Pursuing Opportunities and Enduring Growth Amidst Volatility
2022 began with a sense of excitement to embark on the ‘new normal’ of personal and business life as measures were relaxed and borders opened. We were able to freely return to the office, connect in-person with colleagues, and quarantine-free travel was once again possible. It was noticeable that the internal and external vigour of business returned in full force and continued for the rest of the year. It was both a fillip and a relief to try to put the previous two years behind us.
As much as the re-opening was welcomed, we witnessed intensifying geopolitical conflicts, the widening climate crisis, further shocks to global supply chains, steep inflation and other economic setbacks. These intense and concurrent events overshadowed much of 2022 and continue to do so in 2023.
Navigating through yet another year of volatility and uncertainty in 2022 required renewed resolve, fortitude and optimism, both corporately and individually. For STT, our focus was centred on several overarching themes:
- Solidifying our group strategy
- Ensuring a return to revenue growth for our communications companies
- Continuing to leverage the growth in cloud demand for both the data centre and services perspectives
- Leading change to improve the environment for all stakeholders and deepening trust with them, both for STT and the Group
I’m pleased to share some highlights of the development and progress of our three business sectors.
Communications & Media
The ongoing business restructuring and transformation programmes implemented by our communications companies, particularly at StarHub and U Mobile, continued to deliver steady gains and sharpen their competitive edge. There was a stable trend of returning to revenue and subscriber growth that had been impacted by Covid-19 restrictions over the prior two years.
These efforts were validated by industry awards and quality partnerships such as StarHub’s top ranking in the 2022 Customer Satisfaction Index of Singapore for mobile and TV and U Mobile’s collaboration with market leaders Qualcomm and Time dotCom to accelerate innovation and network coverage.
Despite an increasingly complex environment, the STT GDC portfolio maintained their market and customer agility. Today, STT GDC has over 170 data centres in nine major countries across Asia-Pacific and the UK.
To propel its expansion into the growing European market, STT GDC announced Macquarie Asset Management as its significant minority partner in UK-based subsidiary VIRTUS. I am pleased to confirm that the first stage of this investment was closed in December. This partnership is pivotal to STT GDC’s position as a leading, multi-regional platform.
Infrastructure Technology (InfraTech)
Our InfraTech portfolio companies continued to gain market and industry recognition through new customer wins and industry partner awards. We also made important progress in the execution of our vision for a global born-in-cloud business with the introduction of a global organisational structure and operational integration of STT Cloud in Singapore, comprising the former businesses of Cloud Comrade and CloudCover, and 2nd Watch in the US. Subsequently, we intend to further integrate Armor Security (in the US) with Quantum Security (in Singapore).
Looking into 2023, we will continue to invest in the business to advance its growth, innovation and specialisation.
Making an impact beyond business
The message about the climate crisis from COP-27 in Egypt was loud and clear: The window for keeping temperatures from rising more than 1.5 C is narrowing. To "win this battle for our lives", as United Nations Secretary Antonio Guterres put it, every country and stakeholder must play their part and relentlessly work together.
This message certainly resonates with STT and our portfolio companies. We stepped up our efforts through proactive communication and spearheading green initiatives. STT published our inaugural sustainability report, covering 2021 performance and titled “Sparking an ecosystem of inclusive and sustainable growth”, and re-emphasised our commitment to drive collective action to address climate change and build a more inclusive world. We hosted an inaugural ESG (Environmental, Social and Governance) forum with our major portfolio companies to facilitate collaboration on sustainability initiatives including de-carbonisation.
As an advocate for the green economy, STT co-sponsored the AustCham Singapore-Australia Green Economy Agreement (GEA) industry briefing to raise awareness and encourage businesses to pursue green opportunities.
Our portfolio companies have also accelerated their climate action measures to address business and national concerns. STT GDC partnered with energy and technology providers to explore greener solutions like clean hydrogen, liquefied natural gas (LNG) and immersive liquid cooling technology to power data centres. The collaboration with the National University of Singapore saw the deployment of StarHub’s 5G and IoT solutions to help NUS be a smart, safe and sustainable campus.
I am also encouraged by the recognition our portfolio companies continue to receive for their sustainability practices:
- StarHub was named the World’s most sustainable Wireless Telecommunications Service Provider in the 2022 Corporate Knights Global 100; and winner of the prestigious Singapore Apex Corporate Sustainability Awards 2022 - Sustainable Business.
- STT GDC’s VIRTUS was recognised for Environmental Commitment in the 2022 European Technology Awards while GDS was ranked first among data centres operators in China in Greenpeace’s 2022 Clean Cloud report.
Caring for our employees and community
While we continue to build and grow the business, we remain committed to the wellbeing and long-term resilience of our employees and community.
We ensured all our employees have a safe, healthy and fulfilling work environment. The introduction and success of our hybrid work arrangements was in direct response to employees’ desire for more flexibility, even though we have returned to full work engagement. We have also instituted a number of measures that help address employees’ physical and mental health.
Throughout the year, we kept an active calendar engaging and supporting our community and education partners through financial and other assistance, and employee volunteerism.
We contributed approximately S$160,000 to our long-term community partners — Children’s Aid Society, Dignity Kitchen, Life Community Services Society, and Morning Star Community Services — in support of their existing and new initiatives.
As part of our efforts to promote digital literacy and inclusion, we introduced the first in a series of cyber-safety and cyber wellness talks for our community partners, Children’s Aid Society and Life Community Services Society. To help preserve the environment and raise awareness on coastal pollution and environmental degradation, nearly 40 employee volunteers from STT, STT GDC and STT Cloud, and 13 children from STT’s community partner Life Community Services Society, came together for a beach clean-up.
On the education front, we expanded our support with the launch of five merit and performance awards with two Singapore universities — Singapore Institute of Technology and Singapore University of Technology and Design. The STT Catalyst Award, an ongoing five-year partnership with Temasek Polytechnic, was given out to four promising students who also completed their internships at STT and STT Cloud. We welcomed two more STT scholars from the Lee Kuan Yew School of Public Policy (LKY School), part of the National University of Singapore, and Somerville College, Oxford University.
Opportunities in a volatile 2023
2023 is expected to be another daunting year. Although growth in digital demand has moderated, it is still growing robustly and remains resilient as technology has become a vital enabler of transformation for individuals, businesses and governments.
Years of supporting the digital transformation of our portfolio companies and directing investments towards digital and cloud related capabilities have put STT in a robust position where our encompassing ecosystem of digital infrastructure services and solutions is highly valued by strategic partners and customers.
While positioning ourselves for the macro volatility, I am energised by the market potential of the digital economy. With our proven investor-operator approach and experienced and committed teams, I’m confident that 2023 will be transformational for all three lines of our business as we consolidate our communications and media portfolio, and continue to support the growth of our data centres and InfraTech businesses.