StarHub, Singtel Earnings Squeezed; Analysts Push Singapore Telco Consolidation
StarHub and Singtel Singapore reported weaker earnings, with mobile service revenues declining amid aggressive price competition. Analysts suggest industry consolidation is crucial for a sustained recovery.
Telco Earnings Under Pressure
StarHub's first-half earnings before interest, tax, depreciation and amortisation (EBITDA), excluding its Ensign cybersecurity joint venture, fell 23.8 per cent for the period ending June 30. Its underlying net profit, also excluding Ensign, plunged 76.1 per cent. Singtel Singapore's first-quarter EBITDA decreased 4.6 per cent for the same period.
Both telcos saw mobile service revenue drops: StarHub's fell 10.5 per cent in the first half, while Singtel Singapore's dipped 4 per cent in its first quarter. This decline extends prior periods, with StarHub's FY 2025 EBITDA down 12.3 per cent and Singtel Singapore's FY 2026 EBITDA falling 6.8 per cent.
Price War Drives Revenue Decline
Aggressive consumer market pricing drives these revenue pressures, noted Maybank Research analyst Hussaini Saifee. Mobile plans as low as S$10 to S$12 and broadband packages at S$30 monthly show operators prioritising subscriber acquisition over profitability.
Bloomberg Intelligence analyst Chris Muckensturm states that "meaningful industry rationalisation" is necessary for incumbents to improve mobile service revenue. Without it, sustained recovery appears limited. Phillip Securities Research head Paul Chew added that operating four mobile operators in Singapore would only deliver weak industry returns.
Consolidation Seen as Key
Analysts believe consolidation must involve mobile network operators (MNOs), not just mobile virtual network operators (MVNOs). RHB equity research suggests a StarHub-M1 consolidation could reverse the industry's average revenue per user (ARPU) decline. StarHub's blended ARPU fell to S$20 from S$21, while Singtel Singapore's mobile ARPU dropped to S$22 from S$23.
A 2025 Maybank Research report found Singapore's mobile ARPU 15 to 40 per cent below developed Asia-Pacific peers. The proposed S$1.43 billion Simba-M1 merger fell through in May.
Strategic Positioning and Hurdles
StarHub's migration of MyRepublic mobile subscribers to its network strengthens its multi-brand strategy and potential merger position, according to RHB. This move could also improve StarHub's negotiating stance if M1's earnings are subsequently lower, said Bloomberg Intelligence. It further simplifies network rationalisation for the StarHub-M1 Antina 5G joint venture.
However, Phillip Securities Research's Paul Chew cautions against overstating the migration's merger implications. While consolidation could fix pricing and lift revenue, analysts highlight financial and regulatory hurdles. StarHub holds S$516 million cash and could monetise its remaining 39 per cent Ensign stake.
For Singapore's telco sector, continued earnings pressure suggests consolidation remains a critical path for restoring profitability.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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