StarHub chief quashes talk of merger with M1

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Mainboard-listed ’s executive Peter Kaliaropoulos rebuffed speculation of a possible between the telco and its 5G bid partner M1 at its virtual annual general meeting (AGM) yesterday.

He also said StarHub is working to grow its cyber security arm’s top and bottom lines, after Ensign InfoSecurity turned in its first quarterly profit in the first quarter of this year. StarHub held its AGM with investors over live webcast, with shareholders required to submit questions and votes in advance.

Reading from prepared remarks, Mr Kaliaropoulos said that “we take a serious view on improving Ensign’s profitability”.

Queries on the performance and prospects of StarHub’s cyber security business, which delivered year-on-year revenue growth of 79 per cent last year, were among the “substantial and relevant questions” picked for Mr Kaliaropoulos to address.

The cyber security business clocked a full-year turnover of $145.7 million last year, but also chalked up losses of $21.8 million.

Ensign, a pure-play joint venture with Temasek set up in late 2018, spent its first full year in the red on the back of operating expenses from “significant investments in (research and development) and human capital”, according to StarHub.

This year’s profitability could also take a hit because of the Covid-19 outbreak, which StarHub noted has led to cautious corporate spending, as well as project and tender delays.

But Mr Kaliaropoulos said: “We maintain a long-term view on business strategies and will continue to strike a balance between accelerating growth and enhancing profitability.”

Manufacturing and healthcare clients offer short-to medium-term cyber security growth opportunities, as Ensign looks to grow in the Asia-Pacific, he added.

The addition of cyber security services to the group portfolio “has resulted in tremendous capability for our company, in terms of growth and market share”, said Mr Kaliaropoulos.

He estimated that Ensign now holds a 16 per cent share in its home market of Singapore.

“With strong foundations in place, it plans to aggressively grow its top line and benefit from scale so as to optimise margins,” he added.

As for StarHub’s role in the upcoming 5G wireless market, Mr Kaliaropoulos reiterated that it is too early to share plans and forecasts before a full licence is awarded later this year.


Mergers depend on market conditions, are subject to regulatory approvals, and (are) driven by value creation requirements for stakeholders. Beyond the 5G strategic collaboration, no intent or discussion of any kind is under way at this stage that may lead to a merger.


But he quashed the notion that StarHub is angling for a merger with Keppel-owned M1. While the two telcos are set to share the costs in a joint roll-out of 5G network infrastructure, Mr Kaliaropoulos stressed that the partners “will launch their own offerings and solutions for customers with separate go-to-market strategies”.

“Mergers depend on market conditions, are subject to regulatory approvals, and (are) driven by value-creation requirements for stakeholders,” he added. “Beyond the 5G strategic collaboration, no intent or discussion of any kind is under way at this stage that may lead to a merger.”

Mr Kaliaropoulos, who kicked off a strategic business transformation with layoffs when he took the helm in mid-2018, also gave an update on the “Hello Change” consumer drive.

“We are accelerating our digital efforts,” he remarked, while noting that some 690,000 post-paid mobile customers are on the simplified plans.

More than 260,000 cable subscribers were also migrated successfully to fibre, which is expected to shake up the pay-television business.

Mr Kaliaropoulos, who has pushed for pay-TV media content providers to charge StarHub on a variable rather than fixed-cost model, added that “most” providers are now doing so.

The management also reassured shareholders that StarHub’s dividend policy remained in place, recently yanked guidance notwithstanding. Just one quarter into the year, the company withdrew its financial guidance.

Mr Kaliaropoulos said the outbreak made accurate forecasting nearly impossible for the short term. This included a payout pledge of nine cents a share, which was trimmed last year from 16 cents before. Still, StarHub said it is committed to returning 80 per cent of underlying net profit to shareholders.

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