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At StarHub, everything we do is driven by a strong resolve to deliver superior value and unsurpassed satisfaction to customers.
In FY2020, we made commendable strides with our transformation for a new generation seeking quality communication, unsurpassed entertainment and next-level digital solutions. Our innovation and digital strategies continue to pave the way for new cost-effective and efficient ways of working in a digital world.
Leading with our foresight on new technologies and emerging trends, we marked our place in history as the first telco to offer 5G Non-Standalone (“NSA”) services across Singapore in August 2020. With the introduction of 5G, we have sparked the technology revolution of our era, ushering in unprecedented speed and improved efficiency to support the creation of new user experiences.
We made further inroads for our Pay TV transformation with the launch of StarHub TV+. Through this first-to-market integrated entertainment solution, our customers are empowered with flexibility of choice over streaming services, apps, TV programmes and popular OTT options on a single hybrid platform.
Our focus on innovation and transformation continues to elevate StarHub’s customer experience, an important attribute vital to the competitiveness of our businesses. Reinforced by a necessity brought about by COVID-19, we continued to enhance the customer journey and experience on our digital touchpoints. During the year, we saw over 12% growth in monthly active users on the My StarHub App, and a 32% increase in digital sales transactions. We also achieved over 80% accuracy as we continued to mature our chatbot as an online touchpoint to automate customer support. Through the simplification of the consumer digital sales journey, we achieved up to 60% improvement in sales conversion rate.
Our endeavour to raise customer satisfaction at every touchpoint has positioned us as the provider of choice for quality and customer service. Having charted a significant improvement in FY2019, we continued to achieve 24.5% year-on-year incremental improvement in NPS in FY2020. In the most recent Customer Satisfaction Index of Singapore (CSISG) study, satisfaction scores for StarHub’s Mobile and TV services rose in 2020 and are at the highest levels of any operator to-date. With this accolade, we have clinched top spot in Mobile as well as led in TV for seven consecutive years.
Revenue ($’m)
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MOBILE
Our Mobile business continues to be the largest revenue contributor. Although the market is becoming increasingly competitive, our position remains resilient, supported by more than 1.4 million mobile subscribers who have chosen to stay with us for a differentiated customer experience and quality offering.
With the onset of the COVID-19 pandemic in early FY2020, international business travel and tourism dissipated overnight as Singapore closed its borders. Postpaid ARPU declined from $40 in FY2019 to $31 in FY2020 due to lower roaming revenue, VAS and excess data usage while Prepaid revenue was impacted by a decrease in subscriber base due to overall drop in tourist arrivals and declines in ARPU from $13 to $11 year-on-year. As a result, FY2020 mobile revenues declined from $765.5 million in FY2019 to $579.7 million in FY2020.
Our Mobile business roadmap is built on three primary strategies: Capture emerging 5G opportunities; Drive digital innovation; and Optimise network experience for customers. Effective delivery of these key strategies will allow us to prudently manage ARPUs and improve the performance of our mobile business in an increasingly competitive market.
5G: A New Realm of Opportunity
At the launch of our 5G services in September 2020, we were touted to have the widest nationwide NSA network coverage of over 70%. We are pleased to share that the take-up rate for Mobile+ has exceeded internal expectations, accelerated by the launch of popular 5G smartphones in 2H2020 and the value-add brought to consumers via our differentiated 5G plans.
To differentiate our Mobile+ integrated plan and provide customers with an early teaser of the potential of the new technology, we tapped on our ability to provide customers with cross-product bundling, offering Mobile+ customers access to StarHub TV+ and Antstream Arcade to enable customers to experience supercharged entertainment with zero lag on StarHub’s first-to-market 5G service. We will continue to seek more innovative partnerships with entertainment and gaming providers to differentiate our 5G offerings.
Moving forward, we are focused on the roll out of our ultra-fast, ultra-responsive 5G standalone service that is expected to launch in FY2021, delivering unprecedented speed, simplicity and instantaneity to consumers across Singapore.
We expect consumer adoption of this new technology to grow in tandem with the maturity of the 5G ecosystem, driven by the release of 5G handsets and creation of unique 5G digital solutions that will significantly enhance the way we work, play, browse, game, watch and create on this new frequency.
We have seen encouraging interest as StarHub continues to play a vital role in educating the industry and community about the potential of 5G technology. During the year, we entered into an exclusive 2-year partnership with NTUC, whose members comprise 30% of Singapore’s workforce, to provide 5G services and conduct webinars and seminars to educate and equip union members on the new technology. StarHub’s Union specials have been well-received among members since the start of the partnership in 2017, and we count close to 70,000 NTUC union members as our customers.
