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StarHub’s first-quarter profits dip 7.7%, revenue down 1.5%

8 May 2014

Singapore’s StarHub has posted a 7.7% year-on-year fall in net profit to SGD84 million (USD67.3 million) for the three months ended 31 March 2014, on revenue that slipped 1.5% over the same period to SGD571.4 million. EBITDA was also down at SGD177 million, from SGD182 million in Q1 2013. The fixed and mobile operator blamed the fall in sales to a 0.6% dip in service revenue from its mobile, pay-TV, broadband and fixed network services to SGD543.8 million, and lower sales of equipment, which declined 15.7% to SGD27.6 million as a result of falling handset sales in the period. StarHub also said that the drop in net income was due to higher provision for taxes and ‘lower adoption grants recognised’.

The telecommunications service provider notes that mobile continues to be the group’s primary contributor – at 54% of total revenue – with turnover from the segment rising 1% y-o-y to SGD306 million, driven by the popularity of its post-paid mobile offers and a rise in the proportion of users with data subscription plans. The carrier closed out March with 2.349 million mobile users, up from 2.217 million a year earlier, but below the 2.351 million reported at end-2013. Revenue from StarHub’s fixed network services increased 2% on an annualised basis to SGD90 million (or 16% of group revenue), but the operator noted that its pay-TV and broadband divisions reported falling sales in the face of intense local competition. Pay-TV, which contributed 16% of StarHub’s total turnover, saw its revenue decrease 1% y-o-y to SGD94 million – due to a decline in subscription revenue – while broadband sales slumped 14% over the same period to SGD54 million in January-March 2014, as a fall in subscription revenue failed to offset a rise in the user base. Broadband contributed 9% of total revenue for the three-month period under review, with StarHub reporting 451,000 high speed internet subscribers, up from 444,000 at end-March 2013. Going forward, StarHub is forecasting that FY2014 service revenue will expand in the ‘low single-digit range’, adding that it also intends to maintain its annual cash dividend pay-out of SGD0.20 per ordinary share for 2014.

Last month, TeleGeography’s CommsUpdate reported that StarHub has selected next generation cable edge technology specialist Casa Systems to supply it with an integrated C100G platform. In addition, the carrier – which operates an island-wide HFC network that delivers multi-channel pay-TV services as well as high speed residential broadband services – says that the deal includes the provision of a future migration to DOCSIS 3 technology.

Singapore, StarHub

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