According to Category of Shareholders Directors’ Interest in Shares 30 Largest Shareholders Information on Substantial Shareholders Corporate Highlights 8 10 12 13 14 16 18 Performance Highlights Financial Highlights Operating Performance Indicators Segmental Analysis Financial Calendar Awards & Recognition Milestones 2010 219 220 221 222 Corporate Profile 26 27 28 30 Corporate Structure Corporate Information Board of Directors Board of Directors Profiles Analysis of shareholdings 224 225 226 227 229
Business Review 36 42 50 52 60 64 71 78 Chairman’s Statement Chief Executive Officer’s Statement Senior Management Senior Management Profiles Customers Innovation Our People Corporate Responsibility other Information 232 236 256 263 266 268 List of Properties Held by Maxis Berhad Disclosure of Recurrent Related Party Transactions Additional Disclosures Glossary Maxis Centres Maxis Exclusive Partners Reports 84 92 104 110 111 Audit Committee Report Statement on Corporate Governance Internal Control Statement Directors’ Responsibility Statement Risk Management
Annual General Meeting 276 279 Notice of Annual General Meeting Form of Proxy maxis berhad annual report 2010 introduction oUR CoMPAnY Maxis Berhad (“Maxis” or “the Company”) is now an integrated communications service provider in Malaysia with 13. 95 million mobile subscriptions as at 31 December 2010. Together with its subsidiaries, Maxis provides a full suite of communications services on multiple platforms to meet the growing needs of individual subscribers, families, small and medium enterprises, large corporations and the government in Malaysia.
Maxis was listed on the Main Market of Bursa Malaysia Securities Berhad in November 2009. As an industry pioneer, Maxis has led the Malaysian market in offering innovative mobile products and services since its inception in 1995. It was the first to launch 3G services, Maxis3G, in March 2005. In 2006 it was among the first mobile service providers to use HSDPA, a high-speed feature of the 3G network. In 2009 it was the first to introduce HSPA+, the latest advancement in 3G/HSPA network capabilities, to enhance the delivery of wireless broadband services to the market.
Maxis was also the first telecommunication services provider to introduce a range of smartphones to Malaysia including the BlackBerry™ and the Apple iPhone™. In 2010 it set an industry milestone by building the largest 3G network with 76% population coverage and by signing the landmark HSBA agreement with Telekom Malaysia Berhad as well as the infrastructure share agreement with Tenaga Nasional Berhad. In comparison with global mobile operators, Maxis is a leading provider of non-voice services, with 38. % of its total mobile revenue derived from such services and with 7. 2 million active mobile data users. Its partnerships with leading global content and applications companies such as Western Union, PayPal and the Barclays Premier League are central to delivery of the leading-edge services that its customers have come to expect. Its activities also contribute towards building a local content eco-system to encourage the Malaysian content industry.
Maxis’ track record of enabling innovation, delivering excellent customer experiences and adding value to stakeholders has earned the Company recognition over the years. In 2010, Maxis was one of five finalists in the Best Mobile Operator category at the World Communication Awards, being the only Malaysian company to be nominated for this prestigious award. Maxis also won Asia’s Best Employer Award 2010 from Singapore’s Employer Branding Institute. In its pursuit of Corporate Responsibility, Maxis has played a role in serving local communities.
Since 2002, Maxis has been dedicated to working in collaboration with the Ministry of Information Communications and Culture of Malaysia (“KPKK”) and the Malaysian Communications and Multimedia Commission (“SKMM”) on the Bridging Communities programme to widen Malaysia’s access to digital platforms. 4 maxis berhad annual report 2010 introduction oUR MIssIon malaysia's leading mobile communications service provider the nation's premier integrated communications service provider maxis berhad annual report 2010 5 introduction UR VIsIon AnD VALUes Our vision to bring the future to our customers’ lives and businesses, in a manner that is simple, personalised and enriching, by efficiently and creatively harnessing leading-edge technology and delivering a brand of service experience that is reliable and enchanting. Our values simple CreatiVe trustWorthY braVe 6 maxis berhad annual report 2010 maxis berhad annual report 2010 7 Corporate highlights PeRFoRMAnCe HIGHLIGHts Revenue RM8. 9 b 42% revenue share (1) • 42%revenueshare(1) in 2010 • 50. %incrementalrevenueshare(1) in the 2nd half of 2010 • Revenuegrowthdrivenbystrongnetadds,innovative data services and strong smartphone take-up Non-voice (2) 38% of mobile revenue 22% growth • Over50%ofnon-voicerevenuefrommobiledataand wirelessbroadband • Wirelessbroadbandgrowthof78%toRM354million revenue • Mobiledatagrowthdrivenby3-foldincreaseindata usage • 7. 2millionactivemobiledatausers Subscriptions 13. 9 m 13. 5% growth • Widenedsubscriptionbasegapwithcompetition; 44%shareofnetadds(1) • Solidprepaidmomentumfromyouth,migrantsegments and emerging markets • Wirelessbroadbandtakeupmorethandoubledto nearly600,000subscriptions.
Shareofnetadds42%since the3rdquarterof2009 • ContinuedleadingpositionintheCorporateandSME mobile sectors • OutstandingEBITDAmarginat49. 8%,amongthe highest globally • EBITDAmarginof50. 6%inthe4thquarterof2010 • Strongcontrolmeasuresonoperatingexpensesandbad debt EBITDA (3) RM4. 4 b 49. 8% margin 8 maxis berhad annual report 2010 Profit After Tax RM2. 3 b 25. 9% margin • OutstandingPATmarginof25. 9% • PATmarginof26. 4%inthe4thquarterof2010 • Healthybalancemaintainedbetweenoptimising earningsfrommaturingmobilebusiness,while continuingtoinvestprudentlyingrowingdatarevenues
