StarHub raises profit by SG$28.6m thanks to broadband, enterprise

Singaporean telecommunications provider StarHub has announced its financial results for the first half of 2016, reporting a net profit of SG$201.4 million, up 16.6 percent from the SG$172.8 million reported for the same period last year.

Again making gains in broadband and enterprise fixed services and losses across mobile and pay TV, the telco's earnings before interest, tax, depreciation, and amortisation (EBITDA) for the half year ended June 30 was SG$375.3 million, up 5.3 percent from the SG$356.6 million announced in mid-2015.

Revenue was SG$1.18 billion, down 2.5 percent from SG$1.2 billion, while cash and cash equivalents stood at SG$522.9 million as of the end of June, up a substantial 238.2 percent from SG$154.6 million, which was attributed to higher cash flow from operations alongside lower working capital and tax paid.

Mobile services contributed SG$603.4 million in revenue over the half year, down 2.1 percent from SG$616.2 million and accounting for 51.3 percent of the company's total revenue. The fall was attributed to lower usage of its post-paid and prepaid services, despite a rise in customer base.

Its total mobile customer base is now 2.235 million, with StarHub gaining 73,000 customers since June 30, 2015; 51,000 customers were added to its post-paid customer base, for a total of 1.364 million, while 23,000 prepaid customers were added for a total of 872,000.

Average revenue per user (ARPU) for post-paid mobile customers improved by SG$1, from SG$69 to SG$70 per month, but this was offset by a loss in prepaid ARPU of SG$2, from SG$18 down to SG$16. StarHub now has a 26.7 percent mobile market share, up 0.1 percentage point since last year.

StarHub's pay TV business also recorded a loss in revenue -- down 1.8 percent to SG$190.3 million, accounting for 16.2 percent of the company's total revenue. This was caused by a lower customer base; it now has 518,000 customers, losing 27,000 over the last year, with a stagnant ARPU of SG$51.

Broadband, however, rose by 11.1 percent year on year in revenue, from SG$97.1 million to SG$107.9 million, accounting for 9.2 percent of total revenue. This was attributed to increased uptake of higher-speed plans.

Residential broadband customers now number 473,000, down by 2,000 over the year, but this was more than offset by the number of fibre broadband customers, which rose by 111,000 for a total of 328,000. ARPU also increased, up by SG$4 to SG$37 per month.

Enterprise fixed services likewise made gains, up 3.6 percent from SG$187.6 million to SG$194.4 million for a total revenue share of 16.5 percent, driven by growth in data usage. Data and internet revenue contributed SG$167.6 million of this, up 3 percent from SG$161.1 million, while voice contributed SG$26.8 million, up 1.1 percent from SG$26.5 million.

"We are pleased to note that our residential broadband revenue has continued to grow for six consecutive quarters," said StarHub CEO Tan Tong Hai.

"We are also heartened to see continued growth in our total mobile customer base, contributed not only by the sustained increase in our post-paid mobile base but also by our prepaid base.

"Our enterprise fixed services are now the second-largest revenue contributor, in line with our strategy to accelerate our growth in the enterprise segment."

Sale of equipment was down by 28.5 percent, from SG$112.7 million to SG$80.6 million for the half year, accounting for just 6.8 percent of total StarHub revenue, due to a lower volume of handsets sold, particularly the high-end models.

StarHub has been working on improving its mobile network; in April, it announced that it had attained 4G indoor speeds of up to 1Gbps in partnership with Chinese technology giant Huawei, using the latter's small cell technology.

"There is more we can do to get better mileage out of our existing wireless spectrum," StarHub CTO Mock Pak Lum said at the time.

"We are closely tracking the development of this new small cell solution to help us enhance network quality quickly and cost-efficiently, providing customers with much faster data speeds even within buildings and in crowded areas."

StarHub also signed a memorandum of understanding with China Mobile International to collaborate on such things as research initiatives for evolving mobile network technologies; strengthening capabilities for complementary data business services; cooperating and sharing information on international mobile roaming; and developing business opportunities in relation to the Internet of Things (IoT).

StarHub rival and Singapore's incumbent telco Singtel is due to present its financial results next week.