FACT SHEET
Keppel Network Engineering & Technology Solutions
Keppel Network Engineering

Is a leading network engineering service provider in S.E. Asia.

Has implemented wireless network for major mobile telecom operators in the region like
M1 (Singapore), Maxis (Malaysia), Globe Telecom (Philippines) and KGT (Taiwan).

Has significant presence in Europe in the upgrading of cable TV network.
Products & Services

Business and engineering consultancy for network owners

Planning and design of the network

Project management and deployment of the network

Post-implementation optimisation of network

Network operations and maintenance
Market Opportunities
Wireless ( Mobile Networks )

Strong Market Growth
o
The number of mobile subscribers worldwide is expected to grow 15 - 20% annually,
reaching 1.7 billion by 2005. The highest growth will be in Asia.
o
Global wireless capital expenditure is expected to average US$60 – US$80 billion
annually. Network services and software spending comprise about 35% of this amount.
o
The bulk of the capital expenditure will be skewed towards 3G network deployment.
Europe will start rolling out 3G networks in 2003. In Asia, there are rollout plans in
Japan, Taiwan, S. Korea, Singapore, Malaysia and Thailand. US rollout will gather
momentum in 2004/2005.
o
The capital cost of deploying a 3G network will be significantly higher than a 2G because
of greater technical demands.
o
Capital expenditure for new and upgrading of 2G and 2.5G (GPRS) network will still
continue in the next five years.
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
Outsourcing Trends
o
Telecom operators are increasingly outsourcing their network rollout, operations and
management of their network to third party service providers because:

They want to focus on developing products and marketing them to subscribers.

They will increasingly share network infrastructure rather than own (cost savings).
o
Equipment suppliers who undertake turnkey deployment of network infrastructure to sell
their equipment are also outsourcing the network engineering to third parties in order to
focus on product technology and innovation.
o
Near simultaneous deployment of 3G networks around the globe will greatly strain inhouse resources, forcing telecom operators and equipment suppliers to outsource more.
o
Focus on 3G deployments will also encourage more outsourcing of deployment and
management of 2G networks, increasing its market size for third parties.
Cable / Broadband ( Local Access )

Market is driven by the need for cable network operators to upgrade their network to
increase bandwidth capacity and to provide for 2-way high-speed data transmission.

The key market for upgrading is Europe, especially in Germany, France and Spain. Other
European potentials are Belgium and Netherlands.

In the United States, about 60% of the subscribers already have 2-way capability, and more
than 50% of the homes passed already have higher bandwidth. Nevertheless, there remains
a meaningful proportion of cables to be upgraded.

Future demands for additional cable network and upgrading are driven by :

o
Adoption of High Definition TV (HDTV) which will require more bandwidth
o
Telephone communication using cable networks
The same forces (as wireless) are also driving the outsourcing of operations and
maintenance for cable network. Maintenance revenue is estimated at US$40/subscriber
/year.
Keppel Network Engineering’s Competitive Advantage

Strong Market Position
o
Has delivered over 50 networks in 15 countries.
o
A market leader in S.E. Asia, and dominant player in the upgrading of cable TV network
in Germany.
o
Solid track record - an important competitive edge.
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Strategic Partners
o
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
Long standing relationships with equipment vendors like Nokia, Motorola, Lucent, Harris,
Nortel and Ericsson in S.E. Asia, leading to preferred partner arrangements. This will
enable Keppel Network Engineering to expand regionally together with these global
players.
Customer Retention
o
Provision of centralised database management and proprietary network management
systems to customers enables Keppel Network Engineering to hold on to its customer
base.
o
International Management Team
o
Talent pool of senior managers from different telecommunications background from over
20 nationalities.
o
Provide global perspective and capability.
Accredited and Certified Technical Staff
o
Employs over 560 staff, over ¾ are engineers and highly qualified technicians.
o
Key technical staff are accredited and certified by vendors like Nokia, Harris and Cisco.
Keppel Network Engineering’s Growth Strategy

Participate in S.E. Asian 2G and 3G rollouts in Singapore, Malaysia and Thailand. Thai
market presents opportunities with two new wireless operators there.

In North Asia, focus on Taiwan, S. Korea, Japan and China. Leverage on the strategic
partnerships with Nokia, Motorola, Cisco and Harris in these markets. In China, build on the
Keppel Group’s brand name and relationship.

In Europe, launch from Germany into UK, Italy and Spain. Will consider strategic joint
ventures in these markets. Also work together with equipment vendors for 3G rollout in
these markets.

In U.S., leverage on the customer base (telecom operators) of CGS for initial market entry.
Intention to make strategic acquisitions in small but well-run network engineering companies.

Acquire Intellectual Properties providing solutions for telecom operators to manage their
network as well as to provide value-added services to their subscribers.
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Competitive Landscape
The competitive landscape is a fragmented market characteristic of one undergoing structural
changes. Keppel Network Engineering intends to capitalise on these developments to achieve a
dominant position in network engineering services in the next few years. The key players are: 
Engineering and construction companies like Bechtel (civil engineering) and CH2MHILL
(utility, transportation and telecoms) which undertake turnkey network deployment. They
usually handle the project management and deployment, and subcontract the planning and
design. Increasingly, telecom operators prefer to deal with single focus service providers,
especially with higher technical demands on modern networks.

Equipment vendors like Nokia, Ericsson and Motorola undertake turnkey projects for telecom
operators together with the equipment supply. They are increasingly outsourcing the network
deployment portion to preferred partners.

Telecom operators like Telstra, Telia and KPN have their own in-house divisions to do
network deployment, operations and maintenance. However, they are increasingly
outsourcing the network engineering work to focus on their core businesses.

Independent network engineering companies like LCC, O2Wireless, Wireless Facilities Inc.
(WFI) operate in U.S. and Europe. Keppel Network Engineering operates in the same space
in S.E. Asia and Europe. Software suppliers like Aircom, MSI, Sirti (GIS) and Adam
Consulting (GIS) also operate in some segments of network engineering.

In the cable/broadband arena, players include CH2MHILL, Quanta Services Inc and
International FiberCom Inc. Keppel Network Engineering’s competitive advantage is its
ability to coordinate the quality of its European office and competitive cost advantage in
Malaysia to provide consistent quality, and fast turnaround time at competitive prices.
Sales

Keppel Network Engineering’s 2001 revenue is S$220 million. This will more than double in
2002 to exceed S$500 million. Earnings will also increase significantly.

Keppel Network Engineering has an orderbook of almost S$600 million of which S$300
million will be booked in 2002. The orderbook will continue to grow.

Keppel Network Engineering expects that its ongoing market development efforts and
extension of its services both in terms of product offerings and geography will enable it to
reach a revenue of S$1.0 billion in 2004.
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