StarHub's profits dropped 26.2% to $201.5m in 2018

It blamed lower contributions from its mobile and Pay TV segments.

StarHub ended 2018 on a dismal note when its profits fell 26.2% YoY to $201.5m from $273m in 2017, an announcement revealed. Revenue also slipped 2% YoY from $2.41b to $2.36b.

In Q4, profits extended its downward spiral as it crashed 61.8% YoY to $19.8m from $51.8m, whilst revenue dropped 9.8% YoY to $619.5m from $686.9m during the same period in 2017.

The weak performance was attributed to lower revenue from its mobile and Pay TV segments, as well as lower broadband and sales of equipment, the firm explained in its financial statement.

Also read: Starhub's Q3 profits fell 12.8% to $57m

Mobile service revenue in Q4 and FY18 dipped 13.7% and 8.1% YoY to $30.8m and $73.1m, respectively. The decrease was on the back of lower international direct dial (IDD), voice and data usage revenue, lower subscription revenue due to higher phone subsidies given to customers, and a higher mix of SIM-only plans.

However, the decline was partially offset by higher revenue from roaming and mobile value-added services (VAS), StarHub said. Although mobile market penetration in Singapore remained high at about 147%, the telco’s post-paid customers rose 2.5% YoY to 1.4 million.

Pay TV service revenue fell 19.1% in Q4 and 11.9% YoY in FY18 to $16.8m and $42.2m, respectively due to lower subscriber base.

“A net total of 14,000 customers churned in Q4, slightly lower than the previous quarter,” StarHub’s CEO Peter Kaliaropoulos added in a statement. The total number of Pay TV customers as of December 2018 was 409,000 with an average revenue per user (ARPU) of $49.

Also read: StarHub's aggressive cost-cutting could yield $210m in savings: analyst

Meanwhile, enterprise fixed service revenue for Q4 and FY18 rose 12% and 16% YoY to $15.7m and $70.3m, respectively amidst consolidation of Ensign InfoSecurity and cryptographic technology firm D’Crypt. Broadband service revenue remained stable at $185.8m in FY18. StarHub reportedly added 15,000 customers to its broadband service, bringing its base to 482,000.

Based on the market volatility, StarHub said it expects its 2019 service revenue to be stable to a decline of 2% YoY. Group service earnings before interest, tax, depreciation and amortisation (EBITDA) is forecasted to be between 26% to 28%.

Also read: StarHub gears up to defend mobile market share

In November 2018, StarHub announced it would pull the plug on its cable services after 30 June 2019 to make way for its all-fibre network and provide better internet and TV services to its customersas it simplifies its business to contend against newcomer TPG who is expected to enter the fray in Q2 2019.

“As part of our transformation plan, driven by the ongoing requirements to deliver a better customer experience, we have introduced a simplification of our mobile plans with the launch of the ‘Hello Change’s campaign,” Kaliaropoulos highlighted.