

LCCI

LemconNetworkTechnology

I TSolutions

TelecomsService Provider

Multi-Industry

Datacraft

SCS

IBM

KPMG Consult

EDS

Aether Systems

724 SolutionsMobilocity

ArcStream

Accenture

CGE&Y

NDC

DeTeCon

Transfield

Nortel PS

Nokia

EcrissonInfoclarus

More Outsourcing Providing more innovative solutions

NewGeneration

ServiceProviders

Network Eng Cos

Diversified E&C Companies

Eng Arms of Telcos

IT Services Companies

Application Developers


NetworkTechnology

I TSolutions


PWC

Relative Competitive Positioning

DyCom

MasTec Inc

Bechtel

CH2MHill

Qanta

O2Wireless

WFI

LCCI

Lemcon

Datacraft

SCS

IBM

KPMG Consult

EDS

Aether Systems


ArcStream

Accenture

CGE&Y

NDC

DeTeCon

Transfield

Nortel PS

Nokia

EcrissonInfoclarus

KT&T ebizCGS

Radiance

Keppel CommsTrisilco Folec

Echo Broadband

New GenerationService Providers

Multi-Industry


NetworkTechnology

I TSolutions


PWC

Relative Competitive Positioning

DyCom

MasTec Inc

Bechtel

CH2MHill

Qanta

O2Wireless

WFI

LCCI

Lemcon

Datacraft

SCS

IBM

KPMG Consult

EDS

Aether Systems


ArcStream

Accenture

CGE&Y

NDC

DeTeCon

Transfield

Nortel PS

Nokia

EcrissonInfoclarus

KT&T ebizCGS

Radiance

Keppel CommsTrisilco Folec

Echo Broadband NetworkEngineering

andTechnologySolutions

New GenerationService Providers

Multi-Industry


China, Japan & Europe

4. Penetrate market withhigh growth & early

deployment and adoption ofinnovations

Address efficiency andcost effectiveness of

network rollout

NetworkEngineering

South East AsiaGermany

Existing Suite ofProducts & Services

1. Consolidate &integrate existingbusinesses andfocus on existingkey competencies

and target atwireless and fixed linebroadband customers

2. Focus on “homebases” for initial success

and critical mass

Value Proposition

MarketExpansion

KT&T’s StrategyKT&T’s Strategy

NorthAmericas

5. Leverage on in-countrycustomers, partners and

infrastructure tocapitalize onopportunities.

Enhanced Suite ofProducts & Services

3. Offer comprehensivesuite of products &

servicesNetwork

EngineeringOSS

TechnologyEnterpriseServices

Increase “stickiness” ofenterprise customers to Sv Pvdrs’

wireless data solutions.

Intellectual property rights & Innovative solutions & middleware

6. Use IP askey differentiator &

migrate up the valuechain.


Building Blocks

NetworkTechnology

I TSolutions

Telecoms Service Provider

EchoBroadband

TrisilcoFolec

KeppelComms

Others

KT&TBusinessSupport

Technology

Voice-DrivenTransactionApplications

LeverageTechnical

CapabilitiesAnd

Know How inEnterprise

Space

KT&TeBiz

ComputerTelephonyIntegrationSolutions

LeverageEnterpriseInnovation,Knowledge

AndCustomer

BaseIn Asia

StrategicOutsourcing

Services

LeverageTechnical

Capabilities

LeverageMNC HQs inN. America

LeverageTelco

CustomerBase in US

Radiance CGS

Network Engineering Solutions

BizApplications

EnterpriseVoice Soln

ITServices

Integration

ApplicationMiddleware

LeverageTechnical

Capabilities

LeverageTelco

CustomerRelations

To beDefined

InnovativeSolutions

AcquireIPR


Products and Services

Business &M arketAnalysis

LicenseBidding &Application

AdvancedTechnologyEvaluation &Im plem entation

Network Design& Planning

RF andBroadbandEngineering

NetworkDeploym ent

ProgramM anagem ent

NetworkM anagem ent

NetworkPerform anceM onitoring

NetworkOptim isation

Operations &M aintenance

Billing

Custom er Care

Provisioning

ERP

InfrastructureM anagem ent

Network Engineering

Consultancy

NetworkDesign,

Planning &Deployment

NetworkSupportSolutions

Business SupportSolutions

Operations Support Technology

FOR SERVICE PROVIDERS FOR ENTERPRISES & SERVICE PROVIDERS

Enterprise Service Technology

IT Services & Outsourcing(Call-centre,

technical helpdesk)

Training

Com puter-TelephonyIntegration

Applications(voice driven, transaction-

based applications)

Enterprise Support Solutions


Critical Success Factors

Addressable Market

Key Competencies

Sustainable Competitive Advantage

Knowledge-based Business & Intellectual Capital

Global Operations & Processes

Organisation Strategy & Structure

Migration up the Value Chain


MilestonesBy 2005

–To have established a core business withglobal operations and sustainable growthpotential

–To achieve a turnover of $ 1 billion


Next StepsGrow core business in network engineering andtechnology solutions through

–Consolidation and integration of existingbusinesses

–Organic growth in markets of high potential(eg. China & Europe) and markets of earlyadoption of innovations (eg. Japan)

–Acquisitions and strategic partnerships tostrengthen our value proposition and toposition for emerging market trends

keppel t&t going forward - keppel corporation

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