CAPEX RM1. 4 b 16. 3% of revenue • Fastestandlargest3Gnetworkcovering76%of population • Continuedinvestmentbegunin2009intoexpandingand enhancing3Gfootprint,transmissionnetworks,fixed access,qualityandmodernisation • AgreementwithTelekomMalaysiaBerhadtohaveaccess totheirHighSpeedBroadbandnetworktocomplement selectownfibrenetworkbuild-out • RM3billiondividendsdeclaredorproposedfor2010 • Netdebt (5) to ebitda(3) ratio at 1. 04x Free Cash Flow (4) RM2. 3 b 21. 5% growth otes (1) (2) (3) (4) (5) Among top 3 operators in Malaysia based on published results Non-voice revenues include SMS, Advanced Data Services ("ADS"), wireless broadband and Value Added Services ("VAS") Excluding handset amortisation Free Cash Flow is defined as cash flows from operations less capex, handset subsidies, interest expenses and finance lease repayments Net debt is calculated as total interest bearing financial liabilities (including deferred payment creditors, loan from a related party, borrowings and derivative financial liabilities) less cash and cash equivalents axis berhad annual report 2010 9 Corporate highlights FInAnCIAL HIGHLIGHts The financial highlights set out on pages 10 to 13 are prepared on the assumption that the business combination comprising the acquisitions of the Malaysian businesses by the Company from its immediate holding company had been effected on 1 January 2006. This is to provide a meaningful comparison of the financial performance between the reported periods. Financial Highlights 2010 RM’m 2009 RM’m YOY %
Financial Indicators Revenue EBITDA (1) Profit from operations Profit before tax Profit for the financial year Profit attributable to shareholders Financial Ratios EBITDA margin (4) PBT margin (5) PAT margin (6) Interest cover ratio (7) Earnings per ordinary share (sen) - basic (8) - fully diluted (9) 8,869 4,416 3,343 3,132 2,295 2,295 8,611 4,337 3,055 3,007 2,232 2,232 3. 0% 1. 8% 9. 4% 4. 1% 2. 8% 2. 8% (3) (3) (3) (3) 49. 8% 35. 3% 25. 9% 13. 9 30. 6 na 50. 4% 34. 9% 25. 9% 39. 7 29. 8 na -0. 6% 0. 4% – -65. 0% 2. 7% n/a 10 maxis berhad annual report 2010 Revenue RM’m 10,000 8,450 8,611 8,869 EBITDA and EBITDA margin RM’m 3. 8% 52. 1% 46. 7% 5,000 4,000 3,000 2,000 1,000 3,743 50. 4% 49. 8% 4,402 3,590 4,337 4,416 8,000 6,000 4,000 2,000 6,957 7,690 06 07 08 09 10 06 07(2) 08 09 10 Profit attributable to shareholders RM’m 2,500 2,000 1,500 1,000 500 2,105 1,980 2,400 2,232 2,295 Earnings per ordinary share Sen 35 28 21 14 7 28. 1 26. 4 32. 0 29. 8 30. 6 06 07(2) 08 09(3) 10(3) 06 07(2) 08 09(3) 10 notes (1) EBITDA is defined as profit before finance income, finance cost, taxation, depreciation and amortisation, allowance for write down of identified network costs and one time costs in relation to Maxis' listing and quotation exercise ("Listing"). 2) Includes a one-off Equivalent Cash Consideration charge of RM505 million, being options settlement cost arising from the privatisation and delisting of Maxis Communications Berhad. (3) Includes one-time costs of RM103 million comprising (i) the discount for shares issued to retail investors in relation to the Listing of RM53 million and (ii) the Listing and related expenses of RM50 million. (4) EBITDA margin is defined as EBITDA divided by revenue. (5) Profit before tax (PBT) margin is defined as PBT divided by revenue. 6) Profit after tax (PAT) margin is defined as PAT divided by revenue. (7) Interest cover ratio is defined as profit from operations divided by finance costs. (8) Basic earnings per ordinary share is defined as profit attributable to shareholders divided by 7,500 million shares. (9) Not applicable as there are no outstanding instruments convertible into new ordinary shares. maxis berhad annual report 2010 11 Corporate highlights oPeRAtInG PeRFoRMAnCe InDICAtoRs Operating Performance Indicators 2010 RM’m 2009 RM’m YOY %
Mobile Performance Indicators Number of mobile subscriptions (‘000) - Postpaid - Prepaid - Wireless broadband (1) - Total Monthly ARPU (RM) - Postpaid - Prepaid - Wireless broadband - Blended Average monthly MOU per subscription (minutes) (2) - Postpaid - Prepaid - Blended Capital Expenditure Total capital expenditure (RM’m) - Telecommunications network - Others - Total 1,289 155 1,444 2,673 10,687 594 13,954 104 36 68 50 357 124 172 2,711 9,316 264 12,291 -1. 4% 14. 7% ;100% 13. 5% 104 41 97 56 0% -12. 2% -29. 9% -10. 7% 372 117 175 -4. 0% 6. 0% -1. 7% 1,133 110 1,243 13. 8% 40. 9% 16. 2% otes (1) Defined as customers who have subscribed to data plans via a modem. (2) Average monthly MOU per subscription excludes roaming partner minutes but includes free minutes effective June 2007. 12 maxis berhad annual report 2010 Corporate highlights seGMentAL AnALYsIs Segmental Analysis 2010 RM’m 2009 RM’m YOY % Segment Revenue Mobile services Fixed line services International gateway services Other operations Total Segment Results (1) Mobile services Fixed line services International gateway services Other operations Total 3,282 48 9 4 3,343 3,070 23 28 (66) 3,055 (2) 6. 9% ;100% -67. % ;100% 9. 4% 8,279 185 405 8,869 8,005 187 419 8,611 3. 4% -1. 1% -3. 3% 3. 0% notes (1) Segment results represent profit before interest and taxation. (2) Includes one-time costs of RM103 million comprising (i) the discount for shares issued to retail investors in relation to the Listing of RM53 million and (ii) the Listing and related expenses of RM50 million. maxis berhad annual report 2010 13 Corporate highlights FInAnCIAL CALenDAR 31 May 2010 30 June 2010 17 september 2010 Announcement of the unaudited consolidated results for the first quarter and three months ended 31 March 2010.
Announcement of the first interim single-tier tax exempt dividend of 8. 0 sen per ordinary share in respect of the financial year ended 31 December 2010. Payment of the first interim singletier tax exempt dividend of 8. 0 sen per ordinary share in respect of the financial year ended 31 December 2010. Entitlement date for the second interim single-tier tax exempt dividend of 8. 0 sen per ordinary share for the financial year ended 31 December 2010. 15 July 2010 30 september 2010 15 June 2010 Payment of final single-tier tax exempt dividend of 3. 0 sen per ordinary share in respect of the financial year ended 31 December 2009.
Payment of the second interim single-tier tax exempt dividend of 8. 0 sen per ordinary share in respect of the financial year ended 31 December 2010. First Annual General Meeting. 30 August 2010 15 June 2010 Announcement of the unaudited consolidated results for the second quarter and six months ended 30 June 2010. Announcement of the second interim single-tier tax exempt dividend of 8. 0 sen per ordinary share in respect of the financial year ended 31 December 2010. Announcement of the unaudited consolidated results for the third quarter and nine months ended 30 September 2010.
