StarHub expects more virtual telco consolidation; H1 profit jumps on one-off Ensign gain

StarHub, a leading telecommunications company in Singapore, anticipates further consolidation of virtual network operators (MVNOs) by larger telcos, CEO Nikhil Eapen stated on Thursday (Aug 13). Eapen believes that smaller MVNOs will gravitate towards and eventually be absorbed by the big players in the industry. This expectation follows an announcement made on August 6, where MyRepublic Mobile 4G customers will migrate to StarHub's network, expected to bring "many tens of thousands" of customers onto StarHub's platform.

The move follows StarHub's acquisition of MyRepublic's broadband business last year. Eapen did not comment on whether StarHub had discussed acquiring MyRepublic's mobile business. As Singapore's telco operators face shrinking margins due to intense competition, Eapen believes the completion of the MyRepublic acquisition has gained added impetus from the poor state of the sector.

StarHub's blended ARPU for the period ended June 30 was S$20, down from S$21 the previous year. The mobile ARPU has fallen by between 36 and 41 percent since 2017 due to rising price competition. Despite a jump in net profit to S$255.6 million for the first half ended June 30, StarHub's revenue fell 14.1 percent to S$969.7 million, mainly due to lower contributions from its consumer and enterprise segments and the deconsolidation of Ensign InfoSecurity.

The company intends to dispose of its remaining 38 percent stake in Ensign, seeking to complete the sale by the end of the year. StarHub remains on track towards its Ebitda guidance of 75 to 80 percent of 2025's Ebitda and declared an interim dividend of S$0.03 per share, payable on September 4.