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SingTel should have seen it coming: MDA

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Source
Business Times
Date
26 Apr 2013
Author
Joyce Hooi

Telco well aware of risks, implications when bidding for BPL, says regulator

THE Media Development Authority (MDA) was unmoved by SingTel's dire predictions of higher Barclays Premier League (BPL) subscription fees and said yesterday that the pay-TV operator should have foreseen the implications of the cross-carriage rule.

"The cross-carriage measure has been widely consulted upon before it came into effect since 2011. SingTel cannot claim to be unaware of the policy objectives and requirements of the cross-carriage measure," the MDA said.

"In negotiating the BPL contract, SingTel would have taken into account commercial and legal risks including the possibility that the cross-carriage measure may be triggered ... and the implications on pricing."

MDA's statement was in response to SingTel's pronouncement on Wednesday that MDA's decision to make SingTel share BPL content with StarHub would leave the red camp with little incentive to subsidise BPL content for StarHub viewers as it had for its own customers so far.

And since the MDA's cross-carriage rule mandates one price across all operators for the same content, SingTel's mio TV would have to levy these higher fees on both StarHub and new mio TV BPL subscribers when BPL season starts in August.

MDA, however, had no truck with that, saying, "The setting of prices for consumers is a matter of commercial consideration by SingTel."

StarHub, in response to SingTel's assertion that the decision tilts the playing field in the former's favour, said archly yesterday: "The decision benefits Singapore viewers who now have the choice to watch the BPL on their preferred pay TV operator's platform for the same price."

"Interestingly, there were no objections from industry players (including our competitor) when we cross-carried the Uefa Euro 2012 on our competitor's platform last year."

Under the cross-carriage rule, operators have to share content bought exclusively with rival operators upon request. Mio TV's BPL content, acquired on a "non-exclusive" basis last year, was deemed "exclusive" by the MDA on Wednesday.

It found that SingTel's deal with Football Association Premier League had clauses which were likely to restrict the BPL rights from being acquired by another pay-TV retailer.

SingTel insists the deal is a non-exclusive one and is appealing against MDA's decision.

On Wednesday, SingTel also pointed out that its sports offering of $34.90 a month, which includes BPL, was priced cheaper than StarHub's offering in 2009.

When asked to comment, StarHub said: "This is an unfair comparison since the $49 cited is the sum of three basic groups ($24) and the sports group ($25). Furthermore, at the time, the Sports Group alone carried 13 channels which covered a wide range of sports beyond BPL content such as tennis, golf and Formula One," it said.

And while SingTel has asked for a "stay of implementation" so that it can hold off on working with StarHub to share the content while the appeal is heard, StarHub is forging ahead, regardless.

"We are complying with MDA's direction and are already making operational arrangements in preparation for the cross-carriage of the next three BPL seasons," StarHub said.

There is little to envy about SingTel's position. "This is a major setback for SingTel in its quest to capture a bigger piece of the pay-TV pie. By having to share the BPL, SingTel's ability to have users sign up to mio TV is sharply reduced," CIMB Research analyst Kelvin Goh said in a report yesterday.

StarHub said yesterday that it was "too early" to give estimates on viewership figures.

It will be able to carry BPL content without paying for the broadcast rights. Its viewers will subscribe for BPL content from SingTel, but may remain on the StarHub set-top box. StarHub will be paid a carriage fee based on the number of channels, set up fees and also a per-customer fee.

"StarHub stands to gain a little as this lowers the likelihood of churns and generates revenues from providing cross-carriage," said CIMB's Mr Goh.

The fight for market share is far from over, said Vivek Couto, executive director of Media Partners Asia. "StarHub can't just depend on the BPL. It's got to have an even stronger and more seamless product," he said.

As SingTel and StarHub slug it out on the pitch, CIMB's Mr Goh summed it up for the investor: "Stay invested in M1, our top Singapore telco pick."

