Singapore’s StarHub saw net profit attributable to shareholders and non-controlling interests fall 2.4% year-on-year to SGD56.6 million (USD42 million) in 3Q19, as it was forced to absorb ‘a higher share of loss of associate and tax expenses’, while total revenue declined by 1.6% to SGD572.6 million from SGD582.2 million and service revenue dropped even further, by 5%, to SGD435.0 million from SGD460.0 million in 3Q18. The lower revenues were mainly due to ‘lower revenues from Mobile, Pay TV and Broadband, partially mitigated by higher revenues from Enterprise Business and Sales of equipment’. More positively, EBITDA rose 16.0% on an annualised basis to SGD170.5 million (on the back of the impact of ‘SFRS(I) 16 Leases’) and the carrier’s service EBITDA margin climbed 6.3 percentage points to 35.1% for the three months under review. The relatively poor performance prompted StarHub’s management to downgrade its full-year service revenue forecast to a decline of between 2% and 3%, down from an earlier guidance of unchanged (0%) to 2% decline, as service revenue for the nine-month period came in lower by close to 4%.
The telco reported that its mobile business generated revenue of SGD190.0 million in 3Q19, down from SGD213.6 million a year earlier – impacted by lower IDD voice and excess data usage, roaming, data subscriptions and VAS revenues – as post-paid ARPU slipped to SGD39 per month from SGD44 in the year-ago period, and pre-paid ARPU dipped on lower customer numbers and a migration of users to SIM-only post-paid options. Moreover, the carrier’s post-paid subscriber base fell quarter-on-quarter to 1.442 million on what was termed ‘the termination of low-ARPU enterprise lines’, although the overall user base edged up to 2.227 million from 2.221 million at end-September 2018.
Turning to fixed line operations, StarHub said broadband revenue decreased 7% y-o-y to SGD43.2 million as ARPU fell by SGD5 to SGD27/month, although its subscriber base increased from 473,000 at September 2018 to 505,000 a year later; broadband churn was stable at 0.9%. Pay-TV sales also fell, by 24.8% y-o-y to SGD56.1 million, as the subscriber base tumbled to 347,000 from 423,000. ARPU from this segment also fell by SGD7 y-o-y to SGD40/month due to ‘cable to fibre migration and related promotional activities’.
Commenting, CEO Peter Kaliaropoulos said: ‘Year-on-year results reflect declines in mobile and TV revenues but higher demand for cloud, data network services, digital and cybersecurity solutions is driving strong growth in our enterprise segment’. The official went on to note that StarHub’s strategic transformation – initiated shortly after he joined the firm in July 2018 – was ‘tracking well and may likely exceed the targeted SGD210 million gross savings by full year 2021’.
‘On the 5G front, StarHub is conducting trials and proof-of-concepts with a 5G ecosystem of technology, businesses, institutes of higher learning and public agency partners. StarHub is targeting to submit a 5G proposal for a nationwide network following IMDA’s 5G announcement and Call for Proposal,’ Kaliaropoulos added.