Announcement of the third interim single-tier tax exempt dividend of 8. 0 sen per ordinary share in respect of the financial year ended 31 December 2010. 30 november 2010 Entitlement date for the first interim single-tier tax exempt dividend of 8. 0 sen per ordinary share for the financial year ended 31 December 2010. 28 June 2010 Entitlement date for the final singletier tax exempt dividend of 3. 0 sen per ordinary share for the financial year ended 31 December 2009. 14 maxis berhad annual report 2010 16 December 2010 15 March 2011 Entitlement date for the third interim single-tier tax exempt dividend of 8. sen per ordinary share for the financial year ended 31 December 2010. Entitlement date for the fourth interim single-tier tax exempt dividend of 8. 0 sen per ordinary share for the financial year ended 31 December 2010. 30 December 2010 30 March 2011 Maxis Annual General Meeting, June 2010 Payment of the third interim singletier tax exempt dividend of 8. 0 sen per ordinary share in respect of the financial year ended 31 December 2010. Payment of the fourth interim singletier tax exempt dividend of 8. 0 sen per ordinary share in respect of the financial year ended 31 December 2010. 28 February 2011 May 2011 Announcement of the unaudited consolidated results for the fourth quarter and for the financial year ended 31 December 2010. Announcement of the fourth interim single-tier tax exempt dividend of 8. 0 sen per ordinary share and proposed final single-tier tax exempt dividend of 8. 0 sen per ordinary share in respect of the financial year ended 31 December 2010. Notice of Annual General Meeting and issuance of Annual Report for the financial year ended 31 December 2010. 31 May 2011 Second Annual General Meeting. Menara Maxis, our headquarters in Kuala Lumpur maxis berhad annual report 2010 5 Corporate highlights AWARDs AnD ReCoGnItIon Marks of success World Communication Awards 2010 Top Five Best Mobile Operators Corporate nationhood Initiatives Award 2010 Corporate Nationhood Award Asia’s Best employer Brand Award Employer Branding Institute, CMO Asia & Strategic Partner CMO Council 2010 Putra Brand Awards 2011 PC. com Product Awards 2010 Best Postpaid Telco Best CSR sMI & sMe Worldwide network Communications Service Provider of the Year Reader's Digest trusted Brand Award Phone Service (Fixed Line/ Mobile) national Award for Management Accounting – nAfMA Excellence Award 2010 1th CCAM excellence Award 2010 Gold Award – Best In-House Contact Centre (Above 100 seats) in Malaysia Gold Award – Best CRM Programme Implementation (Open) in Malaysia Silver Award Mystery Shopper Results In-House Contact Centre Silver Award – Best Contact Centre Professional (Above 100 seats) Bronze Award – Best Contact Centre Team Leader (Open) Bronze Award – Best Contact Centre Professional (Over 100 seats) Bronze Award – Best Contact Centre Support Professional (Over 100 seats)
The People’s Choice Brand of the Year The People’s Choice Gold Communication Networks KLIFF Islamic Finance Awards 2010 Most Outstanding Islamic Finance Product -Maxis Islamic IPO US$3. 3 bil 16 maxis berhad annual report 2010 Multiple awards winner for outstanding service at the 11th CCAM Excellence Award 2010 Winner of Asia’s Best Employer Brand Award Computerworld Malaysia’s 4th Customer Care Awards 2010 Telecommunication Services the eDGe Billion Ringgit Club 2010 11th CCAM Prestige Award 2010 Corporate Social Responsibility Award
CMo Asia Awards for excellence in Branding & Marketing Asia’s Best Brand 2010 ”thebrandlaureate” the Grammy Awards for Branding Specialty Awards Best Brands in Brand Communications 2009-2010 south east Asia HR excellence Awards Employer of the Year 2010 Malaysian HR Awards 2010 Gold Award – HR Innovation Category Malaysia’s 100 Leading Graduate employers 2010 Most Popular Graduate Employer (Telecommunications) Asia HRD Congress 2010 Contribution to HR Community Award for Outstanding Contribution Towards Human Capital Development CCAM CMO CRM CSR HRD KLIFF SME SMI – – – – – – – –
Contact Centre Association of Malaysia Chief Marketing Officer Customer Relationship Management Corporate Social Reponsibility Human Resource Development Kuala Lumpur Islamic Finance Forum Small and Medium Enterprise Small and Medium Industry maxis berhad annual report 2010 17 Corporate highlights MILestones 2010 19 January 27 January 3 – 4 March UiTM wins Grand Prize for Maxis Mobile Content Challenge 2009 The Maxis Mobile Content Challenge (“MCC”) 2009, designed to present young students with an opportunity to develop content for mobile phones through a competition, came to a close.
Maxis awarded the grand prize for its MCC2009 competition to Team UTMobile from Universiti Teknologi Malaysia for its Flyer Composer application. Maxis launches Unity Solutions Maxis launched Unity Solutions, Malaysia’s first mobile unified communications service for Enterprise and SMEs. 8 February 20 January Maxis & LUCT in partnership Maxis entered into a partnership with LimKokWing University of Creative Technology ("LUCT") to enhance mobile learning at the tertiary level. This partnership was significant in that the use of the iPhone was incorporated into a university curriculum for the first time in Asia.
Maxis & Macro Lynx sign strategic agreement Licensed internet-related service provider Macro Lynx signed an agreement with Maxis to pursue a strategic collaborative relationship to provide ICT services to GTower, located in the Kuala Lumpur City Centre. Maxis expands 3G in Sabah and Sarawak Maxis pledged to build 180 new sites in Sabah and 125 new sites in Sarawak, for better network coverage of the Sabah and Sarawak population. These sites would expand 3G coverage in major towns in Sabah and Sarawak and improve network coverage in the areas of Nambawan, Sook and Sapulut in Sabah and Borneo Trunk Road between Sematan and Miri in Sarawak.
The expansion was subsequently completed in December 2010. Under the terms of the agreement, Maxis and Macro Lynx will provide a full suite of end-to-end solutions to tenants of GTower, including fixed voice, fixed data, IP services and Metro E business ethernet and internet. Partnering with LimKokWing University, a leading design and creativity in multimedia college Customers at the launch of Unity Solutions, the first mobile unified communications service Engaging with our customers at the S. H. E. pop concert 18 maxis berhad annual report 2010 6 March 13 March 3 May S. H.
E in Malaysia, courtesy of Hotlink Popular Taiwanese all-female group S. H. E. performed at Bukit Jalil Stadium to an audience of over 15,000 fans, which included 120 Maxis and Hotlink users. As part of the event sponsored by Hotlink, an autograph-signing session was arranged, which saw the participation of more than 1,000 fans, including 600 Hotlink and Maxis customers. Reaching out to the visuallyimpaired Maxis reached out to the visuallyimpaired community by hosting a gathering to demonstrate the attributes of its new iPhone 3GS to members of the Malaysian Association of the Blind.
Special introductory packages were made available to this group. Android™ handset launch Maxis introduced five Android™ handset models, representing the entire Android™ range, to our customers. The models were the Samsung Galaxy i7500, the HTC Legend, the LG GW620, the Motorola Milestone and the Sony Ericsson Xperia X10. They were packaged cost-effectively with Maxis’ Value Plans. 6 April 6 May 10 March Maxis launches Mobile Jukebox & Love Meter apps The Mobile Jukebox and Love Meter applications were launched as a music content platform and a communications platform respectively.
Both applications were Maxis and Hotlink innovations and extended our range of value-added mobile services to our subscribers. Slogan winners enjoy Adam Lambert The 10 winners of Maxis’ SMS Slogan Competition, held from 1 to 5 March, enjoyed a performance by American Idol’s Adam Lambert at Universal Studios Singapore. 15 April 11 March Mission Possible with Maxis Maxis launched Maxis Mission Possible, a Facebook interactive social game, in collaboration with Integricity Corporation Sdn Bhd.
The application, an online treasure hunt with impressive prizes for those completing it in the shortest time, was an extension of our Something for Everyone campaign. Lotus Racing iPhone app introduced Maxis launched the Lotus Racing iPhone application. Available by free download to Maxis iPhone users, the application provided updates for Lotus Racing and F1 races in 2010, as well as live commentary. Going east with broadband coverage Broadband coverage was extended into the East Coast states of Kelantan, Terengganu and Pahang.
Major towns in those regions brought under Maxis broadband coverage included Bachok, Panji, Pasir Mas and Peringat in Kelantan; Bentong, Kuantan and Temerloh in Pahang; and Chukai, Dungun, Kuala Berang and Kerteh in Terengganu. 10 May 25 April Micro SIM launch The micro SIM was introduced, allowing Maxis’ 12 million customers to fully experience next-generation smart devices. The micro SIM is smaller in size than standard GSM SIM cards. Kelly Clarkson in Malaysia, courtesy of Hotlink Hotlink brought Kelly Clarkson, another American Idol alumnus, to perform in Malaysia on 25 April 2010 to an audience of 16,000 fans.
