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StarHub: Fiber installation delays 'a bit silly'

Singapore telco's CEO complains it continues to lose out from offering enterprise customers fiber broadband access due to delays by OpenNet, but hopeful regulatory pressure will resolve two-year wait.
Written by Ryan Huang, Contributor

Singapore telco StarHub has raised more complaints that it is losing out on revenue from servicing corporate customers in as many as 20,000 buildings because of continued delays with provisioning of connections by network company (NetCo) OpenNet.

This follows a marginal on-year increase in its fixed network services revenue, which was revealed in the company's first quarter 2012 results released Friday.

During the earnings call with media and analysts, StarHub CEO Neil Montefiore expressed his disappointment with the continued delays in sorting out connectivity to corporate customers. "It's a bit silly, it's two years on now [since the launch of Singapore's next-generation nationwide broadband network (NGNBN)]."

"We need to sort out how the cable gets from the equipment room to where our customers want," he added, noting that his reach to corporate customers was limited at the moment.

However, Montefiore was optimistic that a resolution through regulatory pressure was "fairly imminent". "We've escalated it in every way we can. There's been a review [by the authorities] in the arrangement, there should be some results. We should see some pressure from the regulators and see something happen."

Positive first quarter showing
Despite the setback, StarHub revealed in its financial report that its fixed network services revenue posted a marginal increase from a year ago. Fixed network services revenue was S$1.4 million (US$1.1 million) or 1.7 percent higher at S$85 million (US$68.5 million).

This helped lift overall operating revenue by 5.8 percent to S$591 million (US$475.9 million) over the same period. The company said net profit jumped 28 percent for the first quarter to S$88 million (US$70 million) from a year ago.

StarHub reported that marketing and promotion expenses decreased 12.2 percent year-on-year to S$37.3 million (US$30 million) in the first quarter. Montefiore noted that this was partly due to lower acquisition costs, or subsidies given for handset subsidies for the quarter.

However, he was cautious that subsidy costs may increase over the year with "customers rushing to upgrade" to new handset models such as Samsung's Galaxy S III, and with Apple's latest handset iPhone 4S "coming to the end of its run".


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