StarHub forecasts double-digit drop in 2020 revenue

Singapore operator StarHub predicted service revenue for the full year will decline 10 per cent to 12 per cent year-on-year due to lower consumer sales, mainly resulting from Covid-19 (coronvirus) measures, as Q2 mobile revenue tumbled.

CEO Peter Kaliaropoulos said the operating environment in the second quarter (to end June) was challenging, with lockdown measures in place, adding: “Our roaming, IDD and prepaid revenues continue to be impacted by global travel restrictions. We are experiencing tender delays and longer sales cycles in our enterprise business.”

Its 2020 capex budget, excluding spectrum, 5G capex and expenses relating to its IT transformation, is expected to be between 6 per cent and 8 per cent of total revenue. Capex in 2019 was 7.5 per cent of total revenue, short of its guidance of 8 per cent to 9 per cent.

The company estimates its initial 5G capital investment will be about SGD200 million ($146 million) over a five-year period, as it moves to deploy a joint network with rival M1. In April the two companies were awarded a licence [1] to build a nationwide standalone (SA) 5G network.

StarHub said it will start deploying the network this year, with a commercial launch expected in 2021. It targets 50 per cent coverage by end-2022 and nationwide service in 2025.

Q2 results
Net profit in Q2 fell 5.6 per cent year-on-year to SGD37.3 million, and service revenue dropped 15 per cent to SGD376 million.

Mobile service turnover dropped 25.4 per cent to SGD143 million, which the operator said was due to lower roaming and prepaid revenues, coupled with lower excess data usage and VAS revenues. It noted the decline was partially offset by stronger contributions from cybersecurity services.

Post-paid subscribers dipped 1.6 per cent year-on-year to 1.45 million, while prepaid subs decreased 19.6 per cent to 634,000. Post-paid and prepaid ARPU were down 25 per cent and 28.6 per cent to SGD30 and SGD10, respectively.

Average monthly data usage increased to 10GB from 7.5GB in Q2 2019.

[1] https://www.mobileworldlive.com/asia/asia-news/singtel-starhub-m1-combo-win-singapore-5g-licences

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