What StarHub has to brace for as risk of new telco looms

Its postpaid ARPU would suffer a 1% squeeze.

Even though StarHub's fate may see better days than that of M1, it would still have to brace for jabs from the possible new telco.

According to MayBank Kim Eng analyst Gregory Yap, the potential entry of a new competitor in the telco scene may lead to slower growth for StarHub's postpaid net-adds, from 50,000 to 25,000 in 2017 to 15,000 in 2018.

Moreover, its postpaid average revenue per user may be squeezed by 1% per annum.

But good news for StarHub, as it should lose less market share than M1 because of its multi-play hold on subscribers.

"We believe that Starhub should lose less market share than M1 due to its stronger hold on subscribers (e.g. consumer hubbing and improving corporate stickiness due to its enterprise strategy, where corporate users who are also its consumer customers are given larger incentives to stay on its network)," Yap said.

He also argued that one upside for StarHub is a merger with M1 that could add heft and resources to compete against the possible new entrant and Singtel, which would be the least affected among the three telco giants.

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