How StarHub can survive from its weakening mobile segment

Is it ready to up its game in its ICT services?

StarHub's recent launch of unlimited data plans could be the result of tougher competition in the mobile segment market.

According to OCBC Investment Research, this is likely due to the impending 4th telco entry as well as MyRepublic’s intention to launch mobile services with generous data offerings such as mobile virtual network operator (MVNO) as early as next month.

OCBC said that StarHub still has substantial exposure to Singapore’s mobile market, with around 55% of its service revenue derived from mobile business.

"We believe the recent launch of unlimited data plans by Starhub and M1 is the result of the intensifying competition in Singapore’s saturated market," OCBC research team said.

Consequently, StarHub held a sell-side day as it seeks to enhance its enterprise business through bundling of services to keep customers and revenue coming.

There are several specific verticals that Starhub focuses on that include but not limited to smart nation initiatives, healthcare, financial services, transport, and small and medium-sized enterprises (SMEs).

OCBC said StarHub is ready to offer various ICT services that include cloud and data centres, cybersecurity, data analytics, connectivity, advertising solutions among others.

OCBC said, "In our view, we like that StarHub is investing to reduce its significant exposure to Singapore mobile segment. That said, while we believe this will help offset the weakness from the under pressure mobile segment, we expect the ramp up in its enterprise business will need time to bear fruits."

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