StarHub CEO reiterates plans for more enterprise M&A at AGM

STARHUB expects to see some improvements in its mobile business, especially as 5G products and services come on stream. In the meantime, the mainboard-listed telco is doubling down on its ongoing transformation strategy and eyeing inorganic enterprise business expansion.

"Of course, we plan to grow through 5G across consumer and enterprise," StarHub's chief executive Nikhil Eapen said at his first annual general meeting since joining from parent company ST Telemedia on Jan 1.

During the live webcast, he said 5G technology is "key for us" and "the first pillar of delivering market-leading experiences".

Sidestepping a question about whether StarHub could opt for consolidation, he suggested that mergers and acquisitions (M&A) might be used to support the enterprise business instead.

"We intend to support the growth of Ensign and Strateq and, in addition, pursue further M&A to build our enterprise business and capabilities and continue regionalisation," said Mr Eapen. Ensign is a cybersecurity joint venture with national investor Temasek. Strateq is a Malaysian information and communications technology services provider that StarHub picked up last year.

Citing consolidation in the global telco industry, such as the recent merger proposal between Malaysian telcos Celcom and Digi, shareholders had asked if there is "any plan to do the same, considering the over-saturated/crowded market condition" in Singapore.

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StarHub had replied in a bourse filing that such actions need regulatory approval, but "we want to ensure that we are in a favourable position to capitalise on emerging opportunities".

That's in line with Mr Eapen's message in StarHub's latest annual report out last month, where he told shareholders: "We do not intend to change our strategy significantly - our transformation strategy is the right strategy and our team has delivered on our transformation targets."

He also noted in the report that StarHub would like to acquire more businesses like Strateq, which he said would "establish growth beachheads for our enterprise aspirations".

Before serving as head of the infrastructure technology group and in other roles at ST Telemedia, Mr Eapen was an investment banker at Citigroup where, among other duties, he oversaw M&A deals across the Asia-Pacific and United States.

Recent years' price competition in the mobile market "is not sustainable in the long term", StarHub said in its bourse filing, even as it told shareholders that it is trying to balance keeping customers and "protecting business profitability".

Shareholders had asked about the prospects for the mobile business with one investor saying: "I am concerned about the loss of StarHub's mobile subscribers and market share".

M1 last year pushed past StarHub to rank second in terms of Singapore postpaid subscriber numbers, behind Singtel.

Touting a fivefold annual growth in subscribers, however, Mr Eapen called StarHub's sub-brand Giga a "digital fighter brand" in the fierce mobile consumer market.

"Our focus is to sell the fastest and best 5G connectivity, but we also want to drive the customer 5G experience," he said at the meeting, adding that "comprehensive 5G plans integrated with entertainment and gaming" carry a higher premium and "have grown well" since launch last year, with plans to add more content.

StarHub closed at S$1.35 on Friday, down by S$0.01 or 0.7 per cent, after the annual general meeting and an extraordinary vote to renew the company's share purchase and interested-person transaction mandates.