StarHub – BT

StarHub’s Euro 2012 victory not a nailbiter: analysts

No real impact seen, in reducing SingTel’s subscriber base nor in raising StarHub’s

Even with StarHub’s exclusive rights to the UEFA Euro 2012 in the bag, not much will change the tug-of-war for subscribers between it and SingTel, analysts reckon.

‘Overall, we do not expect the latest development to have a huge impact on SingTel’s subscriber base nor will it aggressively increase StarHub’s subscriber base,’ said OCBC’s Carey Wong in a note yesterday.

As at end-September, StarHub had 542,000 residential pay-TV customers, while SingTel’s mio TV had 335,000 customers.

While StarHub has exclusive rights to air Euro 2012, Singapore’s relatively new cross-carriage law will make it compulsory for StarHub to offer the matches to mio TV viewers who ask for them, at the same price.

While football fans might have plenty to cheer when the tournament runs from early June to early July next year, analysts have greeted the news with a yawn.

‘The impact on StarHub’s earnings should be minimal in either direction,’ said DBS Group Research’s Sachin Mittal in a report yesterday.

CIMB Research analysts Simeon Koh and Kelvin Goh noted that StarHub’s subscriber base rose only 0.6 per cent quarter-on- quarter during the Euro 2008 quarter.

For Euro 2008, in which StarHub was an exclusive broadcaster – ‘exclusive’ in a much stricter sense of the word, pre-cross-carriage law – its sports package customers paid $10-20 to watch the matches, while those not subscribing to StarHub’s sports package paid $50. Rates for Euro 2012 will be announced only next year.

Just how much Euro 2012 is costing StarHub and what viewers will in turn have to pay is something that analysts are divided on, compounded by how the usual bidding process might have been replaced with a negotiated deal this time around.

CIMB’s Messrs Koh and Goh ‘are not overly excited given that the broadcast rights may be very costly; and this one-month event may not give StarHub sufficient firepower to claw long-term market share’, they said in the report.

DBS’s Mr Mittal, however, believes otherwise. ‘This is not the most popular piece of content, and there was an absence of bidding. As such, we assume that content cost should not be a big burden for Star- Hub. SingTel appears to have stayed away as they paid a huge price tag for English Premier League (EPL) rights,’ he said.

Even if cost isn’t an issue for StarHub, the same cannot be assumed for mio TV viewers. ‘While cross- carriage regulation may help mio TV subscribers to watch these matches this time around, they could end up paying more, in our view. Consumers can subscribe directly to StarHub (with or without the sports package) rather than going through SingTel’s mio TV to enjoy savings through bundling discounts,’ Mr Mittal added.

In 2010, SingTel wrested a three-year deal to air the Barclays Premier League (BPL) matches from StarHub in a triumph of bidding, but reportedly paid $300 million for it.

Even StarHub’s decision to go solo in gaining exclusive rights to Euro 2012 has given some analysts pause. OCBC’s Mr Wong said: ‘We are quite surprised by the move, as a joint bid – as in the case of the recent World Cup 2010 – would make more sense, both economically and logistically.’

StarHub’s counter closed 9 cents, or 3.1 per cent, lower at $2.82 yesterday, while SingTel’s fell 6 cents, or 1.9 per cent, to $3.06.

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