As Chairman of the Group, I wish to share with you the most pressing strategic issues that we face in the form of Questions and Answers.
   
 
On Business Direction
 
The Company has invested in a lot of efforts to enhance its brand and image. What do you think of the progress?
 
This is a very important step for us towards achieving our Big, Hairy & Audacious Goal (BHAG) of becoming the largest Next Generation Network (NGN) provider in Hong Kong by 2016. We have already been recognized by the industry that our Fiber-to-the-Home network in Hong Kong is one of the most advanced networks worldwide. We need to let the consumers and investors know the same, even though most of them do not understand the technical details. Most of them are only guided by the common belief, that the bigger Company should normally have a better technology, which is not always correct.

According to all of the consumer surveys conducted in the past 18 months, HKBN has been rated as the 2nd best Internet Service Provider in Hong Kong, and is far better than the 3rd and the 4th ones. Our rating is very close to the dominant player. Our aim is be ahead of them.
   
 
What particular achievement makes you feel most satisfied?
 
Company Culture. We are an infrastructure company. We will be in Hong Kong over the next 100 years. We will not be acquired by other big companies. We understand that our future depends on how we behave today.

We understand our technology edge over the dominant player today cannot last forever. We need to build up something which is long term and not easy to be copied by others. This is our Company Culture.

For details, please refer to our Vision Statement at http://www.ctigroup.com.hk/en/vision.html. I am glad that, we have been making very good progress in "implementing" our Vision Statement step by step over the last year.

We have also seen significant achievements in:
- Staff's job satisfaction, trust and loyalty to the Company
- Consumer's satisfaction in our overall services

What is the most dissatisfied item for me? Delay in network rollout. We will increase our resources in this area to ensure that we can meet the target in the coming year.
   
 
Do you think these achievements help the Company to be on the right track of achieving BHAG?
 
Yes, absolutely. BHAG is a long term goal. Company culture is essential for the company to last. Staff morale is essential for providing excellent customer services. Customer's satisfaction is essential for giving us the highest return to our investment. Highest Return On Investment is essential for achieving our BHAG. I am confident that we are on the right track of achieving the BHAG, even though the road ahead is tough.
   
 
How has the Company been affected by the adverse economic environment?
 
We expect there will be increasing pressure on the whole industry's Average Revenue Per User. However, due to our uniqueness and the excellence of our products and customer services, we believe that we can maintain our position as the 2nd largest broadband provider in HK residential market and one of the highest ARPU operators.

Our senior notes are only due in 2015. So, financing is not a problem and we are not affected by the recent liquidity crunch. In fact, since most of the material costs and labor costs are expected to be lower in the coming 2 years, this is a good time for us to further expand our Fiber-to-the-Home network in full force.
   
 
How would you see the competition environment in telecom market?
 
With the anticipated adverse economic environment and too many operators in HK, the competition in Hong Kong telecom market will remain keen and be even more intensified. I don't see how that can be relaxed. However, as mentioned above, we have something unique (Ultra high speed Internet access and excellent customer service) which will maintain our leading position.
   
 
What will be the Company's future direction?
Our future direction is well defined in our Vision Statement. We will be the largest Next Generation Network (NGN) provider by 2016.
 
If the public was asked to describe HKBN by one word, what word you wish it would be?
"Change"
 

On Personal Aspect
 
It seems that the company's management style has changed a lot in recent years. What triggered these changes?
 
We are an infrastructure company and we will not be acquired by others. This company will last longer than the life span of me and my fellow partners. We need to build up a system to ensure:
1. Maintaining the company culture;
2. Managing by a team of professionals, rather than any single individual; and
3. Dedicating authority to the front line and motivating all levels of staff.
   
 
The 2 co-founders are stepping back from the operations of the company. What do you think about the pros and cons?
 
A start-up company is driven by entrepreneurship. An enterprise is maintained by a professional team.

This is a publicly listed company, not a family business. We, the two co-founders, have been running the company for over 15 years. We now need new ideas and new blood to spur the company's growth.
   
 
How's the progress of de-centralizing authority? To what stage is the transition at? Are there any issues that the company is facing, and how did you solve them?
 
The move towards de-centralizing authority has been a huge success and up to my expectation. We will further push down to front line customer contact points to ensure we can build a closer relationship with our customers.
   
 
What do you expect from the new management team?
 
Don't be afraid to take risk. All big technology companies are exposed to failure risk when they become complacent over their past achievements and is not willing to take risk. I hope the new management team will prepare for all the best and worst scenarios and have the guts to take risks.
   
 
Wong Wai Kay, Ricky
Chairman
Hong Kong, 17th November 2008