Singaporean carrier StarHub has reported its full-year financial results for 2018, with net profit dropping by 27 percent from SG$274 million down to SG$201 million.
For the year ended December 31, StarHub brought in revenue of SG$2.36 billion, down 2 percent from SG$2.4 billion, and earnings before interest, tax, depreciation, and amortisation (EBITDA) of SG$567 million, down 12 percent from SG$643 million.
While it is now billing itself as not only a telco but also an entertainment, cybersecurity, info-communications solutions, and digital services company, StarHub's real winner for the year was again enterprise fixed services, with the segment growing by 16 percent to bring in SG$511 million in revenue.
Of this, SG$289 million came from data and internet, SG$180 million from managed services, and SG$42 million from voice. Managed services was up a massive 84 percent year on year after its cybersecurity-focused acquisitions of Accel, now known as Ensign InfoSecurity, and D'Crypt.
"The growth in managed services revenue was largely contributed by higher demand for cybersecurity, cloud, cryptographic, and digital security solutions. Managed services revenue includes revenue from Ensign and D'Crypt," StarHub said.
Mobile services were down 8 percent to provide SG$825 million in revenue, after StarHub's mobile customer base fell from 2.3 million to 2.2 million over the year. Post-paid customers numbered 1.4 million by the end of December, after adding 34,000 during the year, while prepaid lost 150,000 during 2018 for a total of 788,000.
Post-paid average revenue per user (ARPU) was also down by SG$4 to SG$43 per month, while prepaid ARPU fell by SG$2 to SG$13. StarHub is claiming a Singapore mobile market share of 26.4 percent.
Across its pay TV segment, StarHub was down 12 percent year on year to SG$311 million in revenue. It lost 49,000 pay TV customers during the year, down to 409,000 in total, with ARPU also dropping by SG$2 to SG$49 per month.
"The overall pay TV market continued to be dragged by structural factors such as alternative viewing options and piracy," StarHub CEO Peter Kaliaropoulos added.
"We have lowered our TV subscription fees and enlarged the TV packs for key content such as HBO to deliver even more value to customers. As we face increased competitive threats, we continue to seek operational efficiencies and overhaul processes to simplify products, offers, and improve customer care."
Broadband remained relatively stagnant, down 0.5 percent to SG$186 million in revenue. Residential broadband customers reached 482,000 after adding 16,000 in 2018; fibre broadband customers rose by 44,000 to 425,000, with ARPU staying the same, at SG$32 per month.
Sale of equipment contributed SG$530 million in revenue, down by 0.5 percent year on year.
StarHub in October unveiled plans to axe 300 jobs as part of its strategic transformation, with the redundancies to impact non-customer-facing roles.
The transformation is expected to produce SG$210 million in savings over the three years from 2019 as it also looks to make savings across optimised spending in network and systems repairs and maintenance; leasing costs; procurement activities; and sales and distribution expenses.
"The intense competitive ferocity right across the market, new entrants, lower voice revenues, thinning margins for fixed broadband services, high content costs for pay TV operations, and high market penetration for mobile and fixed services have necessitated efficiency optimisation initiatives as part of the strategic transformation plan," Kaliaropoulos explained at the time.
"Technological innovation and competition are redefining how we deliver services to our customers, and we at StarHub need to transform our operating model, otherwise we will face greater risks in the future."
StarHub added that it would continue expanding its workforce across cybersecurity and wireless and fibre services, however.
"StarHub has clocked Singapore's fastest 3G and 4G speeds, according to OpenSignal. Notwithstanding this success, we know exploring innovation in 5G services is also crucial," he said.
During the year, StarHub activated what it called the "first commercially ready" gigabit-speed LTE mobile network in Singapore, as well as enabling narrowband Internet of Things (NB-IoT) capabilities.
StarHub net profit fell by 16 percent to SG$185 million, as the carrier increasingly relies on its enterprise segment for revenue growth as mobile and pay TV drop.
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