Singapore’s second largest operator StarHub reported a drop in profit and revenue in 2016 as both prepaid and postpaid ARPU fell despite a 5.4 per cent increase it is mobile subscriber base.
The operator’s net profit fell 8.3 per cent year-on-year in 2016 to SGD341 million ($242 million), with a 33 per cent fall in its Q4 profit to SGD54 million due to higher subsidies on handsets, it said. EBITDA decreased 3 per cent to SGD690 million.
Revenue for the full year fell 1.9 per cent to SGD2.4 billion, which was mainly due to an 18 per cent drop in equipment sales to SGD187.5 million. Service revenue dropped a marginal 0.3 per cent to SGD2.2 billion.
Mobile revenue declined 2 per cent to SGD1.2 billion as postpaid and prepaid ARPU slid. In Q4, postpaid ARPU decreased 2.8 per cent year-on-year to SGD70, while prepaid ARPU fell nearly 12 per cent to SGD15 over the same period.
The operator added 245,000 LTE subs through 2016 to take its 4G total to 1.18 million or 52 per cent of total subs (up from 43 per cent at end 2015), according to GSMA Intelligence. Its prepaid user base increased 6.7 per cent to 920,000; its postpaid customers rose 4.7 per cent to 1.4 million.
Pay-TV revenue was also down, decreasing 3.4 per cent last year to SGD378 million, which the operator said was mainly due to a reduced customer base to 498,000 households.
Broadband was the main bright spot, with turnover rising 8.2 per cent to SGD217 million in 2016. This was driven by the higher mix of customers on fibre and take-up of higher speed cable plans, the company said. ARPU increased SGD3 year-on-year to SGD37. Its residential broadband customer base fell 1 per cent from a year ago, ending Q4 with 473,000 customers.
StarHub increased capex by 11.5 per cent to SGD367 million last year, with the capex to revenue ratio rising to 15.3 per cent in 2016 from 13.5 per cent in 2015.
The operator expects 2017 service revenue to remain at last year’s level and EBITDA margin to be between 26 per cent and 28 per cent of service revenue. Capex is forecast to fall to about 13 per cent of total revenue.
StarHub and rival M1 in January revealed they are discussing deepening an existing network sharing agreement, which could lower capex for both companies.
Competition in Singapore is set to increase after Australia-based fixed line operator TPG Telecom won a fourth mobile licence in an auction open only to new entrants. The company is clear to launch services from 1 Apri.
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