Creating Value Through Digital Innovation
Launched in FY2019, our giga! mobile digital brand delivers a simple and seamless end-to-end digital experience for customers. We designed the product from a customer experience perspective in the first instance, and the technology development ensued. This customer-driven approach has provided us with greater agility to respond quickly and maintain a deep engagement with customers.
giga! continues to appeal to the digital community with first-in-market innovations such as fuss-free e-KYC process and data rollover. Furthermore, we leveraged data analytics to strike a balance between value and price, allowing us to compete effectively in a crowded and fragmented SIM-only market. For these reasons, our giga! subscriber base has grown five times over the past year, with a majority from port-in subscribers.
To increase app engagement and user retention, giga! had 40 app enhancements during the year. We are encouraged that our drive to continuously improve giga! was recognised by the community with remarkable app ratings achieved on Google Play, App Store, and Seedly. giga! continues hold the highest NPS rating in the market.
Our focus on digital innovation continues to guide our engagements with customers. During the year, we thanked 12 of our most loyal customers for their longstanding support, with an unprecedented Augmented Reality ‘meet-and-greet’ delivery of the iPhone 12 that was powered by 5G technology. Being amongst the first in the world to receive the iPhone 12, these customers were greeted with a warm StarHub “Hello!” by 3D on-screen avatars of StarHub’s Chief of Enterprise Business Group and Vice President of Mobile Marketing.
This one-of-a-kind experience was the first in Singapore’s telecommunications industry, and exemplifies our ability to demonstrate the potential of our advanced technologies and introduce new-to-market product and services to enrich customers’ digital lifestyle.
In January 2020, we became the first info-communications company in Singapore to offer Amazon Prime membership to our entire mobile customer base. The membership allows users to enjoy shopping and delivery, entertainment and gaming, enhancing customer experience. To enjoy the perks of membership, customers are required to activate their My StarHub App, a key digital touchpoint that we continue to invest in and use to engage customers.
Bringing digital innovation, convenience and greater value to StarHub customers, we partnered Pay2Home, a Singapore fintech and licensed major payment institution to enable our mobile prepaid customers to remit funds to over 40 countries using the StarHub Prepaid app.
Optimising Network Experience
During the year, we continued to invest in and optimise our award-winning network, a vital communication infrastructure, which drives mobile customer experience.
In a November 2020 market report1, StarHub was named market leader in providing Video, Voice, Gaming, 4G Coverage and Upload speed experience. We were also named winner of the Download Speed Experience award having achieved average overall download speed which was 8.6% or 4.5 Mbps above our previous high, providing us with an impressive margin of 7 Mbps over our nearest competitor.
Our high-performance network was again recognised when we were named Singapore’s fastest Telco in IMDA’s IMConnected report2. We clocked the fastest mobile data speed with 23.4 Mbps median throughput compared with 22.8 Mbps for our nearest competitor and provided nationwide outdoor service coverage in excess of 99.78% in 1H2020.
Looking into FY2020, we will continue to create value for our customers through innovation and digital transformation. With our 5G first-mover advantage, we are poised to benefit from the expected accelerated adoption of 5G in Singapore’s Smart Nation ambition.
PAY TV
Our Pay TV Transformation continues with a strategic focus on improving margins through transformations in two core areas.
In the first phase, StarHub’s cable-to-fibre migration in FY2019 has provided a catalyst for our cost transformation. We have transitioned from a fixed-fee cable model to a variable-fee fibre model, providing greater flexibility with most of our content providers on a per-connection variable cost structure.
FY2020 had focused on the second phase of our Pay TV Transformation – enhancing content delivery and the customer experience.
StarHub TV+: Value in Flexibility and Selection
In September 2020, we took a big step forward in our transformation with the launch of StarHub TV+. A unique and first-to-market entertainment option, StarHub TV+ affords customers greater flexibility with an all-in-one simplified offer of quality streaming services, TV programmes and popular OTT options integrated on a single platform.
We consolidated our pricing and plans across Fibre TV and streaming platforms to unlock flexibility and provide a unified viewing experience for customers. In addition, we simplified the set-up process for customers by introducing plug-and-play Android set-top boxes. These enhancements have seen an improvement in customer satisfaction and allowed us to further our cost transformation objectives by reducing installation costs and realising economies of scale.
