StarHub to focus on next-gen broadband

Website: Rapid TV News

Singaporean operator StarHub has reported year-end results largely stable on the previous year but has promised to “ramp up” broadband and fixed line services to leverage the upcoming launch of the nationwide next-generation broadband network.

StarHub’s broadband revenue is suffering, down 5% year-on-year to S$241 million. This was due to customers’ plan mix towards lower tier price plans, as well as increased discounts offered across all broadband subscriptions to drive multi-services take-up. Broadband accounted for 11% of StarHub’s total revenues.

Last April, StarHub unit Nucleus Connect won a government tender to operate the island’s next-generation broadband network. The network is expected to launch progressively from mid-2010.

Fixed Network revenues registered the highest growth of all StarHub’s units, up 6% to S$318 million year-on-year. Data and internet services revenue, which makes up 85% of the Fixed Network revenue, grew 9% to S$269 million from the previous year. But Fixed Networks revenue remains the smallest part of the mix, at just 4%.

Mobile is the greatest contributor, accounting for 51% of StarHub’s revenues, but up just 1% to S$1,094 million.

Pay-TV revenues rose 2% to S$406 million from S$398 million, 19% of StarHub’s total revenues. The small rise was driven by a marginally larger customer base, which increased 3% year-on-year, from 524,000 at end-2008 to 539,000 at end-2009. But ARPU came in at S$56 a month, S$1 lower than a year ago.

The operator may be hit even heavier during 2010, with English Premier League soccer switching to rival Mio TV, the IPTV platform from SingTel, from mid-year. While that may save the company money in the short term, StarHub said it expected higher content costs in other areas as both pay-TV operators seek to enhance their offerings for viewers.

The percentage of total “Hubbing” homes (those subscribing to two or more services) stands at 55%, with 44% subscribing to all three services.

“Considering the competitive landscape and slow economy, we have delivered a stable FY2009 result, with all our lines of business performing as expected,” said Mr Neil Montefiore, CEO of StarHub. “For 2010, Hubbing continues to be our main strategy; delivering a comprehensive range of branded quality content and innovative services across our multi-service platforms to delight our customers.”

Operating revenue for the year rose just 1% to S$2,150 million (S$550 million for the fourth quarter). EBITDA rose 1.4% to S$654 million, a margin of 32%, with net profit up just under 3% to S$320 million.

StarHub’s results statement said the company expected 2010 revenue growth to be “in the low single-digit range” with EBITDA margin around 30%.