The latter has successfully set up a successful broadband business in Australia.
TPG Telecom's entry as the fourth telco is already posing threats to the mobile segments of the three incumbents, most especially M1, whose entire subscriber base rests on the city-state. But as it turns out, it was StarHub which could face a bigger threat in TPG.
According to RHB Research, TPG could look to replicate its successful fixed broadband business in Australia and therefore potentially thwarting StarHub’s broadband segment.
This would then put StarHub's hubbing strategy into a real test, as it highly depends its customer retention on bundling its mobile services with its payTV and fixed broadband services.
"Over 50% of StarHub’s service revenue and EBITDA are derived from the mobile segment, which renders it susceptible to competition from the budding fourth mobile entrant, TPG, which is slated to unveil attractively priced and innovative plans by 2018," RHB said.
The research firm noted that the group's hubbing scorecard, the number of households taking up two or more services stood at 58.4% in 3Q16, down from 59.9% a year earlier.
With this, where could StarHub expect steady growth, one may ask. RHB said StarHub is already a leader in enterprise solutions for the hospitality sector and holds a 90% share in this segment.
"Enterprise revenue has grown to be the second largest revenue contributor to the group, at 16.8% in 3Q16, overtaking payTV revenue. Enterprise EBITDA margin is comparable – if not superior – to mobile margins, which should provide good earnings uplift in the longer term," RHB pointed.
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