StarHub, Singapore’s second largest mobile operator by connections, reported a sharp drop in its Q4 profit and forecast a decline in service revenue for 2018.

The operator’s net profit in Q4 2017 dropped SGD40 million ($30.2 million) or 74 per cent from Q4 2016 to SGD14.3 million, which the company said was partly due to one-off provisions made for certain staff benefits to rationalise and retain talent, and for a leasing contract related to its cable network.

Total Q4 revenue increased 2 per cent year-on-year to SGD649 million as a 21 per cent growth in enterprise fixed services to SGD130 million and a 14.1 per cent jump in equipment sales to SGD77.3 million offset drops in mobile service revenue (down 4 per cent to SGD301 million) and paid-TV revenue (down 7 per cent to SGD86.9 million).

Consolidated service revenue for the quarter inched up 1 per cent year-on-year to SGD571.7 million. Broadband revenue was stable at SGD54.2 million.

StarHub CEO Tan Tong Hai said its enterprise fixed business played a key role and it registered a strong finish to the year with a second consecutive quarter of double-digit revenue growth. He added: “the strategy we have executed for our growth, such as our acquisitions of Accel and D’Crypt, is yielding results for us”.

Its mobile customer base was stable year-on-year at 2.3 million. The operator added 18,000 prepaid subscribers and lost 19,000 post paid: ARPU for the latter fell by SGD2 year-on-year to SGD68 and prepaid ARPU was down by SGD1 to SGD15.

For the full year, StarHub’s post-tax profit declined 27 per cent to SGD250 million. Capex for 2017 decreased 19 per cent to SGD296 million, or 12.3 per cent of revenue.

StarHub forecast 2018 service revenue will drop by between 1 per cent and 3 per cent year-on-year. Capex, excluding spectrum payments, is expected to be 11 per cent of total revenue.