Singapore telecoms group StarHub said its second quarter net profit for the three months ended 30 June 2010 fell 25.4% year-on-year to SGD58 million (USD43 million), although operating revenues increased 7% over the same period to SGD569 million; service revenue climbed 6% to SGD544 million. The telco remains bullish about its prospects for the rest of the year and expects profit margins to recover, but admits the cost of broadcasting the World Cup drove up operating costs in the period. Moreover, second-quarter earnings were adversely impacted by subsidies used to entice new smartphone users and keep existing ones. The firm’s pre-tax profit margin of 25.9% was 5.5 percentage points lower than for 2Q09, but an improvement on the 22.5% figure recorded for 1Q10. StarHub chief executive officer, Neil Montefiore, said: ‘We expect [margins] to grow steadily, we expect that to continue, we expect to get back to our normal margin quarters for the year of about 28% … What we’re seeing from the smartphone revolution is that we’re getting more ARPU and more customers, and so a bigger customer base … Android phones have just begun to take off this second quarter. It’s looking good and there are a lot of manufacturers for Android phones, so it’s more competitive and will likely mean lower costs.’ StarHub’s 1H10 results showed the firm booked a 37% year-on-year fall in net profits to SGD101 million from SGD160 million, despite a 6% rise in revenue to SGD1.1 billion.
StarHub’s mobile arm added a net 82,000 users in the second quarter of 2010 to close June with 2.056 million, of which 52% were pre-paid. Post-paid net additions totalled 29,000 while pre-paid net adds of 53,000 were almost double the 30,000 logged in 1Q10. The operator’s residential broadband ended June 2010 with 408,000 connected lines, unchanged from three months earlier, and segment revenue dipped marginally to SGD59.2 million from SGD59.5 million in the first quarter; broadband ARPU was stable at SGD48 per month. Meanwhile the telco’s pay-TV unit also reported a flat quarter in the April-June period for a total of 541,000 customers, unchanged from 31 March. TV ARPU was stable at SGD56 per month (up from SGD55 in 1Q10) and revenues climbed to SGD109.6 million from SGD101.6 million. Revenue from fixed network services rose to SGD81.6 million in 2Q10, from SGD79.9 million in the previous quarter.