Both SingTel and StarHub closed three cents higher at $3.78 and $4.58, respectively, yesterday.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Does Starhub stand to gain alot from this?

I remember the previous CEO saying that Starhub did not really make any profits from EPL few years back......

Summary of Starhub's result:

Total operating revenue decreased 2% to S$580 million and service revenue was at S$547 million. The Group‟s EBITDA grew 3% to S$182 million from S$177 million previously. Profit before taxation was at S$110 million or 3% higher year-on-year (YoY) and net profit after tax grew to S$91 million. Free cash flow at S$92 million was 11% lower compared to last year‟s S$104 million. Cash capital expenditure was 15% higher at S$47 million compared to the same period last year.

Interim dividend: $50 per lot (as usual)

Payable date: 30 May

(09-05-2013, 06:35 PM)Dividend Warrior Wrote: [ -> ]Summary of Starhub's result:

Total operating revenue decreased 2% to S$580 million and service revenue was at S$547 million. The Group‟s EBITDA grew 3% to S$182 million from S$177 million previously. Profit before taxation was at S$110 million or 3% higher year-on-year (YoY) and net profit after tax grew to S$91 million. Free cash flow at S$92 million was 11% lower compared to last year‟s S$104 million. Cash capital expenditure was 15% higher at S$47 million compared to the same period last year.

Interim dividend: $50 per lot (as usual)

Payable date: 30 May

You own the Company right?

Any further insights other than the results summary?

Was it within your expectations, which aspect?

What would you be expecting moving forward?

Thanks.

(09-05-2013, 06:35 PM)Dividend Warrior Wrote: [ -> ]Summary of Starhub's result:

Total operating revenue decreased 2% to S$580 million and service revenue was at S$547 million. The Group‟s EBITDA grew 3% to S$182 million from S$177 million previously. Profit before taxation was at S$110 million or 3% higher year-on-year (YoY) and net profit after tax grew to S$91 million. Free cash flow at S$92 million was 11% lower compared to last year‟s S$104 million. Cash capital expenditure was 15% higher at S$47 million compared to the same period last year.

Interim dividend: $50 per lot (as usual)

Payable date: 30 May

Hi, I am new to starhub, why is the NTA of the company so low?

The Straits Times
www.straitstimes.com
Published on May 10, 2013
StarHub posts 3% growth in Q1 net profit to $91m

By Irene Tham Technology Correspondent

STARHUB yesterday reported a 3 per cent growth in net profit to $91 million in its first quarter. But its revenue for the three months to March 31 declined 2 per cent to $580 million.

Despite the drop in customer numbers, pay TV revenue dipped only 1 per cent to $95 million, buoyed by higher subscription revenue. The average revenue per user (ARPU) rose $1 to $52 per month during the quarter.

"I think we are managing the (average monthly) churn well at 1.2 per cent," newly installed chief executive Tan Tong Hai said.

The company hopes a deal to show top-flight English football will help stem an erosion in its Pay TV subscribers that has now occurred for five consecutive quarters.

The telco said that it lost 4,200 pay TV customers in the three months to March 31, reducing its user base to 532,000 households.

But it was worse in the final three months of last year when 5,000 customers left.

Mr Tan said that access tothe English Premier League content under the Media Development Authority's (MDA) "cross-carriage" rule will help stem losses.

Last month, the MDA directed SingTel to share the broadcast rights for the next three seasons of EPL - starting with StarHub in August.

Customers will be very happy to keep their set-top box, said Mr Tan. "We are doing all the necessary preparations to ensure that the EPL feeds will run smoothly (on our platform)," he added.

Revenue for mobile services - the firm's cash cow - decreased 2 per cent to $302 million, as post-paid subscribers roam less overseas. Roaming revenue accounted for 15 to 20 per cent of total mobile revenue.

"Consumers are getting smarter these days and are using Wi-Fi when overseas," said outgoing chief financial officer Kwek Buck Chye.

The company yesterday announced that Mr Kwek, 60, will retire by end September.

