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StarHub reports 21 percent decline in half-year profit to SG$159m

StarHub's net profit for H1 2017 was down 20.9 percent from SG$201 million on revenue of SG$1.171 billion and EBITDA of SG$349 million.
Written by Tas Bindi, Contributor on

Singaporean telecommunications provider StarHub has reported after-tax profit of SG$159 million for the six months ended June 30, 2017, down 20.9 percent from the SG$201 million reported in the corresponding period in 2016.

After-tax profit during Q2 2017 similarly dropped by 21 percent to SG$86 million, compared to SG$109 million in the previous corresponding quarter.

Revenue decline was slight, going from SG$1.177 billion in 1H 2016 to SG$1.171 billion in 1H 2017. Quarterly revenue, however, decreased by 1 percent from SG$586 million in Q2 2016 to SG$579 million last quarter.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) was SG$341 million, down 9 percent from the SG$375 million reported in previous year. Quarterly EBITDA was down 6 percent to SG$180 million last quarter from SG$192 million in the previous corresponding quarter.

Service revenue dropped 2 percent for the half-year period from SG$1.096 billion in 2016 to SG$1.08 billion in 2017, due to decreases in revenue across its mobile, broadband, and pay TV segments.

StarHub's revenue for mobile was down 1 percent year on year, from SG$603.4 million to SG$598.9 million. Average revenue per user (ARPU) for post-paid services decreased SG$1 to SG$69 per month, while prepaid was similarly down by SG$1 to SG$15 per month.

As of June 30, 2017, StarHub had 2.29 million mobile customers, consisting of 1.385 million post-paid customers, down slightly during the April-June quarter from 1.392 million, and 905,000 prepaid customers, up from 898,000 in the previous quarter.

The telecommunications provider also experienced a 7 percent drop in pay TV revenue from SG$190.3 million in 1H 2016 to SG$176.3 million in 1H 2017. In Q2 2017, revenue was SG$87.9 million, down 0.6 percent from SG$88.4 million in the previous quarter, and down 7.9 percent from SG$95.4 million in the corresponding quarter in 2016.

StarHub attributed this to a loss in customers -- which fell to 477,000 in Q2 2017, compared with 487,000 in Q1 2017 and 518,000 in Q2 2016. ARPU remained unchanged from quarter to quarter, at SG$51 per month, but dropped SG$1 from SG$52 in Q2 2016.

Broadband also made losses during the half-year, decreasing 3 percent in revenue from SG$107.9 million in 2016 to SG$106.5 million in 2017. As of June 30, 2017, StarHub had 467,000 customers, down from 470,000 in the previous quarter and 473,000 in the corresponding quarter in 2016. ARPU was stable on the half at SG$37, but decreased by SG$1 to SG$36 from Q1 to Q2 2017.

StarHub's enterprise fixed segment rose 2 percent from SG$194.4 million to SG$197.9 million in revenue during the most recent six-month period, due mainly to the higher uptake of data and internet services -- which grew 5 percent from SG$167.6 million to SG$176 million -- while voice usage again dropped, bringing in revenue of SG$21.9 million, down by SG$4.9 million over the half due to lower traffic from international direct dialling and international interconnect services.

StarHub announced in July that it would acquire the remainder of cybersecurity provider Accel Systems & Technologies for a maximum of SG$26.22 million, which the company's CEO Tan Tong Hai said "dovetails perfectly" with StarHub's strategy to grow its enterprise segment.

The company acquired a 51 percent controlling stake in Accel for SG$19.38 million in May, a further 29.4 percent in July. The remaining 19.6 percent will be acquired by the first quarter of 2020.

"Accel's cybersecurity solutions complement our network-based capabilities, making us well placed to compete in major government and commercial cybersecurity tenders," Tan said in July.

StarHub said the acquisition is aimed at boosting its cybersecurity offerings in order to offer the "full spectrum" of cybersecurity products and services, as well as augmenting the research and development capacity of its Cyber Security Centre of Excellence.

On launching the centre in May 2016, StarHub had signed partnerships with Blue Coat, Fortinet, Wedge Networks, Republic Polytechnic, and Singapore University of Technology and Design, co-investing SG$200 million over five years to undertake initiatives aimed at boosting cybersecurity skills development and industry collaboration across Singapore.

StarHub also said it would be training more than 300 professionals in cybersecurity skills over the five-year period, in addition to working on R&D projects with its partners and with Singapore's Cyber Security Agency.

The telco revealed to ZDNet in January that it attained speeds of 35.15Gbps during a trial of 5G network technology with Chinese technology giant Huawei.

The field trial was conducted using 2GHz of spectrum in the e-band -- which sits between the 60GHz and 90GHz frequencies -- and using 64 Quadrature Amplitude Modulation.

"To future-proof our network, we have been trialling gigabit-speed solutions, which for instance can deliver over 30Gbps on 5G," Chong Siew Loong, then head of Network Engineering and current CTO at StarHub, told ZDNet at the time.

In November last year, StarHub and Nokia attained speeds of 4.3Gbps and latency of 1ms during a 5G trial over centimetre-wave frequency between the 3GHz and 30GHz bands using the Nokia AirScale platform.

These 5G trials followed StarHub and Nokia's demonstration of 600Mbps data transmission speeds over 4G using 4x4 Multiple-Input Multiple-Output and carrier aggregation in May.

A month earlier, the Singaporean telco announced a showcase of 1Gbps indoor 4G coverage in conjunction with Huawei, which combined 55MHz across the 1800MHz, 2100MHz, and 2600MHz spectrum bands.

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