Online Q&A

About TeleChoice International Limited (Regn No. 199802072R)

TeleChoice International Limited ("TeleChoice") is a regional diversified provider and enabler of innovative info-communications products and services. Incorporated in Singapore on 28 April 1998 and listed on the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST") on 25 June 2004, TeleChoice is a subsidiary of leading info-communications group, Singapore Technologies Telemedia Pte Ltd, which operates in the Asia Pacific, the Americas and Europe.

TeleChoice's three business divisions collectively offer a comprehensive suite of services and solutions for the info-communications industry:

Consumer Business Group

Personal Communications Solutions Services ("PCS")

Personal Communications Solutions Services ("PCS") division is a regional provider of fulfilment and managed services. It is in the business of distribution and supply chain management services relating to mobile communication devices, wearables and accessories. In Singapore, it operates a retail chain through two of its subsidiaries, Planet Telecoms (S) Pte Ltd and Planet Managed Services Pte. Ltd. Besides being the only StarHub Ltd ("StarHub") Exclusive Partner to manage five StarHub Platinum shops, it also manages concept stores for major mobile device manufacturers. In addition, it is the appointed master distributor of StarHub's prepaid business. Through its Malaysian subsidiary, it provides retail management, fulfilment and supply chain services to U Mobile Sdn Bhd, Malaysia's fastest growing full-fledged mobile operator that offers data, voice and messaging services. PCS also operates an e-commerce site, www.eplanetworld.com, which boasts of the latest mobile phones and tablets as well as accessories for online shoppers.

Enterprise Business Group

Info-Communications Technology Services ("ICT")

Info-Communications Technology Services ("ICT") division is a leading regional integrated info-communications solutions provider. Its extensive offerings include enterprise IT infrastructure, business solutions and integration services, managed and hosted services, fixed and wireless networking solutions, as well as contact centre and unified communications solutions. It also provides consultancy and managed services to help companies adopt cloud, big data, analytics, IoT (Internet of Things) and smart learning solutions to transform their businesses. ICT also has a unit that offers distribution services for networking and security products. In addition, under the SunPage brand, ICT has a Service Based Operator (SBO) licence that offers IDD, SMS broadcast as well as mobility solutions and services for the consumer and enterprise markets.

Enterprise Business Group

Network Engineering Services ("Engineering")

Network Engineering Services ("Engineering") division is a regional provider of network engineering services and supplier of specialised telecommunications products. It designs, builds and manages telecommunications networks and provides a comprehensive suite of specialised products and cost-effective solutions to address the network infrastructure needs of fixed and mobile operators in the Asia-Pacific. Its services encompass radio network planning and optimisation, transmission network planning, network implementation, maintenance and project management. It also offers an extensive range of innovative and cost-effective products for telecommunications access and coverage needs, as well as for power supply and power backup requirements.

Some of TeleChoice's major customers and partners include StarHub, U Mobile, Indosat, Telkomsel, Maxis, DiGi, IBM, Oracle, HP, SUN, SAP, Avaya, Aruba, Ericsson, L.G, Motorola, Nokia, Samsung, Sony Ericsson, Huawei and NSN.

For more information, please visit our website at www.telechoice.com.sg

Dear Victor Phua, you wrote:

The revenue for your Info-Comm Technology Services has grown 6-fold in FY2011 due to S & I Systems Pte Ltd and NxGen Communications Pte Ltd. Going forward, I see great synergy in the 2 companies you have acquired. Do you intend to merge the 2 operations to jointly bid for projects as to achieve economies of scale?

The capabilities and competencies of the acquired entities are complementary and we see good synergies moving forward. Collectively we are now better positioned to take on larger, broader and more interesting projects. We will integrate as appropriate to maximize the benefits and efficiency of the combined entities.

Dear Jason Teo, you wrote:

Your cash level has declined from S$34.5M in FY20120 to S$30.5M in FY201. Do you intend to continue buying back your shares? If you do will it affect future dividend payout?

The decline in cash level was mainly attributed to acquisitions and partly due to share buy-back.

Our share buy-back is solely for replenishing our treasury shares held for our long-term incentive plan for executives.

As for future dividend payout, that is determined by a number of factors and not on how much shares we buy back. Since FY04, our Board of Directors has set a benchmark dividend policy to declare and pay annual dividends of at least 30% of our annual net profit after tax, subject to the Group's earnings, cash flow, and capital requirements. The proposed final dividend payment of 1.6 cents per share for FY2011 is about 66% of our annual net profit after tax which exceeds the guideline.

I feel the management should take some time to digest its recent acquisition and retain cash given the global economic uncertainty. What is the management strategy going forward in a cautious business environment where consumers and businesses hold back on spending?

Regardless of the business environment, we've always adopted a prudent approach towards investments and business spending. While we are mindful of the anticipated slowdown in the economy in 2012, our growth strategy will continue to be driven by our aim of maximizing shareholder value through the expansion of our business capabilities and extending our reach.

Dear Tan Ping Chu, you wrote:

I feel there is great opportunity for your company when the government announced enhancement of the Productivity and Innovation Credit Scheme. For example, you can help train and develop IT solution for the F&B industry to increase their productivity. THe F&B company can claim from the government to buy your IT solutions. What do you think?

We already have solutions that are eligible for the government productivity scheme, particularly in the area of cloud services. We will continue to explore opportunities to align with the government's objective of promoting IT use and productivity enhancement.

Dear GL Tan, you wrote:

I must congratulate the management for steering the company in new focus. However the distribution business is still one of the core. So, is the company going to distribute Apple products soon? If not, what is stopping the company to do so.

Thank you for your kind words of encouragement. Apple Inc controls the sale of its handsets very strictly and only deals directly with local mobile operators. As such, we will not be able to pitch for the distribution business. Nevertheless, we are pleased to share that our recently renewed integrated fulfillment and management services contract with StarHub, (a reseller of Apple iPhones), includes fulfillment services for Apple iPhones. PCS Services will, therefore, stand to benefit from the continued strong sales of iPhones.

Dear Jayster, you wrote:

Temasek owns 50.59% of your shares via STT Communications. Your ex-Group President holds his stake of about 20% in his private equity firm, Leap International. Your dividend yield is about 6.5% based on the share price of S$0.245.

Your share is illiquid. It makes more sense for TeleChoice to go private than pay the stock exchange money to be listed yet not tapping the market for funds. Has the company been made any offer to go private?

There has not been any offer or discussion to go private.

Dear Investors,

Thank you for all your questions and your interest in TeleChoice International Limited. We have come to the end of this On-Line Q&A session.

We have enjoyed the session and have learnt form your questions. We hope that through the Online Q&A, you have gained better insights to our Company and our operations.

Regards,
The Management Team
TeleChoice International Limited