Skewed by one-off items, StarHub has reported earnings of $47.9 million for 1HFY2025, down 41.7% y-o-y.

 

The company explains that the lower bottom line is distorted by a combination of lower ebitda and also a one-off forfeiture payment of $14.1 million for the return of one 700 MHz spectrum lot in 1H2025.

 

If the exceptional items were excluded, earnings was down 23% to $62 million for the same half year ended June.

 

Total revenue in 1HFY2025 was $1.1 billion, up 2.2%. Cybersecurity services revenue grew at the fastest pace with a gain of 20.1%, followed by regional enterprise that was up 6.8% and broadband, up 4.%. Mobile, on the other hand, was down 5.4% and entertainment dropped by a bigger magnitude of 9.1%.

 

Despite the lower earnings, StarHub plans to keep its interim dividend at 3 cents.

 

For the current 2HFY2025, the company is adopting a " more aggressive commercial stance" . As such, it is lowering its FY2025 EBITDA outlook from the earlier &ldquo stable&rdquo y-o-y to between 88% to 92% of the FY2024 EBITDA.

 

" This revision reflects a deliberate strategic decision to preserve competitiveness and defend market share while continuing to invest in long-term growth levers," the company says.

 

StarHub CEO Nikhil Eapen describes the market where " eroding prices challenges industry sustainability" .

 

" We intend to remain aggressive across brands and segments in the domestic consumer market to position for eventual market recovery," he adds.

They also see wider advantages for the industry as competition is generally expected to ease

 

[SINGAPORE] Recent surprise acquisitions in Singapore&rsquo s telecommunications space may have raised eyebrows, but analysts see the moves by StarHub, M1 and Simba to largely benefit the industry, with competition expected to ease. 

 

Earlier on Tuesday (Aug 12), StarHub&rsquo s wholly owned subsidiary &ndash StarHub Online &ndash announced that it had acquired its remaining 49.9 per cent stake in MyRepublic Broadband with related operational assets for S$105.2 million. 

 

Prior to this move, there was speculation for years that the telco would be acquiring M1. That no longer stands, with Keppel&rsquo s proposed, all-cash deal announced on Monday to divest M1&rsquo s telco business to Simba Telecom at an enterprise value of S$1.43 billion. 

 

Analysts from RHB Group Research on Wednesday recognised how this decision by StarHub consolidates its leadership in the fibre broadband space with full ownership and access to MyRepublic&rsquo s brand equity. 

 

At present, the local telco player ranks first for broadband revenue share, and has the second-largest number of fibre broadband subscriptions after incumbent Singtel. 

 

The analysts explained that the fibre broadband business is an integral part of StarHub&rsquo s multi-brand, multi-segment strategy, as it supports the group&rsquo s quad play offerings. 

 

&ldquo It provides a high degree of customer stickiness via product and service bundles with potential for household average revenue per user (ARPU) accretion,&rdquo they noted in their report. 

 

The telco&rsquo s fibre broadband ARPU in particular has also seen a progressive uplift in recent quarters, supported by the upselling of higher-speed plans of above 5 gigabits per second. This has contributed to a 4.9 per cent year-on-year increase in broadband revenue in the first quarter of this year, despite the slight weakness in fibre broadband subscriptions. 

 

If the consolidation of the fibre broadband market is viewed positively, there is a case where prices could be driven up, under circumstances where competition for bundled services heats up with the Simba-M1 deal moving forward, wrote the analysts. 

 

On the whole, however, StarHub&rsquo s latest move should in turn drive greater value-creation for customers, said the RHB Group Research analysts, as they kept a &ldquo neutral&rdquo rating on the counter in their report. They also had no changes to their earnings forecast, pending the release of the telco&rsquo s results on Thursday for the first half of this year. 

 

Hussaini Saifee, equity research analyst at Maybank Securities, said that StarHub will be a &ldquo beneficiary of network synergies&rdquo , as it operates a singular 5G access network along with M1. 

 

The proposed sale of M1&rsquo s telco business to Simba Telecom carries forward the assumption that, moving forward, even Simba&rsquo s spectrum will be deployed over the singular network, which will help StarHub. 

 

&ldquo StarHub won&rsquo t be footing the bill of industry consolidation and complex network integration and (so), we see better certainty of its dividends,&rdquo he wrote in his Monday report. 

 

Singtel to gain from competitor moves, but to limited extent: Maybank

As most analysts continue to see competition as subsiding with greater consolidation in the local telco market, Saifee believes that Singtel will also benefit from recent developments. 

