StarHub – BT

StarHub’s Q4 net profit up 15.1% at $92.6m

Mobile business main Q4 revenue driver at $312.2m, up 3.1%

STEADY performance from its mobile and broadband businesses pushed StarHub’s net profit for 2011 to $315.5 million, up 19.9 per cent from the previous year.

The triple-play provider saw fourth-quarter net profit grow 15.1 per cent to hit $92.6 million.

Q4 and full-year operating revenues rose 9.6 per cent to $612.6 million and 3.3 per cent to $2.31 billion respectively.

Mobile revenue – still the main contributor to StarHub’s business at 51 per cent in the last quarter of 2011 – grew 3.1 per cent over the corresponding period the year before, to $312.2 million. For the year, mobile revenue was $1.22 billion, up 3.1 per cent over 2010.

One factor driving mobile revenues was increased Arpu (average revenue per user) as Singapore’s smartphone-savvy population continued to spend more on mobile services and data, said StarHub’s chief operating officer Tan Tong Hai.

He said mobile post- paid revenue grew 6 per cent, and that non-voice services contributed 39.8 per cent of Arpu for the customer segment in Q4. ‘This reflects steady growth in mobile usage.’

The company is looking to mobile services growth to bolster the segment, since the country’s subscriber base is fairly saturated at 149 per cent, so growth by absolute numbers will be slow.

Post-paid Arpu stood at $74 for the year, up from $72 in 2010. Its post-paid base was 1.06 million users, 30,000 more than the previous year.

In contrast, while StarHub added 16,000 more pre-paid customers to total 1.12 million in the segment, its Arpu continued to decline as fewer consumed mobile services. As a result, pre-paid mobile services revenue dropped 6 per cent to $249.4 million over the year.

Its second pillar of revenue, its broadband business, took in $60.6 million for the fourth quarter and $241.7 million for the year, representing a growth of 2.7 per cent and 2.4 per cent over the same periods the year before.

The company’s fixed network services revenue also rose 3 per cent to hit $88 million in the fourth quarter, and 1.5 per cent to $336.7 million for the year.

The provider, which started rolling out services on the next-generation fibre nationwide broadband network (NBN) last year, started seeing those subscriptions contributing to its data and Internet services portfolio.

StarHub CEO Neil Montefiore noted that this contribution remains low for now, as the country’s base of subscribers starts to ramp up and as infrastructure owner OpenNet continues to cover the island.

The company’s pay cable TV revenue dipped from the year before, however, since StarHub lost exclusive broadcast rights to the Barclays Premier League (BPL) to SingTel. Revenue for 2011 was $376 million, dropping $19.4 million from 2010, as the company was forced to drop its ‘sports’ content subscription price. The company also said 2010’s revenues benefited from the FIFA World Cup.

Mr Montefiore pointed out that pay-TV revenue has since stabilised, and that its number of subscribers stood at 545,000 as at Dec 31, 2011, compared with 538,000 at end-2010.

StarHub estimates it had 45.2 per cent share of the country’s pay-TV market by the end of 2011.

Renewing pay-TV content and set-top boxes contributed to a rise in capex, commented Kwek Buck Chye, StarHub’s chief financial officer.

Higher sub-contractor costs for the company’s infrastructure expansion efforts also added to capex.

The group’s operating expenses (including cost of sales) went up 1.8 per cent to hit $1.94 billion. Higher marketing and staff costs were mitigated by lower other expenses such as maintenance and operating leases. It ended the year with cash and cash equivalents of $179.2 million, and is recommending a final fourth quarter dividend of 5 cents per share. It intends to maintain its annual cash payout of 20 cents at the end of this year.

The counter closed one cent higher at $2.83 yesterday.

The telco is also one of the first to acquire a vanity top-level domain name, ‘.starhub’, and has paid US$185,000 for the privilege.

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