Of these, 180 were Maxis and Hotlink customers who had won tickets to the concert. Maxis and Hotlink customers were also given the chance to get 30% off Kelly Clarkson tickets by downloading the special Clarkson Ringtone Package introduced in the run-up to the concert. Launch of Lotus Racing iPhone application for Formula One racing fans maxis berhad annual report 2010 19 Corporate highlights 2 June MILestones 2010 Continued A White Beauty Maxis introduced the BlackBerry™ White Beauty mobile device to Malaysia. 3 June 14 May 19 May
Partnering with Tenaga Maxis signed an agreement with Tenaga Nasional Berhad to utilise the latter’s existing infrastructure for the delivery of Maxis’ fibre optic services, thereby broadening our data access. Maxis & PayPal in strategic collaboration Maxis and PayPal announced plans for a strategic collaboration to introduce the Maxis-PayPal Account, specifically adapted for use by Maxis customers. It was the first time a mobile network operator and an online payment service provider joined forces to extend value-added services for mobile subscribers. In the news with network modernisation investments Maxis announced an investment of RM1. billion in financial year 2010 in the modernisation and expansion of our network to provide our 12 million customers with improved service and to cater to the growing demand for next generation products and services. 10 June This account would allow Maxis users to pay their bills either online or through their mobile devices and to shop safely online from within or outside Malaysia. 21 – 29 May 17 May East Coast city gets Maxis Centre The first Maxis Centre for the East Coast was launched in Kuala Terengganu, to reinforce our commitment to this new market.
Youth football tournament 'Cabaran Piala Maxis', a football tournament for youths in the East Coast states of Kelantan, Terengganu and Pahang, was held over nine days. It attracted 32 teams and the finals were played out on 29 May. Football fans get more from Maxis Maxis kicked off its mobile services for the FIFA World Cup 2010 in Malaysia. Matches were streamed online to Maxis and Astro subscribers. Our customers also enjoyed innovative and exclusive 2010 FIFA World Cup applications and services online and through their mobile devices.
Maxis achieved a first as the only mobile provider to offer full-match replays online. 15 June AGM 2010 Maxis held its Annual General Meeting for Shareholders for the financial year 2009. 17 June Reaching out to customers with the first Maxis Centre in Kuala Terengganu Bringing FIFA World Cup 2010 to the nation Pilot money-transfer service launched Maxis and Western Union, the global money-transfer service, launched a pilot money-transfer service whereby Maxis and Hotlink subscribers can send money to any of the more than 370,000 Western Union agent locations worldwide online. 0 maxis berhad annual report 2010 22 June 16 July 12 August Good Deals with MyDeals MyDeals, a next generation Permission-Based Mobile Advertising platform, was launched by Maxis and Out There Media, a mobile advertising global leader. Through MyDeals, subscribers can receive information about brands, products, offers and promotions in real time. The platform also provides brand and media agencies in Malaysia and across the region with a cost-effective and measurable advertising medium.
Finding your way FINDER301, Malaysia’s first locationbased mobile directory that allows Maxis customers to locate and share information, was officially launched. 20 July Hotlink commemorates Ramadhan Hotlink rolled out several packages to commemorate the holy month of Ramadhan. Free Ramadhan mobile content, such as breakingfast times, were automatically included in the packages. 25 June A Galaxy from Maxis Maxis offered its customers the new Samsung Galaxy S, packaged with introductory offers, at a low price.
Winning Gold at the Human Resource Awards Maxis received the Gold Award (Innovation Category) at the Malaysian Human Resource Awards 2010 event from the Minister for Human Resources, Datuk Dr. S Subramaniam. This award was given in recognition of our innovation in transformational learning through the Maxis Academy. 19 August 29 July 25 June BlackBerry™ goes Prepaid Hotlink introduces prepaid BlackBerry™ mobile packages. Huawei awarded contract for Next-Generation internet network Maxis awarded Huawei with a full-service Next-Generation HighSpeed internet network contract.
Under the contract terms, Huawei will deliver an end-to-end turnkey services package to include holistic optical distribution networks, network designs and network construction management. Huawei would also be Maxis’ exclusive supplier for a Next-Generation HighSpeed internet network. LTE field trials commence Maxis’ Long-Term Evolution (“LTE” or 4G) field trials commenced in collaboration with our technology partners Alcatel-Lucent and Huawei. 5 August 12 July [email protected] Star Business Awards Maxis participates as a presenter in The Star Business Awards.
Managing money on the go The MHO Mobile Financial Service, jointly developed by Maxis and unit-trust company MAAKL, was launched. First debuted on 10 July to a group of MAAKL privilege members, the MHO Mobile service enables MAAKL investors to manage the performance of their unit-trust investments using their mobile devices, in real time. FINDER301, the first location-based mobile directory, is launched maxis berhad annual report 2010 21 Corporate highlights 24 september MILestones 2010 Continued iPhone4 in Malaysia The iPhone4™ was launched in Malaysia by Maxis. 5 october 29 August 7 september Celebrating Hari Raya with the community Maxis celebrated Hari Raya Aidil-Fitri with underprivileged communities from seven charitable institutions in an open house event in true Malaysian tradition. More Android™ offerings from Maxis Maxis launched the HTC Wildfire and Sony Ericsson Xperia X10 Mini, the ‘second wave’ of Android™ phone offerings. Handy Doctor Maxis launched Pocket Doctor, the new mobile-based health portal, at lifestyle fair Epicure Malaysia 2010. Pocket Doctor is the world’s first mobile-based health reference service offered on multiple platforms. 12 october
HD7 in Malaysia The HTC HD7 was offered to Maxis subscribers. 3 september 22 september Excellence Awards for high achievers Under the Maxis Scholarship for Excellence Programme, 29 young high achievers received scholarships to continue their studies at overseas tertiary institutions. The awards were presented jointly by the Deputy Minister of Information Communications and Culture Malaysia, Dato’ Joseph Salang, and Maxis CEO, Mr. Sandip Das. 18 october Rollout of Maxis 1Store Launch of Maxis 1Store, Malaysia’s first online store offering over 1,200 applications to customers and content developers. 4 september Unity Conferencing launched Unity Conferencing, an innovative communications tool developed by Maxis for the Malaysian courts, was launched to help streamline communication between lawyers and registrars and provide more effective case management. Surf the skies with Maxis Maxis partners Air Asia and Onair on a trial basis to offer seamless inflight voice and data roaming to their customers on selected Air Asia aircrafts. 19 october One platform with Maxis ONEMusic In yet another busy month for Maxis, the ONEMusic platform was launched at a celebrity-studded musical event. The latform was designed to allow simple and extensive access to music in four languages (Bahasa Malaysia, English, Chinese and Tamil). Another first: launch of the much anticipated iPhone4 in Malaysia Hosting a Hari Raya Open House for underprivileged communities 22 maxis berhad annual report 2010 21 october 24 november 14 December Samsung Galaxy Tab Launch Maxis and Samsung Malaysia jointly launched the Samsung Galaxy Tab GT-P1000, the first Android™ tablet in Malaysia. HD7 for priority customers The HTC HD7 was introduced to priority customers at a prestigious event hosted in the Kuala Lumpur City Centre. 28 october 1 December
Maxis sweeps CRM Awards A total of eight awards were presented to Maxis at the 11th Customer Relationship Management and Contact Centre Association 2010 Annual Awards event, recognising our achievements in customer service and contact-centre operations. 29 october Students from the ASEAN region at our CyberKids camp Together with the Ministry of Information Communications and Culture Malaysia and the Malaysian Communications & Multimedia Commission, Maxis hosted 91 ASEAN students between the ages of 13 and 16 years and their teachers at the CyberView Lodge and Spa in Putrajaya under our continuing Maxis Asean Cyberkids initiative.
