Singapore’s second largest operator StarHub saw its Q2 net profit rise modestly despite flat service revenue growth as a drop in handset sales lowered subsidy costs.

Its net profit for the quarter rose 10 per cent to SGD108.6 million ($81 million), but EBITDA fell 1 per cent to SGD192 million. Total revenue was down 0.6 per cent to SGD586 million and service revenue was flat at SGD554 million. Equipment sales fell 9 per cent to SGD32 million.

Decreases in both mobile revenue (down 1.8 per cent to SGD305 million) and pay-TV sales (down 2.4 per cent to SGD95 million) were offset by an 11 per cent increase in broadband revenue to SGD54 million.

Its mobile customer base was up 3 per cent to 2.3 million, with postpaid users accounting for 61 per cent of the total. Postpaid ARPU increased SGD1 to SGD71, while prepaid ARPU was down SGD2 to SGD16.

Pay-TV customers fell 5 per cent year-on-year to 518,000, and pay-TV ARPU was stable at SGD52. Its broadband user base also fell slightly to 473,000, but broadband ARPU was up 11 per cent at SGD37.

“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 postpaid mobile base but also by our prepaid base.”

Operating expenses during the quarter dropped 1.4 per cent to SGD468 million. Marketing and promotion costs rose 13 per cent, but the cost of sales were down 4 per cent and depreciation fell 6 per cent.

Capex declined 23 per cent to SGD48 million in Q2 and 48 per cent to SGD90 million in H1.

In a revised guidance, StarHub expects service revenue to remain at last year’s level.