Starhub

[lonewolf]

The last time when they had EXCLUSIVE rights, the charges was around $60-$70, but this time, they targeted on NON-EXCLUSIVE right with charges of $25-$35.

With SingTel currently charges of S$34.90 for its sports package, which includes EPL matches, Starhub is prudent this time

Good for Starhub investors, and its customers too

That can't be right?? Were you perhaps thinking of the World Cup package?? I dun rem paying so much the last time for my sports package which also includes ESPN and Star Sports.

I won't pay $60 or even $40 for the Sports package; probably no more than $30 for BPL+Star+ESPN so I think Starhub may be in the sweet spot in term of pricing but like I say time is not on their side.

[KopiKat]

As an SH investor and consumer, I would be disappointed if SH does not do so.

People are fed up with MioTV and everyone was looking forward to this cross-carriage rule to be implemented from next yr BPL. Then suddenly we heard that Singtel has signed a non-exclusive rights to broadcast BPL matches. If SH also offered BPL matched, I'm sure a lot of people will jump back to SCV.

However the problem is with timing. We read that commercial rights holders are not playing ball and has locked out Starhub for negotiations. So how is that fair?? Where were all the associations that cried foul when MDA implemented the cross carriage rule?? They have suddenly remain silent to this unusual situation.

If Starhub continued to be locked out until say June next year, Singtel would have the advantage as it would probably have signed up most BPL diehards by then leaving Starhub to pick up the crumbs. Personally I would wait to see what happen to ESPN and Starsports. Hopefully they will move back to SCV too.

The last time when they had EXCLUSIVE rights, they were losing $$$, even when Cable TV (includes non-EPL subscribers) was lumped together with their Broadband in their Segmental reporting, IIRC. Will it be different this time round if they do negotiate for the rights? Perhaps at a much lower price for the rights in combo with a higher subscription price (for subscribers)?

The last time when they had EXCLUSIVE rights, the charges was around $60-$70, but this time, they targeted on NON-EXCLUSIVE right with charges of $25-$35.

With SingTel currently charges of S$34.90 for its sports package, which includes EPL matches, Starhub is prudent this time

Good for Starhub investors, and its customers too

Hmm... you seem very optimistic that StarHub will make $$ if they do get the rights for EPL. I have not spent time (too lazy) to work out the numbers to see at what EPL Rights Price they'll make $$ but my gut feel is they're going to lose $$.... To get a feel of what I'm saying, I quote some of my old posts (3 years ago) when I was analysing on why it's actually good (more profitable) for Starhub not to pay for the EPL rights,

Posted: Thu Oct 01, 2009 12:55 pm
Revenue is important, but Profits is even more important. If you look at AR2008 (pg 130), there's a loss for 'Cable TV and Broadband' segment. I'm assuming 'Broadband' segment would have been profitable and therefore, the losses due to 'Cable TV' segment must have been quite substantial. That means, their EPL bid last time must have been too aggressive.

http://info.sgx.com/listprosp.nsf/07aed3...3002b84ad/$FILE/StarHubAnnualReport2008.pdf

Further, under 'Cable TV', 'Sports Channel' is only part of it. There ought to be many subscribers who only watches movies, cartoons (ask your friends and family members who have young kids), serials (housewives, old folks),...

My conclusion (a biased one as I'm vested) is that losing the EPL rights will be good in terms of short term profitability (fm 2010). Also, from 2010, unless Singtel objects, I don't see why Starhub can't revert back (what they did prior to 2007) to carrying ESPN-Star Sports channel (which'll likely have EPL, Euro league,...).

Note that in the short term, prices will be volatile (good for traders) and prices may drop even further if market is very negative on Starhub's longer term prospect due to the loss of this rights.

Posted: Thu Oct 01, 2009 4:45 pm
The only margin figures I can find (sorry, I didn't spend a lot of time looking) are the ones from their Q209 presentations (pg10),

http://info.sgx.com/webcoranncatth.nsf/V...90030F52B/$file/PS2Q2009.pdf

For 'Cable', EBITDA Margin = 21.5% of Service Revenue.
'Cable' here comprises of 'Pay TV' and 'Cable Broadband'. Fm pg 6, these comprises 19% (Pay TV) + 11% (Cable Broadband) = 30% or 30% of $513M = $153.9M.

So 'Cable' EBITDA = 21.5% of $153.9M = $33.09M

EBITDA means Earnings Before Interest, Tax, Depreciation, Amortisation

From your post, it appears that the EPL rights is being recognised as an Amortisation Expense, which at $250M (?) over 3 years, means $20.83M/quarter.

So, deducting this from 'Cable' EBITDA, we get $12.26M. Here, we have not even factored in Interest, Tax and Depreciation, all of which can be quite substantial. I won't be surprised if it results in a loss or at most, a very tiny profit.

