Starhub's Q3 profits fell 12.8% to $57m

It blamed higher operating costs in equipment and traffic expenses from roaming.

Starhub’s Q3 profits dropped 12.8% to $57m from $65.4m in the same period in 2017, an announcement revealed. However, its revenue climbed 3% to $582m from $565.2m in 2017.

The latest quarterly results continues a protracted profit downtrend after StarHub profits fell 22% in Q2 on the back of higher operating expenses and weaker performances as the country's telco wars heated up. 

Also read: Heated telco wars drag StarHub Q2 profit 22% to $63m

“Whilst our enterprise business continues to deliver growth in service revenues and customers, we continue to face the challenge of lower mobile revenues from wider customer choice in terms of Sim-Only plans,” Starhub CEO Peter Kaliaropoulos said. “Pay TV business continues to experience loss of customers to alternative content and packages.”

The telco’s operating expenses increased 5.6% to $506.7m from $479.8m in 2017 due to higher cost of sales which was partially offset by the decrease in other operating expenses, the financial statement noted.

Cost of sales for Q3 increased 15.5% due to higher cost of equipment sold, cost of services and traffic expenses, Starhub noted. Cost of equipment climbed 25.7% thanks to the higher volume of premium handsets sold and sales of smart home equipment, whilst traffic expenses rose 34.5% which the telco attributed to higher roaming costs in line with higher roaming revenue.

Its pay-TV segment saw revenue fall 14.1%, with average revenue per user (ARPU) dropping to $47 a month, from $51 in 2017. StarHub also observed that 423,000 households were subscribed, down by 9.4% which it attributed to a decline in customer rebates after StarHub stopped carrying certain channels in 2018.

Meanwhile, its broadband service revenues remained stable at $140.1m YTD as it added 7,000 customers YoY which brought its base up to 473,000, StarHub added.

Starhub maintains a positive business outlook amidst its plans to cease cable services in 2019 and ongoing organisational changes which includes a one-off $25m restructuring cost and 300 layoffs, according to its statement.

“With intensifying competition and customers having more mobile network operators (MNOs) and mobile virtual network operators (MVNOs) to choose from, StarHub will continue to focus on larger data plans in line with customers’ expectations,” the telco said. “For the Pay TV business, the focus remains on offering quality content.”