StarHub plans to maintain an aggressive posture so as to defend its position through a multi-brand strategy encompassing StarHub, Giga, and 8, says Saifee.
Citing the management, Saifee states in his Oct 16 note that StarHub sees an opportunity to capture subscriber market share as M1–Simba focuses on consolidation and network integration, while MVNOs are expected to retreat amid increased competition from incumbents targeting the low-end segment.
StarHub believes that Simba’s current lean cost structure may not be sustainable, as its designation as a so-called critical information infrastructure operator will require increased investment in cybersecurity and a potential shift to European network vendors.
In addition, Simba’s high leverage is likely to exert pressure on earnings. Given these dynamics and supported by global precedents, StarHub expects industry competition to rationalise over the next 12–18 months.
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On the other hand, StarHub is enjoying strong growth in its enterprise business, led by double-digit expansion in managed services and 30–40% growth at Ensign.
Saifee, citing the management, says that smart city initiatives—such as the Punggol Digital District—as proof-of-concept projects, with plans to scale these capabilities across Asean markets.
In a bid to drive further growth, the company is pursuing both organic and inorganic growth in regional ICT markets, targeting Vietnam, Indonesia, and the Philippines.
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With $500 million in cash and a net leverage ratio of 1.9x, StarHub is looking at potential deal sizes in the $100 –300 million range.
StarHub's 56%-owned subsidiary, Ensign, has become one of Singapore’s largest cybersecurity firms with revenue of nearly $400 million.
"Following this milestone, the strategic focus will shift toward margin expansion and profitability under new Ensign leadership," says Saifee.
In another positive aspect, StarHub's multi-year programme to deploy a more efficient internal process system, otherwise known as Dare+, has completed its investment phase, and the company is now starting to unlocked savings through a comprehensive cost-optimisation programme where decommissing legacy systems alone will help save $10 million a year, part of a broader efficiency move that can scale savings by 3-4x that.
