With StarHub's earnings, is industry consolidation inevitable?
We saw the earnings from StarHub Thursday night and while there was overall top and bottom line growth, their earnings shed some light on the operating environment in this industry here in Singapore. Competition is fierce amongst the telcos, and with mobile phone penetration floating well above 100%, the pressure on 'the big 3' telcos to come up with alternative revenue streams is immense.
Could consolidation in the industry be inevitable? IMHO, the factors are there pointing to that.
Looking at their earnings, two specific areas jumped out at me: 1) revenue growth was flat for its cable business and 2) its post-paid mobile subscriber customer based dipped. To me, those two things don't bode well at all given that cable is such a an integral part of StarHubs business in addition to mobile. With mobile still being the bread and butter of the business, their post-paid customer base seems to be on the decline somewhat as well.
After reading Starhubs earnings, you really have to ask yourself what the future holds for StarHub and who will out muscle who amongst the telcos here in Singapore.
Quite frankly, I think three major players is far too many here in Singapore. I wouldn't be surprised if you saw consolidation. SingTel without a doubt holds the top spot here in Singapore and undoubtedly will be for some time I think. But you almost wonder if M1 and SatrHub came together what the benefits would be not only for shareholders but for consumers.
Mergia mania maybe will even make its way over to Singapore, as we have seen plenty of companies in the United States come together under situations similar. The only question is, are executives thinking the same thing. Only time will tell.
Curtis Bergh
As always please see your licensed financial advisor before making any investment decisions
ArchivesCould consolidation in the industry be inevitable? IMHO, the factors are there pointing to that.
Looking at their earnings, two specific areas jumped out at me: 1) revenue growth was flat for its cable business and 2) its post-paid mobile subscriber customer based dipped. To me, those two things don't bode well at all given that cable is such a an integral part of StarHubs business in addition to mobile. With mobile still being the bread and butter of the business, their post-paid customer base seems to be on the decline somewhat as well.
After reading Starhubs earnings, you really have to ask yourself what the future holds for StarHub and who will out muscle who amongst the telcos here in Singapore.
Quite frankly, I think three major players is far too many here in Singapore. I wouldn't be surprised if you saw consolidation. SingTel without a doubt holds the top spot here in Singapore and undoubtedly will be for some time I think. But you almost wonder if M1 and SatrHub came together what the benefits would be not only for shareholders but for consumers.
Mergia mania maybe will even make its way over to Singapore, as we have seen plenty of companies in the United States come together under situations similar. The only question is, are executives thinking the same thing. Only time will tell.
Curtis Bergh
As always please see your licensed financial advisor before making any investment decisions
Labels: Singapore, StarHub, telcos in Singapore
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