Maxis and TM ink landmark agreement Maxis Broadband Sdn Bhd and Telekom Malaysia Berhad ("TM") signed a landmark 10-year agreement to provide Maxis with enhanced data access. The agreement provides for Maxis to leverage on TM's extensive HSBB network, initially to reach more than 700,000 homes, with potential to grow to 1. 3 million homes by the end of 2012. On this day, Maxis also announced that it would be extending broadband coverage to Sabah at an investment cost of RM80 million, to ensure wireless broadband services are available to the towns of Labuan, Keningau, Sandakan, Lahad Datu and Tawau.
On Safari with Maxis More than 3,200 Maxis staff participated in the annual Safarithemed Family Day. 3 December 15 – 16 December 19 november Maxis at the World Communication Awards Maxis was one of the top five finalists for the Best Mobile Operator Award at the World Communication Awards 2010. We were the only Malaysian company to be nominated for this prestigious award. Maxis is Employer of the Year Maxis wins the Employer of the Year Award from the South East Asia HR Excellence Awards 2010 in Kuala Lumpur, in recognition of our best practices in Human Resource Management.
Offering a hand to flood victims Maxis’ initiatives to assist flood victims in the states of Kelantan and Kedah respectively were executed over this period. We donated motorboats for use as rescue vehicles to the Kelantan Fire Department and extended our hospitality under a Sehari Bersama Maxis (“A Day with Maxis”) programme in Jitra, Kedah. 31 December A milestone in network coverage expansion Our coverage of the population reached a record 76% with 3G/ HSPA technology. Launch of the ONEMusic platform, designed for access to music in four languages Donating motorboats for flood rescue operations in Kelantan maxis berhad annual report 2010 3 toDAY Is ALWAYs In toUCH Outoftownnolongermeansoutoftouch. even remote communities can hop on the internetsuperhighwayandgetconnected. Nomatterhowfarapart,wearehereto maketheworldfeelcloser. 24 maxis berhad annual report 2010 maxis berhad annual report 2010 25 Corporate profile CoRPoRAte stRUCtURe as at 5 april 2011 100% Maxis Mobile Sdn Bhd 100% Maxis Mobile (L) Ltd 100% Maxis Broadband Sdn Bhd 100% Maxis Online Sdn Bhd 100% Maxis International Sdn Bhd 100% Maxis Asia Access Pte Ltd MAXIs BeRHAD 100% Maxis Mobile Services Sdn Bhd 75% Advanced Wireless Technologies Sdn Bhd 100% UMTS (Malaysia) Sdn Bhd 100% Maxis Collections Sdn Bhd 100%
Maxis Multimedia Sdn Bhd note The above structure represents Maxis Berhad and its subsidiaries. Please refer to pages 178 and 179 for principal activities of the subsidiaries. 26 maxis berhad annual report 2010 Corporate profile CoRPoRAte InFoRMAtIon Board of Directors Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda Chairman / Independent Non-Executive Director Robert William Boyle Independent Non-Executive Director Dato’ Mokhzani bin Mahathir Independent Non-Executive Director Asgari bin Mohd Fuad Stephens Independent Non-Executive Director Ghassan Hasbani Non-Executive Director Dr. Zeyad Thamer H. AlEtaibi Non-Executive Director Dr.
Fahad Hussain S. Mushayt Non-Executive Director Augustus Ralph Marshall Non-Executive Director Chan Chee Beng Non-Executive Director Sandip Das Chief Executive Officer / Executive Director Company Secretary Dipak Kaur (LS 5204) Auditors Pricewaterhouse Coopers Level 10, 1 Sentral Jalan Travers Kuala Lumpur Sentral 50710 Kuala Lumpur Malaysia Tel : +603 2173 1188 Fax : +603 2173 1288 Share Registrar Symphony Share Registrars Sdn Bhd Level 6, Symphony House Block D13, Pusat Dagangan Dana 1 Jalan PJU 1A/46 47301 Petaling Jaya Selangor, Malaysia Tel : +603 7841 8000 Fax : +603 7841 8008 Registered Office Maxis Berhad (Company No. 67573-A) Level 18, Menara Maxis Kuala Lumpur City Centre Off Jalan Ampang 50088 Kuala Lumpur Malaysia Tel : +603 2330 7000 Fax : +603 2330 0590 Website : www. maxis. com. my e-mail : [email protected] com. my Investor Relations and Enquiries Tel : +603 2330 7000 Stock Exchange Listing Main Market of Bursa Malaysia Securities Berhad Listed since 19 November 2009 Stock Code : 6012 Enquiries/Assistance Toll-Free Number : 1 800 828 001 Valid from 9 May 2011 to 1 June 2011 Only pertaining to Form of Proxy and matters relating to the Second Annual General Meeting maxis berhad annual report 2010 27
Corporate profile BoARD oF DIReCtoRs 01 02 Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda Chairman Independent Non-Executive Director Robert William Boyle Independent Non-Executive Director 03 04 Dato’ Mokhzani bin Mahathir Independent Non-Executive Director Asgari bin Mohd Fuad Stephens Independent Non-Executive Director 28 maxis berhad annual report 2010 05 06 Ghassan Hasbani Non-Executive Director Dr Zeyad Thamer H. AlEtaibi Non-Executive Director 07 08 09 Dr. Fahad Hussain S. Mushayt Non-Executive Director Augustus Ralph Marshall Non-Executive Director Chan Chee Beng Non-Executive Director 0 Sandip Das Chief Executive Officer Executive Director maxis berhad annual report 2010 29 Corporate profile BoARD oF DIReCtoRs PRoFILes 01 Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda Chairman / Independent Non-Executive Director Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda, aged 64, a Malaysian, was appointed as Chairman and Director of Maxis on 16 October 2009. He is presently a Director of Khazanah National Berhad, Yayasan DayaDiri and Yayasan Amir. Raja Arshad is also the Chairman of Binariang GSM Sdn Bhd, Ekuiti Nasional Berhad and Yayasan Raja Muda Selangor.
He is also the Chancellor of University Selangor. He is the former Executive Chairman and Senior Partner of Pricewaterhouse Coopers (“PwC”) Malaysia and former Chairman of the Leadership Team of PwC Asia 7. He was also formerly the Chairman of the Malaysian Accounting Standards Board and Chairman of Danamodal Nasional Berhad. His previous international appointments include being a member of the PwC Global Leadership Team, a member of the PwC Global IFRS Board and a member of the Standards Advisory Council of the International Accounting Standards Board.
His previous public appointments include being a member of the Securities Commission, a member of the Malaysian Communications and Multimedia Commission, a member of the Investment Panel of the Employees Provident Fund and a member of the Board of Trustees of the National Art Gallery. He is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of the Malaysian Institute of Accountants. He is also a member of the Malaysian Institute of Certified Public Accountants and served on its council for 24 years, including three years as its president. He sits as Chairman of the Nomination Committee. 30 axis berhad annual report 2010 02 Robert William Boyle Independent Non-Executive Director Robert William Boyle, aged 63, a British citizen, was appointed as a Director of Maxis on 17 September 2009. He is a retired Senior Partner of Pricewaterhouse Coopers ("PwC") London in the UK, with experience in leading and participating in global teams on client and PwC projects. He specialised in audits and deal-related advice to multi-nationals and held a variety of management positions including Chairman of the Entertainment and Media Industry Group for Europe, Middle East and Africa and the UK Telecommunications Industry Group.