It also named his successor, Mr Nicholas Tan Kok Peng, 54, who is currently the senior vice-president of corporate planning at Singapore Technologies Telemedia.

Post-paid mobile services revenue decreased 2 per cent to $241 million, accounting for 80 per cent of the mobile revenue mix.

StarHub's total mobile subscriber base - about half were pre-paid customers - grew 17,000 during the quarter to 2.2 million. Of these, 270,000 subscribers were on fourth-generation (4G) smartphone data plans.

Broadband revenue grew 2 per cent year on year to $62 million. However, subscriber numbers were flat compared with the preceding quarter, standing at 444,000 households as at March 31.

StarHub attributed the lack of growth in subscriber numbers to delays in the provisioning of wholesale fibre broadband services by OpenNet, the builder of Singapore's fibre broadband infrastructure.

StarHub retails fibre broadband services.

"If we can lay our own ducts and fibre-optic (cables), we will do it," said Mr Kwek, adding that the telco has brought up the delays to industry regulator Infocomm Development Authority.

Earnings per share was 5.3 cents for the quarter, up from 5.15 cents, while net asset value per share was 75 cents at March 31, up from 71.5 cents a year ago.

The company intends to pay a quarterly dividend of five cents a share. StarHub shares closed down one cent at $4.72 yesterday.

itham@sph.com.sg

The company hopes a deal to show top-flight English football will help stem an erosion in its Pay TV subscribers that has now occurred for five consecutive quarters.

The telco said that it lost 4,200 pay TV customers in the three months to March 31, reducing its user base to 532,000 households.



Hope they can fight back against sinktel in the pay TV segment hehe

vested

---

StarHub Ltd: Downgrade to SELL – pricey now
ocbc research

StarHub Ltd posted 1Q13 revenue of S$580.1m, down 2% YoY and 11% QoQ, but still met 23% of our full-year forecast. Net profit grew 3% YoY and 4% QoQ to S$91.2m, meeting 25% of our FY13 forecast. And as guided, StarHub declared a quarterly dividend of S$0.05/share, payable on 30 May 2013. For 2013, StarHub now expects to see low single-digit revenue growth, versus single-digit growth guidance previously. Management says it is being more cautious in view of the 2% drop in revenue in 1Q13. Otherwise, it has kept everything else unchanged. Stock price has outperformed not only its peers but also the STI. While part of the run-up could be driven by investors searching for yield, current valuation looks pricey; yield has also fallen to 4.2%. A more “risk on” approach could also see investors switching out of defensive stocks. As such, we downgrade our call from Hold to SELL, with an unchanged DCF-based fair value of S$4.00. (Carey Wong)

---

starhub down 3% today, quite a number of house downgraded it to SELL rating, gg

Analyst reports

Maybank Kim Eng, Rating SELL, TP $4.20
- Downgrade to SELL. Admittedly, this is a risky call amidst the current liquidity and yield compression conditions, but we had held on to our BUY call with the highest TP on the Street even when the stock exceeded all expectations. Switch to M1.
- Now the dividend spread is getting ever thinner, competition is heating up, revenue guidance cut and demands on cash are growing more onerous. While gearing is ultra-low, the nearest window for more dividends has now been pushed back with a delay in the 4G spectrum auction toward 2H12.
- The fixed dividend and yield of 4% may still provide some comfort and prevent an immediate rush to the exit, but we would still advise clients to sell into strength. Our DCF-derived TP is SGD4.20 (prev SGD4.31)

