StarHub's hubbing strategy under pressure as Pay TV slumps

Its subscriber base has fallen around 12% since 2Q15.

StarHub's Pay TV subscriber base continues its downtrend in the past quarter and this is hurting the telco's hubbing strategy, which involves it offering two or three bundle services together with discounts.

According to DBS Group Research, the telco's Pay TV subscriber base has already fallen around 12% to 477,000 from 2Q15's 545,000.

Analyst Sachin Mittal said this is due to the rising piracy and competition from OTT players such as Netflix.

"Though the company has looked to curb the subscriber losses by offering more attractive packages, we believe the drop will continue," Mittal said.

The analyst added that this puts pressure on margins as households with three or more services continue to contract.

To recall, StarHub reflected a 21% decline in net profit in Q2, as margins were impacted by cost increases relating to content costs, advertising, fibre broadband and managed service cost.