He is a Director of Witan Investment Trust plc, Prosperity Voskhod Fund Limited, Centaur Media plc and Schroder AsiaPacific Fund plc. He is also an Independent Member of the audit committee of the National Trust. Prior to PwC London, he was also a Partner of Coopers & Lybrand, Tanzania from 1979 to 1982. He was seconded to the UK Civil Service as company analyst under the Price Commission in 1976. From 1972 to 1974, he was seconded to Coopers & Lybrand in Paris following qualification in London. He holds a Masters of Arts in Law from Oxford and is a Fellow of the Institute of Chartered Accountants of England and Wales.
He sits as Chairman of the Audit Committee and is a member of the Remuneration and Nomination Committees. 03 Dato’ Mokhzani bin Mahathir Independent Non-Executive Director Dato’ Mokhzani bin Mahathir, aged 50, a Malaysian, was appointed as a Director of Maxis on 16 October 2009. He started working in 1987 as a wellsite operations engineer with Sarawak Shell Berhad and resigned in 1989 to pursue business opportunities in Kuala Lumpur. By investing in Tongkah Holdings Berhad (listed on the then Kuala Lumpur Stock Exchange), he ventured into the component manufacturing, oil and gas, finance and healthcare sectors.
He held positions as the Group Chief Executive Officer of Pantai Holdings Berhad (healthcare), Chairman of THB Industries Berhad (electronics) and Group Executive Chairman of Tongkah Holdings Berhad (oil and gas, finance). A divestment exercise in 2001 saw him relinquish all positions and equity in these companies. Presently his portfolio of investments includes businesses in IT, oil and gas support services, structural steel engineering and fabrication, the automotive sector and property development. He leads Kencana Petroleum Berhad and its group of companies and holds the franchise or Porsche automobiles in Malaysia. He is currently the Chairman of Sepang International Circuit Sdn Bhd, which hosts the FIA Formula One World Championship and is a regular GT race car driver. He also serves as Non-Executive Director on the Boards of Opcom Holdings Berhad and is a Director of the Royal Automotive Club of Malaysia. He is a qualified Petroleum Engineer. He pursued his tertiary education at the University of Tulsa, Oklahoma in the USA, where he graduated with a Bachelor of Science in Petroleum Engineering.
He sits as Chairman of the Remuneration Committee and is a member of the Audit and Nomination Committees. maxis berhad annual report 2010 31 Corporate profile BoARD oF DIReCtoRs PRoFILes Continued 04 Asgari bin Mohd Fuad Stephens Independent Non-Executive Director Asgari bin Mohd Fuad Stephens, aged 50, a Malaysian, was appointed as a Director of Maxis on 16 October 2009. He is a Director and founding member of Intelligent Capital Sdn Bhd (“Intelligent Capital”). He is the Chairman and an independent Non-Executive Director of Mudajaya Group Berhad.
He also serves as NonExecutive Director on the boards of JayCorp Berhad (formerly known as Yeok Aik Resources Berhad) and Privasia Technology Berhad. He has extensive experience in both public and private equity investing in Malaysia. He has been involved in several start-up companies as an angel investor and has been actively involved in building their businesses as mentor. A number of these companies have gone public. He started his career working in general management in companies involved in a wide range of industries. He joined Usaha Tegas Sdn Bhd (“UTSB”) in 1988 where he worked in various capacities.
He left in 1990 to join the stockbroking industry. He returned to work in UTSB in 1992 before leaving in 1995 to co-found Kumpulan Sentiasa Cemerlang Sdn Bhd (“KSC”), an investment advisory and fund management group. He took a year off to work with the National Economic Action Council (“NEAC”) in 1998. After his period at the NEAC, he started two venture capital firms, Intelligent Capital and iSpring Venture Management Sdn Bhd, while continuing to work with KSC. He was previously the Chairman of the Malaysian Venture Capital Association.
He holds a Bachelor of Commerce (Honours) from the University of Melbourne in Australia and a Masters of Business Administration from Cranfield University in the UK. He is a member of the Audit and Remuneration Committees. 05 Ghassan Hasbani Non-Executive Director Ghassan Hasbani, aged 38, a British citizen, was appointed as a Director of Maxis on 25 September 2009. He is the Chief Executive Officer of the International Operations group of Saudi Telecom Company ("STC"). He joined STC from the global management consulting firm Booz & Company, where he led the firm’s Middle East Communications and Technology practice.
He has more than 16 years of experience with telecom operators in the Middle East, Asia, Europe and Africa. He brings a wide spectrum of capabilities covering all aspects of the telecommunications industry including investment strategies, mergers and acquisitions, post merger integration, marketing, product and service development, organisational restructuring and governance, technology plans, retail and distribution, channel strategy and management, customer care, business development and Chief Financial Officer and Chief Executive Officer agendas.
He has worked with leading organisations in the telecommunication and technology industries, including Nortel Networks and Cable & Wireless and spent the past 10 years operating within the Middle East Region. In addition to the Middle East, his global experience includes markets such as Europe, South East Asia, Africa and Latin America. He is the President Commissioner of PT Natrindo Telepon Seluler in Indonesia and Vice Chairman of Viva Bahrain BSC (C) in Bahrain.
He also serves on various Boards of Directors, including MCB (the holding company of Maxis), Binariang GSM Sdn Bhd, BGSM Capital Sdn Bhd, Kuwait Telecom Company in Kuwait, Turk Telecom and OJER TELEKOMuNIKASYON ANONIM SIRKETI in Turkey. c He holds a Masters of Business Administration from Hull University in the UK and a Bachelor of Engineering with first class honours from the University of Westminster in the UK. He is also a Chartered Engineer and a member of the Institution of Engineering and Technology in the UK. He is a member of the Nomination and Remuneration Committees. 32 maxis berhad annual report 2010 07
Dr. Fahad Hussain S. Mushayt Non-Executive Director Dr. Fahad Hussain S. Mushayt, aged 42, a Saudi citizen, was appointed as a Director of Maxis on 25 September 2009. He is the head of the Strategic Investment Unit of Saudi Telecom Company ("STC"). He joined STC in October 2000 as a Senior Business Analyst in corporate planning and has held the positions of Capital Allocation Project Manager, Balanced Scorecard Project Manager and Concept Controlling Manager. Before assuming his current position at STC in July 2004, he was the Strategic Planning Director and Business Development Director at STC since December 2001.
He has served as a Vice President of the Telecom Development Advisory Group of the International Telecommunications Unit (“ITU”). He serves on various Boards of Directors, including MCB (the holding company of Maxis), PT Natrindo Telepon Seluler in Indonesia and Saudi Telecom Investment Commercial Company in Saudi Arabia, Gulf Digital Media Holding BSC (C) in Bahrain, Gulf Allied Digital Media FZ LLC in Dubai, STC Turkey Holding Ltd in the British Virgin Islands, Aircel Limited in India, Dishnet Wireless Limited in India, Contact Center Company LLC in Saudi Arabia and Arabian Internet & Communications Services provider Co.