From the Q209 financials, Tax = $16.8M, D+A = $60.7M, Interest = 6.1-0.2=$5.9M. I don't know how they allocate to the different segments, but it gives an idea of how much you need to deduct from their "profits".

http://info.sgx.com/webcoranncatth.nsf/V...9002D57B5/$file/2Q2009.pdf

Posted: Fri Oct 02, 2009 4:18 pm
Losing EPL rights spells the end of the world for Starhub? Will there be a mass exodus led by hardcore EPL fans who also happen to be multi-hubbers? Let’s look at some figures from Q209 results,
• Mobile : 1,849,000 subscribers
• Pay TV : 530,000 subscribers
• Cable Broadband : 389,000 subscribers
Some questions that comes to mind are,
1) How many EPL subscribers are there? Some in this forum say 225,000, others say 250,000 (but both are not substantiated by any data).
2) Of the EPL subscribers, how many are hubbers? All? Even the Coffee Shops, Pubs, McDonalds,..etc.?
3) How many of the EPL subscribers will switch to Singtel in 2010? All?
4) Will the $250Mil (over 3 years) of savings from losing the EPL rights be able to offset the loss of EPL hubbers’ business?
Some useful figures from FY08 AR,
• Segment Results : Operating Profit = $409,257,000 (Telecoms : $441,947,000 ; Cable TV and Broadband = -$2,977,000)
• Net Profit = $311,319,000 (EPS 18.28ct)
Use the above profit figures and put in some figures to (1) to (3) and you can estimate the worst case scenario due to business lost, come 2010. That should help you answer (4) and make your own decision, I think. Have fun!

One difference is latest Pay TV subscriber base = 541,000 (see pg 25 of latest results presentations) vs 530,000 previously.

[CityFarmer]

The last time when they had EXCLUSIVE rights, the charges was around $60-$70, but this time, they targeted on NON-EXCLUSIVE right with charges of $25-$35.

With SingTel currently charges of S$34.90 for its sports package, which includes EPL matches, Starhub is prudent this time

Good for Starhub investors, and its customers too

That can't be right?? Were you perhaps thinking of the World Cup package?? I dun rem paying so much the last time for my sports package which also includes ESPN and Star Sports.

I won't pay $60 or even $40 for the Sports package; probably no more than $30 for BPL+Star+ESPN so I think Starhub may be in the sweet spot in term of pricing but like I say time is not on their side.

I refer to Starhub's Chief Executive Mr. Neil Montefiores statement below

"When we took the Euro Cup on an exclusive basis, we priced it around S$60-S$70 depending on when you bought it. Generally, the feedback was that was too much, so I think we'd have to price significantly below that on a monthly basis. So somewhere between S$25 and S$35 I would think would be the pricing we'd want to offer customers," - Todayonline

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Hmm... you seem very optimistic that StarHub will make $$ if they do get the rights for EPL. I have not spent time (too lazy) to work out the numbers to see at what EPL Rights Price they'll make $$ but my gut feel is they're going to lose $$.... To get a feel of what I'm saying, I quote some of my old posts (3 years ago) when I was analysing on why it's actually good (more profitable) for Starhub not to pay for the EPL rights,

One of the reason i had opted M1 over Starhub, was the saturation of all its business segments. Starhub's focus is on maintaining, rather on growing existing business segments

IMO, we should not view EPL P&L as an isolated event. TV business is a critical part of the overall hubbing promotion. Without it, there may have negative impact on other business segments' P&L

[CityFarmer]

I read an article on StarHub in latest The Edge Singapore. The title is "StarHub sees opportunities in big data"

In short, it is an effort to crunch out business information (e.g. crowd location, visitor profile etc) from StarHub's database i.e. the big data

IMO, it is still too early to conclude, but i really doubt the amount of $ can be crunched out from the "big data". Definitely not sufficient to be another comparable revenue stream of StarHub.

[specuvestor]

EPL is marketing cost to Starhub to support their other channels. IDA effectively "disincentivised" this marketing channel as problem is EPL charged based on a formula that includes GDP per capita IIRC. Hence this analysis is more than PnL, it involves estimating subscribers who subscribe cable because of EPL, which I've not seen any data. Suffice to say that on a stand alone basis, EPL is not going to be profitable, just like marketing cost.

Key to starhub IMHO is the ability to retire debt incrementally even when maintaining dividend amount. In short it is a cashflow play as cash flow is tight and contingent on operating cash flow vs capex. Growth is pedestrian but at least smartphone subsidy war is over. Relative value wise I would pick starhub over Singtel at the same yield.

[felixleong]

Starhub results will be out tonight right? I am crossing my fingers, i do hope for them to increase dividends, hopefully to 21-22c

[felixleong]

StarHub Reports 2012 Fourth Quarter and Full Year Results
 FY Operating Revenue Increased 5% to S$2.4 Billion
 FY EBITDA Improved 7% to S$720 Million
 FY NPAT Rose 14% To S$359 Million
 Recommends Final Dividend of 5 cents per share, totaling 20 cents per share for FY2012

happy with their results, sad that dividends maintained but oh well~ still good ^^

[CityFarmer]

Oh no, Starhub loses Mr. Neil Montefiore. It should be a bad news to Starhub, but probably a good news to other telco players in Singapore

COO Tan Tong Hai to replace Neil Montefiore as StarHub CEO

StarHub announced today that Neil Montefiore will retire as its CEO by end February 2013. Succeeding him as CEO is StarHub’s COO, Tan Tong Hai.

Neil, 60, joined StarHub in January 2010 as its second CEO. He also serves as a Director on StarHub’s Board.

http://www.theedgesingapore.com/the-dail...b-ceo.html

[violinist]

Tong Hai, a fast marathoner, should be fit for the job. (no puns intended)

[Gregg]

FCF Comparison:
2012：$416.9mil Vs 2011: $449.6mil - decreased by $32.7mil,

Capex Guidance
2013:capex guidance is 13%，(2012-11%), - 2% difference is about $48mil which should be eaten into FCF again, Just rough estimation, next year FCF/share probably will be at $0.21...Chances for higher dividend payout will be slimmer....