 

&ldquo That said, less than 10 per cent of Singtel&rsquo s sum-of-the-parts valuation comes from Singapore consumers, which means such positive impact will be relatively limited,&rdquo the analyst caveated. Saifee kept a &ldquo buy&rdquo rating on Singtel, in light of how all of the company&rsquo s operating units and associates are trending in a positive direction. 

 

Citi analysts estimated that Singtel will generate around 9 per cent of group revenue from local mobile services in their Monday report, while StarHub will generate 29 per cent of revenue. 

 

While the analysts had originally foreseen &ldquo a different marriage outcome&rdquo , in relation to the recent proposed acquisition of M1&rsquo s telco business by Simba, they generally believe that consolidation should be positive for the overall industry nonetheless. This is due to the potential for market repair under a three-player market, where all operators will have scale. 

 

&ldquo The need to drive scale has driven intense price competition in the market, with this as the only way to drive profit,&rdquo they wrote on Monday. &ldquo (Thus), we see this development as an avenue to potentially de-escalate competition in Singapore, and should be positive for StarHub and Singtel.&rdquo

Instead of playing the spurned groom, StarHub could well see an opening to scoop up new subscribers and boost its market share

 

[SINGAPORE] When news broke of the sale of M1 to Simba, it seemed like StarHub was left at the altar, as the market whispers of a merger had reached fever pitch at the start of 2025.  

 

With the sale of M1&rsquo s consumer business to the smallest Singapore telco for S$1.4 billion in cash, the market reacted negatively to StarHub&rsquo s failure to seal the deal. Starhub&rsquo s share price fell some 6.6 per cent on Monday (Aug 11), the day the deal was announced.

 

But not buying M1 might be a good move for StarHub in the long run. 

 

Under Keppel&rsquo s wing, M1&rsquo s consumer business has not been the focus. Revenue growth in the first half-year of 2025 was driven mainly by the ICT business, which Keppel is retaining. Enterprise revenue grew from S$245 million in H1 2024 to S$335 million in H1 2025, while consumer revenue fell from S$348 million in H1 2024 to S$337 million in H1 2025.

 

This is a key theme that Keppel has fostered, steadily increasing enterprise revenue at M1, even as consumer revenue headed the other way.

 

With the consumer mobile market flooded for choice with both telcos and mobile virtual network operators (MVNO), there is some wisdom in searching for growth in a segment that is not as saturated. 

 

A billion dollars is a lot to pay for a business that is facing such stiff competition, with depressed margins that are likely not to trend upwards any time soon. Without the enterprise segment of M1&rsquo s business, the 7.3 multiple of earnings before interest, taxes, depreciation and amortisation of S$195.4 million seems high. 

 

Then, there is the biggest challenge of integration, which corporates have never really tackled well. Anecdotally, there are stories of people within Singapore corporates who still introduce themselves as part of the acquired company, despite the acquisition having happened decades ago.

 

Simba will now have to tackle integrating M1&rsquo s staff, infrastructure and operations into its fold, where the culture battle begins. M1, being an incumbent, will likely not have the same scrappy attitude that Simba embodies. Integrating tech and infrastructure will be less of a hassle since machines lack organisational inertia or the reluctance to change how they operate.

Simba&rsquo s case is even more unique, given that it is a smaller company swallowing a bigger one, which would affect the success of the integration. The ratio of M1 to Simba staff could lead to Simba becoming more like M1, rather than the other way round.

 

This acquisition will likely see some churn from M1&rsquo s customer base as end-users ponder what it means to them. Simba will either have to prove to M1 customers that nothing will change for them, or accept that M1 will look more like Simba &ndash a low-cost telco. 

 

Should M1 look more like Simba, a stripped-down version of a telco with minimal offline shops, there could be customer churn among those looking to have a physical presence to solve their issues.

 

Furthermore, this could also prove to be a potential catalyst for StarHub to hunt for more market share during the period between the completion of the deal and the integration. Simba&rsquo s parent company is raising funds through a share placement and bank loan for the acquisition, and turned profitable only recently &ndash in its H1 FY2025 ended Mar 31. 

 

This would leave Simba more vulnerable in defending M1&rsquo s market share if StarHub and Singtel decide to make a play for more subscribers. StarHub has deeper pockets than Simba, and M1&rsquo s target audience is more similar to StarHub than Simba.

 

Convincing M1&rsquo s customers to switch to StarHub amid the uncertainty of a transition to Simba would be an easier sell than Simba convincing M1 customers to stay.

 

The only thing that could spoil the future upside for StarHub is if regulators veto the deal, which could leave the telco market back at square one.

 

Should the deal go through, StarHub might be better off as a competitor than a beau of M1.