Ltd. in Saudi Arabia. He holds a Bachelor of Science degree in Operations Research from King Saud University, Riyadh in Saudi Arabia. He holds a Master of Science Degree in Economics from California State Polytechnic University, Pomona in the USA and obtained his Doctorate of Philosophy in Political Economy and Public Policy from the University of Southern California, Los Angeles in the USA. He has also completed a variety of management programmes from INSEAD in France, London Business School in the UK and Stanford University in the USA. He is a member of the Audit Committee. 06 Dr Zeyad Thamer H.
AlEtaibi Non-Executive Director Dr Zeyad Thamer H. AlEtaibi, aged 49, a Saudi citizen, was appointed as a Director of Maxis on 10 February 2011. He is the Vice President - Network Sector of Saudi Telecom Company ("STC"). In his current position, he provides continuous leadership to large-scale teams through setting of strategies, coaching of direct reports, enhancing the sector’s intellectual capital and providing direction, aggressive goals and objectives to the organisation. As a Saudi Telecom executive officer, he is responsible for the successful and expedient launch of STC’s two affiliates in Kuwait and Bahrain.
He has more than 20 years' experience in the telecommunications service provider Industry and is proficient in all major aspects of a Telecom Service Provider, through progressive promotions from Director to General Manager to Vice President within the Wireless and Wireline Business units. As Vice President of STC's Network Sector, he has expanded their fixed and broadband network to be the largest in the Middle East. He serves as a Director on various Boards of Directors, including MCB (the holding company of Maxis), PT Natrindo Telepon Seluler (Indonesia) and Viva Bahrain.
In addition, he is the Vice-Chairman of Viva Kuwait where he also serves as the Chairman of the Executive Committee. He holds a Bachelor of Science in Engineering in year 1985 and a Master’s Degree in Engineering in year 1992 from King Saud University, Riyadh in Saudi Arabia and obtained his Doctorate in Mobile Communications from the University of Bradford in the United Kingdom in 1996. He has also completed a variety of management programmes from Japan, Project Management Development at Harvard University in USA and attended multiple forums and international conferences such as ITU, TM-Forum and GSM Mobile World, among others. axis berhad annual report 2010 33 Corporate profile BoARD oF DIReCtoRs PRoFILes Continued 08 Augustus Ralph Marshall Non-Executive Director Augustus Ralph Marshall, aged 59, a Malaysian, was appointed as a Director of Maxis on 7 August 2009. He has more than 30 years of experience in financial and general management. He is an Executive Director of UTSB, a Director and Chief Executive Officer of ASTRO Holdings Sdn Bhd group and an Executive Director of Tanjong Public Limited Company, in which UTSB has significant interests.
He also serves as a Non-Executive Director on the Boards of Directors of several other companies in which UTSB also has significant interests viz. MCB (the holding company of Maxis) and Johnston Press plc (listed on the London Stock Exchange plc). In addition, he is also a Director in an independent non-executive capacity and the Chairman of the Audit Committee of KLCC Property Holdings Berhad (listed on the Bursa Securities) and a Non-Executive Director of MEASAT Global Berhad.
He is an Associate of the Institute of Chartered Accountants in England and Wales and a member of the Malaysian Institute of Certified Public Accountants. He is a member of the Remuneration Committee. 09 Chan Chee Beng Non-Executive Director Chan Chee Beng, aged 55, a Malaysian, was appointed as a Director of Maxis on 7 August 2009. He has more than 30 years' experience in investment banking, financial management and accounting including stints with Ernst & Young and Morgan Grenfell & Co. Ltd prior to joining the UTSB Group in 1992 as head of corporate finance.
He is presently an Executive Director of UTSB and serves on the Boards of Directors of several other companies in which UTSB has significant interests, viz. Sri Lanka Telecom PLC (listed on the Colombo Stock Exchange), Bumi Armada Berhad and MCB (the holding company of Maxis). He is also a Director in a non-executive capacity and a member of the Audit Committee of MEASAT Global Berhad. He holds a Degree in Economics and Accounting from the University of Newcastle-upon-Tyne in the UK and is a Fellow of the Institute of Chartered Accountants in England and Wales.
He is a member of the Audit and Nomination Committees. 34 maxis berhad annual report 2010 10 Sandip Das Chief Executive Officer / Executive Director Sandip Das, aged 53, an Indian citizen, was appointed as Chief Executive Officer of Maxis on 1 October 2009. He became a Director of Maxis on 17 September 2009. He joined Maxis Communications Berhad ("MCB") in January 2007 as CEO. Prior to joining MCB, he was Deputy Managing Director and a Director on the Board of Hutchison Essar Limited (now known as Vodafone Essar Limited, India), one of India’s largest mobile operators.
He joined Hutchison Essar, then known as Hutchison Max Telecom and started that company’s operations in India in 1994. Subsequently, he oversaw the launch of the Orange brand in India in the year 2000 and later the brand Hutch in 2003. Internationally, he is a Board member of Bridge Mobile Pte Ltd, a strategic alliance of 11 regional telecommunications providers. He also serves on the Boards of Directors of Sri Lanka Telecom PLC and Mobitel (Private) Limited in Sri Lanka.
In addition, he serves as a Director on the Boards of Directors of MCB, Aircel Limited and Dishnet Wireless Limited in India. He has 33 years of work experience in the consumer durables, automobile and telecommunications industries. Prior to working at Hutchison Essar Limited, he spent 5 years as franchise head of Al Futtaim Motors, the Toyota franchise of the Al Futtaim Group, in Dubai, UAE and 10 years with the Indian consumer durables giant Usha International, Shriram Group, where he started as a management trainee and left as Joint Divisional Manager.
He holds a Masters of Business Administration degree from the Faculty of Management Studies, University of Delhi in India and a Bachelor’s degree in Mechanical Engineering from Regional Engineering College (National Institute of Technology), Rourkela in India. notes 1. The total number of Board meetings held during the financial year ended 31 December 2010 was eight. The number of Board Meetings attended by the Directors in the financial year are set out on page 94 of this Annual Report. None of the Directors have any family relationships with any directors and / or major shareholders of the Company.
None of the Directors have any conflict of interest with the Company. None of the Directors have any convictions for offences within the past 10 years. None of the Directors have any sanctions and / or penalties imposed on them by any regulatory bodies during the financial year ended 31 December 2010. For information on other directorships of public companies, please refer to their respective profiles. 2. 3. 4. 5. 6. maxis berhad annual report 2010 35 36 maxis berhad annual report 2010 BusinessReview CHAIRMAn’s stAteMent
Raja tan sri Dato’ seri Arshad bin Raja tun Uda Chairman / Independent Non-Executive Director Dear Shareholders, Last year’s Annual Report noted the successful listing of your Company Maxis Berhad (“Maxis”) on Bursa Malaysia Securities Berhad. Since then, we have invested significantly in infrastructure, people, commercial partnerships and subscriber relationships to secure our growth and evolution. It has been a year of continuing market leadership and corporate transformation to position ourselves for a sustainable future.
At the end of 2010, we had strengthened our core mobile business and continued our lead over our competitors in terms of revenue, market share, subscription base and EBITDA margins. Maxis is the only player in its market providing both mobile and fixed services, voice and data, while moving towards offering a full suite of future services to include advanced data services. Our performance was steered by a collective focus to leverage our existing business as we began the transition towards becoming a premier integrated communications service provider.
