Heated telco wars drag StarHub Q2 profit 22% to $63m
Mobile revenues fell to $214m.
StarHub extended its downward quarterly spiral for Q2 after the firm’s earnings fell 22 YoY to $63m, according to its financial statement.
Revenues from the mobile segment fell 7% YoY to $214m in Q2 whilst pay TV revenue also dropped 5% YoY to $85m over the same period due to a declining customer base. The company attributes the weak performance to the “increasingly competitive environment for consumer services and combination of OTT services.”
“Although the decline in mobile revenue was offset by higher revenues from managed services and the sales of equipment, the margins from these businesses were lower compared to the margin from the mobile business,” the company said in its financial statement.
TPG's commercial entry into the local telco scene is widely expected to hit StarHub the most amidst the company's reliance on the Singapore market.
StarHub’s operating expenses also hit $51.4m on the back of higher cost of sales. Sale costs rose 16.5% YoY amidst higher equipment and service costs as well as traffic expenses. The company also booked higher marketing and promotion expenses amidst new partnerships and product launches.
Broadband revenue and ARPU remained stable at $46m and $32m respectively with customer base hitting 471,000 in Q2
Revenue from the Enterprise Fixed segment also surged 22% YoY to $123m in Q2 on the back of customer acquisitions, growth in data usage and fixed services and higher demand for managed services and cybersecurity solutions.
Equipment sales revenue also rose 26.7% YoY in Q2 amidst higher sales of premium handsets and smart home equipment.
StarHub is paying a quarterly cash dividend of 4 cents per ordinary share.