StarHub working on network sharing after job cuts

StarHub's enterprise, or corporate services, business has been growing by about 20 per cent a year and will probably make up more than half of total revenue within two years, said chief executive officer Peter Kaliaropoulos.
StarHub's enterprise, or corporate services, business has been growing by about 20 per cent a year and will probably make up more than half of total revenue within two years, said chief executive officer Peter Kaliaropoulos.ST PHOTO: DESMOND WEE

StarHub is looking to pare costs even further by sharing infrastructure, chief executive officer Peter Kaliaropoulos said after announcing that the firm's workforce would be trimmed by about 12 per cent.

Singapore's No. 2 telco may reach a commercial agreement on network sharing next year or earlier, Mr Kaliaropoulos, who took up the CEO post in July, said in an interview last Thursday.

Financial benefits could be seen by the end of next year, he added.

"We're talking to a lot of people," Mr Kaliaropoulos said. "When an industry hits maturity, you need to start sharing facilities."

The company and its smaller competitor M1 said in January last year that they would study further collaboration in mobile infrastructure sharing that could lead to lower spending.

Mr Kaliaropoulos announced 300 job cuts earlier this month as part of a broader plan to save $210 million over three years from 2019.

Once an upstart entrant itself, StarHub is seeing mobile subscriber numbers dwindle amid price competition ahead of the entry of a fourth player, TPG Telecom.

AIMING TO BE CLEAR NO. 2

The next couple of years is to focus predominantly in Singapore, and be a very strong, clear challenger, a clear No. 2, and once we weather the storm... look at other opportunities.

STARHUB CEO PETER KALIAROPOULOS, saying StarHub could begin to seek growth only after "stabilising" as the No. 2 provider.

At the same time, StarHub's model of offering users access to films, television and broadband services is being challenged by streaming powerhouses such as Netflix.

StarHub needs to be "a bit more lean, a bit more agile" and channel more resources to growth areas such as its enterprise business, said Mr Kaliaropoulos.

The company's enterprise, or corporate services, business has been growing by about 20 per cent a year and will probably make up more than half of total revenue within two years, compared with 40 per cent now, he said.

Along with cutting costs and arresting the slide in subscribers, Mr Kaliaropoulos must also win back support from investors, who have pushed the shares down 52 per cent since July 2015, knocking $3.6 billion off the firm's market value.

With more mobile phones than people, Singapore's telecommunications market is just 0.4 per cent the size of China's, which has only three carriers. Regulators in Singapore have sought to introduce more competition to bring down phone bills and improve services.

Four mobile carriers may be too many for Singapore, said Mr Kaliaropoulos, who said it may be difficult for the smallest to survive.

Mr Kaliaropoulos, who built a reputation as a turnaround executive - by leading mobile operator Zain Saudi Arabia to its first quarterly profit since the company was founded in 2008 - said StarHub could begin to look for growth only after "stabilising" its position in Singapore as the No. 2 provider.

"The next couple of years is to focus predominantly in Singapore, and be a very strong, clear challenger, a clear No. 2, and once we weather the storm... look at other opportunities," he said.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on October 16, 2018, with the headline 'StarHub working on network sharing after job cuts'. Print Edition | Subscribe