StarHub trims growth outlook; CFO to retire

Summary:Singapore telco books 3 percent rise in Q1 net profit but sees ARPU pressure from OTT players on mobile income, and warns of intense competition in broadband space from newcomers.

Singapore's second largest telco StarHub has trimmed its outlook for the current fiscal year based on its first quarter results, amid pressure on the mobile space from OTT players and "intense" competition in the broadband space.

kwek buck chye
Kwek Buck Chye, StarHub CFO.

CFO to retire

Kwek Buck Chye, 60, will retire by end-September, to spend more time with his family.

He joined StarHub as its CFO in 2002.

As a result of a two-year succession planning, Kwek's role will be taken over by Nicholas Tan, 54, currently the senior vice president of corporate planning at ST Telemedia.

In the previous quarter, StarHub announced the retirement of then-CEO Neil Montefiore, who has been succeeded by then-COO Tan Tong Hai.

In an earnings call on Thursday, StarHub revealed first quarter net profit rose 3 percent to S$91 million (US$71 million), despite a 2 percent drop in revenue to S$580 million (US$472 million). The revenue dip was due mainly to a lower average selling price and quantity from sales of equipment such as handsets, said the telco.

Mobile ARPU pressure

StarHub's postpaid mobile customer base rose to 1.11 million subscribers with a net add of 8,600 subscribers for the three months ended March. Compared to a year ago, its customer base grew 4.3 percent, or added 45,600 subscribers.

However, postpaid mobile average revenue per user (ARPU) for the quarter was S$1 lower at S$68, compared to S$69 from the previous year. This was primarily due to lower outbound roaming and usage revenue, explained the telco.

StarHub noted a drop in both postpaid voice and SMS usage, at 9.2 percent on-year to 302 minutes and 30 percent on-year drop to 151 SMSes respectively.

"As customers used more of their data bundles to chat and text , postpaid mobile data traffic grew 21 percent year-on-year to 4.8 million gigabytes in Q1 2013," StarHub said in its statement.

Pay TV optimism

Pay TV services revenue was 1.1 percent lower on-year at S$94.7 million, due to lower advertising revenue. Its subscriber base dropped 4,200 customers in the quarter to 532,000. Compared to a year ago, this was a 2.3 percent decrease of 12,600 subscribers.

StarHub expressed optimism in gaining traction on the back of the regulator's decision to order rival SingTel to share its coveted BPL soccer TV rights under cross-carriage rules , a move which could prevent further churn.  

Broadband intense competition

Broadband revenue grew 2 percent to S$62 million, compared to a year ago, while its customer base increased by 4,000 year-on-year to 440,000 households--largely flat from the previous quarter.

However, StarHub warned competition remained "intense" as new retail service providers for Singapore's Next Generation Nationwide Broadband Network continued their aggressive marketing offers to gain market share.

For the current fiscal year, the telco noted based on the current outlook, it would revise downwards its guidance for operating revenue to grow in the "low single-digit range", instead of a single-digit range forecast in February .

starhub q1 profit
StarHub Q1 profit up 3 percent on-year.

 

Topics: Telcos, Networking, Singapore

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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