http://remisiers.org/cms_images/research...052013.pdf

OCBC Investment Research, Rating SELL, TP$4.20
StarHub Ltd: Downgrade to SELL – pricey now
StarHub Ltd posted 1Q13 revenue of S$580.1m, down 2%
YoY and 11% QoQ, but still met 23% of our full-year
forecast. Net profit grew 3% YoY and 4% QoQ to S$91.2m,
meeting 25% of our FY13 forecast. And as guided, StarHub
declared a quarterly dividend of S$0.05/share, payable on
30 May 2013. For 2013, StarHub now expects to see low
single-digit revenue growth, versus single-digit growth
guidance previously. Management says it is being more
cautious in view of the 2% drop in revenue in 1Q13.
Otherwise, it has kept everything else unchanged. Stock
price has outperformed not only its peers but also the STI.
While part of the run-up could be driven by investors
searching for yield, current valuation looks pricey; yield has
also fallen to 4.2%. A more “risk on” approach could also
see investors switching out of defensive stocks. As such, we
downgrade our call from Hold to SELL, with an unchanged
DCF-based fair value of S$4.00.

http://remisiers.org/cms_images/research...10-OIR.pdf

Philips Security
StarHub Ltd – Results (Ken Ang)
Recommendation: Reduce
Previous close: S$4.72
Fair value: S$4.40
 1Q13 Net income of S$91.2 higher y-y by 3.2%
 FY13 Revenue growth guidance lowered from single digit to low single digit. Other guidance maintained.
 Maintain “Reduce” with revised TP of S$4.40, based on current high share price, coupled with low revenue growth potential

http://remisiers.org/cms_images/research...051013.pdf

(09-05-2013, 11:08 PM)LLI Wrote: [ -> ]

(09-05-2013, 06:35 PM)Dividend Warrior Wrote: [ -> ]Summary of Starhub's result:

Total operating revenue decreased 2% to S$580 million and service revenue was at S$547 million. The Group‟s EBITDA grew 3% to S$182 million from S$177 million previously. Profit before taxation was at S$110 million or 3% higher year-on-year (YoY) and net profit after tax grew to S$91 million. Free cash flow at S$92 million was 11% lower compared to last year‟s S$104 million. Cash capital expenditure was 15% higher at S$47 million compared to the same period last year.

Interim dividend: $50 per lot (as usual)

Payable date: 30 May

Hi, I am new to starhub, why is the NTA of the company so low?

IIRC it is related to the acquisition of SCV

I often quote starthub as an example of how to value a company using cashflow and ROIC rather than PTBV or ROE. These latter 2 numbers look ridiculous on starhub

The main asset of "SCV" had been the "pipe" ie a captive market once signed on. Mio presence has already diminished that moat. Smart TV and internet streaming via fiber for eg Youtube's pay TV will further erode that competitive advantage. The question as always is how long it can drag. Impact on Starhub's pay TV had been minimal until last year.

(11-05-2013, 11:42 AM)specuvestor Wrote: [ -> ]

(09-05-2013, 11:08 PM)LLI Wrote: [ -> ]

(09-05-2013, 06:35 PM)Dividend Warrior Wrote: [ -> ]Summary of Starhub's result:

Total operating revenue decreased 2% to S$580 million and service revenue was at S$547 million. The Group‟s EBITDA grew 3% to S$182 million from S$177 million previously. Profit before taxation was at S$110 million or 3% higher year-on-year (YoY) and net profit after tax grew to S$91 million. Free cash flow at S$92 million was 11% lower compared to last year‟s S$104 million. Cash capital expenditure was 15% higher at S$47 million compared to the same period last year.

Interim dividend: $50 per lot (as usual)

Payable date: 30 May

Hi, I am new to starhub, why is the NTA of the company so low?

IIRC it is related to the acquisition of SCV

I often quote starthub as an example of how to value a company using cashflow and ROIC rather than PTBV or ROE. These latter 2 numbers look ridiculous on starhub

The main asset of "SCV" had been the "pipe" ie a captive market once signed on. Mio presence has already diminished that moat. Smart TV and internet streaming via fiber for eg Youtube's pay TV will further erode that competitive advantage. The question as always is how long it can drag. Impact on Starhub's pay TV had been minimal until last year.

The uniqueness of Starhub's equity after SCV acquisition had been discussed in detail in this thread. Probably a search will able to get the detail of the discussion.