Singapore telco StarHub has booked a 27 percent rise in its third quarter net profit at S$96 million (US$78.55 million). This was on the back of a 2 percent rise in revenue of S$586 million (US$497.5 million).
In its earnings call Friday, the telco noted the results were lifted by higher revenue from fixed network, pay TV and broadband services.
For the three months ended September, its mobile segment's revenue decreased 1.3 percent to S$303.3 million partly despite adding 10,000 subscribers. This was partly due a drop in voice and SMS usage, and the renegotiation of interconnect deals which saw lower rates. For the quarter, the telco's market share dipped from 28.3 percent to 27.5 percent.
For its pay TV segment, revenue rose despite a drop of 1,000 customers for the quarter. Earnings increased 6 percent to S$99.2 million (US$81.2 million) for the quarter. This was mainly due to the S$2 (US$1.63) hike in its monthly subscription price implemented since August 2011, rental of its high definition (HD) set top boxes, and advertising.
For the rest of the year, StarHub said it would be cautious over margin pressures from additional handset subsidies especially with the demand for iPhone 5, and other smartphones, as well as year-end festive season promotions.
Pay TV impact from cross-carriage rule
Last month, StarHub was blindsided by its rival SingTel, which sidestepped the cross-carriage rule--a regulation requiring operators to sell access to exclusive content to customers of rival pay TV platforms.
SingTel had renewed the rights to broadcast the English Premier League (EPL) for another three seasons, but this time, on a non-exclusive basis. This meant SingTel would no longer be obliged to provide access to StarHub customers, effectively locking them out from watching the football season unless their telco purchases rights for itself.
During the call, StarHub CEO Neil Montefiore said he understood negotiations were still ongoing between the TV rights holders and SingTel, and it was still premature to reveal its course of action.
In its results announcement, StarHub warned content acquisition costs were likely to rise, regardless of the cross carriage rule.
"In the pay TV segment, with cross carriage for exclusive content in its third year of implementation, more content acquisition and renewals are on a non-exclusive basis. This has not however reduced our content costs significantly and content costs are expected to remain high going forward," it said.
The telco had also in October announced it would be offering infrastructure-as-a-service (IaaS), such as storage and virtual machines, to government agencies and statutory boards for "non-sensitive" computing needs.