StarHub’s growth stalls in 2015 as costs rise - Mobile World Live

StarHub’s growth stalls in 2015 as costs rise

17 FEB 2016

Singapore’s second largest operator StarHub reported a slight increase in its net profit and revenue last year, after suffering a tough Q4, with revenue down two per cent year-on-year and profit falling 14 per cent.

Revenue rose two per cent to SGD2.44 billion ($1.74 billion) in 2015, driven by a 34.5 per cent jump in equipment sales, but service revenue edged down 0.1 per cent to SGD2.22 billion and mobile revenue fell 0.6 per cent to SGD1.24 billion. The declines came despite rising prepaid and postpaid ARPU and an expanded user base.

StarHub said the strong handset sales were fueled by an increased mix of higher-end handsets.

Its net profit in 2015 rose 0.5 per cent to SGD372 million, and EBITDA dropped 5 per cent to SGD712.7 million last year after an 18 per cent decline in Q4. Its EBITDA margin as a percentage of service revenue was 32.2 per cent for the full year compared with 33.7 per cent in 2014.

Operating expenses increased 4.7 per cent to SGD2.05 billion last year due mainly to an 11 per cent rise in the cost of sales. As a percentage of revenue, total operating expenses were 83.8 per cent for the full year, compared with 82 per cent in 2014. Capex was up 2.2 per cent to SGD328.8 million for the full year.

Postpaid ARPU rose 3 per cent year-on-year to SGD70, while prepaid ARPU increased 5.8 per cent to SGD18. The company said the higher postpaid ARPU was a result of an increasing mix of customers on the new 4G tiered data plans and its expanded customer base, which rose 3.8 per cent to 1.3 million. Its prepaid base fell 1 per cent, but its overall customer base rose 1.9 per cent to 2.19 million.

StarHub CEO Tan Tong Hai said postpaid mobile “continued to do well for us and our TV business showed resiliency despite competition. We also witnessed steady growth in our enterprise business”.

Pay-TV revenue increased slightly for the full year to SGD391 million. The company credited the increase to higher subscription revenue from its HD and hubbing services by new and existing customers who upgraded their services. Broadband revenue last year fell 1 per cent to SGD200.3 million, despite its residential broadband customer base rising 1 per to 476,000 customers.

The number of hubbing households with at least one StarHub service reached 774,000. The number of households taking two or more StarHub services remained at 60 per cent.

Tan said the economic outlook this year looks uncertain. Based on the current outlook, the operator expects service revenue to grow in the low single-digit range and its EBITDA margin to be about 31 per cent of service revenue. It expects capex, excluding a SGD80 million spectrum payment due this year, to be about 13 per cent of total revenue.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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