StarHub TV+ is a testament to our ability to reimagine entertainment via a refreshed and more intuitive interface. One which has allowed us to deliver greater simplicity, accessibility, rich content and an improved user experience.
Immersive Content for an Unsurpassed Entertainment Experience
We recognise that new immersive content and experiences is vital to the sustainable growth of our Pay TV business. Consequently, we signed-on eight popular OTT platforms in FY2020 and integrated their content on our hybrid platform, providing customers with a unified experience across big and small screens.
We curated and partnered with top OTT players to deliver quality content, including the highly anticipated Disney+ when we signed an exclusive agreement with The Walt Disney Company in January 2021. Our customers are among the first in the world to enjoy all six Disney content brands through their TVs or on the go over StarHub 5G ultra-fast networks.
Amongst our portfolio of OTT content providers, we also teamed up with Netflix in March 2020, the world’s leading streaming entertainment provider, to deliver the best of entertainment and superb connectivity to our customers. To ensure the diversity of our offerings, we also have on our platform China-based iQIYI, which owns one of the largest Chinese content libraries in the world; as well as Hotstar, India’s leading video streaming app, bolstering the variety of programmes available on our platform.
Concurrently, we have broadened our channel options to customers, launching Singapore’s first 24/7 dedicated Tennis channel, beIN SPORTS 2, which will feature over 900 live matches from the ATP1000, ATP500, ATP250 and Next Gen Finals tournaments throughout the year. StarHub also signed a multi-year deal to broadcast 306 Bundesliga football matches per season, of which over 200 live matches will be available on StarHub’s platform.
To cater to the needs of Singapore’s multi-cultural society, we were the first in Singapore to launch three brand new quality Indonesian channels - Citra Entertainment, Karisma and Pawagam Indonesia. We also strengthened our Tamil programming with the addition of channels such as ADITHYA TV and KTV HD to afford our Tamil viewers unsurpassed entertainment across 10 Tamil channels.
Lighter Operating Model; Robust Digital Product
We had sought to stabilise the segment’s performance in FY2020 following the considerable churn and impact brought about by the cable-to-fibre migration in FY2019. We are pleased to report that the subscriber base has remained relatively stable since the completion of the cable-to-fibre migration in September 2019, declining at a rate of 0.6% on average per month.
The segment was not spared from COVID-19 impact in FY2020, recording lower commercial revenue and advertising due to prudent cost management by commercial clients. Overall, Pay TV revenue declined from $248.0 million in FY2019 to $187.9 million in FY2020 while ARPU declined to $39 in FY2020 from $44 in FY2019.
Looking ahead, we are encouraged by early signs of stabilisation in several Pay TV indicators in the last quarter of FY2020. ARPU was $40 in 4Q2020, unchanged from 3Q2020; and 4Q2020 segment revenue was $47.1 million, also unchanged from the preceding quarter.
The segment’s performance had been impacted by the necessary changes to its operating model and the ongoing headwinds in the competitive landscape. Moving forward, we believe that our efforts will provide the segment with a stronger footing to compete in an increasingly competitive landscape, and a more robust digital product that will position us well to engage an increasingly discerning consumer market.
BROADBAND
Our Broadband business remained stable in FY2020 with ARPU at $29, unchanged from FY2019 due to reduced subscription incentives extended to customers. Accordingly, Broadband revenue remained relatively stable at $176.1 million in FY2020 compared to $176.4 million in FY2019.
In a similar vein to our Pay TV business, our Broadband business saw early signs of stability in late FY2020. 4Q2020 revenue increased to $45.7 million from $45.5 million in 3Q2020, with ARPU unchanged at $30 over the period.
Our Turbo Gamer 2Gbps plan continues to gain traction in the gaming market, offering two dedicated 1GB fibre connections and a state-of-the-art ROG Rapture GT-AC2900 gaming router. The gaming experience is further enhanced with lower-latency and smoother gameplay with Garena’s games.
Customers are increasingly discerning when it comes to the home broadband experience – this is even more pronounced with the shift in consumer behaviour driven by the global pandemic. During the year, we introduced the StarHub Smart WiFi, a new mesh WiFi networking system to provide an unrivalled WiFi coverage and reliability for customers to enjoy the best video streaming and broadband experience in any corner of their home.
We strive to leverage our superior network as well as the latest technologies and connectivity solutions to enhance the home broadband experience for our customers, which will in turn drive growth for the segment. Concurrently, we seek to deepen our penetration in higher-value niche segments such as gaming, where the performance differentiation of our quality network provides us with a fertile platform to establish a niche with gamers.
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