Our efforts have borne fruit as was evident in another encouraging year for your Company. It is my pleasure on behalf of the Board of Directors to present the Annual Report for Maxis for the year ended 31 December 2010. operating environment The macro-economic environment in 2010 improved over 2009, a year during which performance of global financial markets affected Asian economies. Against the negative 1. 7% recorded previously, the Malaysian economy grew strongly in 2010, registering a growth rate of 7. 2%. Growth was fuelled by high private consumption and sustained public sector spending.
Nevertheless, the Malaysian telecommunications industry attracted many new entrants in the year under review, including in the broadband sector. This, coupled with intense competition among existing players, reflected the increasingly challenging operating environment. Consumers continued to show a strong appetite for mobile internet services and content as well as smartphones and tablets. The changing landscape has implications for our business model with increased pressure on margins. maxis berhad annual report 2010 37 BusinessReview CHAIRMAn’s stAteMent Continued Financial Performance
Save for the Consolidated Statement of Financial Position, the comparatives presented in the financial statements on pages 123 to 218 are not comparable because of the accounting treatment adopted for the business combination of Maxis which was completed on 1 October 2009. Consequently, the comparative results referred to in this Annual Report other than in the audited financial statements (including references to revenue, EBITDA and profit after taxation) are presented on a pro forma basis as if the Malaysian businesses had been acquired by Maxis from its holding company on 1 January 2006.
We brought the year to a close with revenues of RM8. 869 billion, EBITDA of RM4. 416 billion and profits after tax (“PAT”) of RM2. 295 billion. Our subscription base increased to 13. 95 million mobile subscriptions, representing a growth of 13. 5% over 2009. The prepaid base reached 10. 69 million subscriptions including growth from under-served markets. We also recorded significant improvements in wireless broadband and non-voice or data revenues. At year end, we had gained a 42% revenue market share(1) and achieved the largest 3G footprint covering 76% of the population.
Meanwhile, we invested RM1. 444 billion to enhance our telecommunications network and support infrastructure to continually improve our coverage and the quality of our service. Dividends The Board of Directors is pleased to recommend for shareholders’ approval at the forthcoming Annual General Meeting a single-tier tax-exempt final dividend of 8. 0 sen per ordinary share in respect of the financial year ended 31 December 2010. The four interim dividends paid and the recommended final dividend will bring the total dividend for 2010 to 40. 0 sen. If pproved, your Company would have declared and delivered a total of 55. 0 sen in cumulative dividends since the IPO, amounting to a net payout of RM4. 125 billion to shareholders. The Company will continue to adopt a progressive dividend policy which seeks, through active capital management, to return to shareholders excess cash not required to support its business needs after taking into account available reserves, short and longer-term capital requirements and market conditions. (1) Among top 3 operators in Malaysia based on published results 38 axis berhad annual report 2010 in building an institution of talented individuals, wedesiretocultivatethebehaviouralattributes of leadership among our teams in order to sustain our industry lead. Corporate Governance The Board is committed to upholding and implementing the highest standards of corporate governance and international best practices throughout the length and breadth of our business. Details of our corporate governance initiatives and the internal control policies we employ are detailed in the relevant sections of this Annual Report.
Additionally, together with KPKK and the Malaysian Communications and Multimedia Commission (“SKMM”), we played a part in developing Malaysia’s content industry through the annual Maxis Mobile Content Challenge whereby students are encouraged to deliver creative mobile content applications. We also continued to fulfil our role in helping the Malaysian government achieve higher broadband penetration across the country. Corporate Responsibility Human Capital Development Maxis recognises that good corporate responsibility (“CR”) practices create long-term value for our hareholders and other stakeholders. During the year under review, we fulfilled our commercial objectives towards our shareholders while meeting our stakeholder expectations for responsible business practices across a wide spectrum of our activities. Our CR initiatives in the workplace, marketplace and the environment continued as part of our wider obligations to our stakeholder communities, of which staff, customers, local communities and the nation are a part.
Once again we provided opportunities for knowledge acquisition through our annual Maxis Scholarship for Excellence programme and helped bridge the digital divide via our flagship Maxis Cyberkids programme in collaboration with the Ministry of Information Communications and Culture of Malaysia (“KPKK”). Sourcing of talented professionals globally continued with greater vigour in 2010. In early 2011, we began collaborating with institutions such as TalentCorp Malaysia to attract globally-competitive Malaysians to return home to serve.
While we recognise the benefits that ethnic diversity brings to our pool of talent, we are committed to developing Malaysian professionals. We also recognise the role that women and younger professionals can play in introducing greater diversity and vitality respectively into the Company. In building an institution of talented individuals, we desire to cultivate the behavioural attributes of leadership among our teams in order to sustain our industry lead. The Maxis Academy helps upgrade our pool of skills through leadership training, industry exposure and professional development. maxis berhad annual report 2010 9 BusinessReview CHAIRMAn’s stAteMent Continued outlook and Prospects We remain motivated to deliver shareholder value through performance enhancement, investments to secure sustainable future revenue streams and prudent financial management. Malaysia’s GDP growth is projected to moderate to 5. 2% in the current year led by domestic demand as consumer confidence and economic fundamentals remain strong. The telecommunications industry in Malaysia and the region is expected to face challenges in 2011 from a maturing voice market, fibre roll-out, new technologies including LTE and increasing customer expectations.
With national broadband penetration accelerating and the attractive demographics providing opportunities for growth, we at Maxis will continue to be focused on our customers and meeting their needs through our relationships, product innovations and service enhancements. Our strategy for 2011 is three-pronged: to maximise our voice business; to secure data access leadership and penetration; and to deliver products and services beyond telecommunications.
In executing this plan, we remain motivated to deliver shareholder value through performance enhancement, investments to secure sustainable future revenue streams and prudent financial management. 40 maxis berhad annual report 2010 42 Acknowledgements By year end, we had also consolidated our industry leadership with a 42% revenue market share In 2010, we were among the Top 5 mobile operators in the world On behalf of the Board of Directors, I wish to extend our appreciation to several parties for their contributions to our successes in the year under review. We thank our shareholders and subscribers who have continued to upport us and to give us the confidence to work hard to meet their expectations. We thank our partners, including bankers and financiers, business partners such as Telekom Malaysia Berhad and Tenaga Nasional Berhad, suppliers, vendors and others who have collaborated with us over the past year. The Ministry of Information Communications and Culture of Malaysia and the Malaysian Communications and Multimedia Commission, as well as other regulators, have always been helpful in assisting us at many levels and I take this opportunity to express our appreciation.
I also wish to congratulate the leadership team at Maxis and all our staff for their efforts which have assured us of another good year. It is my privilege to thank my fellow Board members for lending their counsel, both to myself and the CEO Mr Sandip Das, during 2010. In particular, I wish to place on record the contributions of our outgoing member Eng. Saud Majed A. AlDaweesh who resigned during the year. In his place, I welcome Dr Zeyad Thamer H. AlEtaibi, who joined the Board on 10 February 2011. Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda Chairman maxis berhad annual report 2010 1 42 maxis berhad annual report 2010 BusinessReview Ceo’s stAteMent Chief executive officer’s statement sandip Das Chief Executive Officer Dear Shareholders, 2010 was our first full year of operations, following the successful lis