StarHub Ltd’s CEO on The Company’s Plans To Grow

I had visited Invest Fair 2016 over the weekend. The event had a segment that featured Tan Tong Hai, the chief executive of Singapore’s second largest telecommunications company, StarHub Ltd (SGX: CC3).

Tan was interviewed on stage and during the interview, he was asked about StarHub’s stagnant revenue. Tan responded with a description of his company’s Defend-and-Attack strategy.

According to Tan, StarHub is defending its existing core business by providing reliable telecommunications services and adapting to changing consumer behaviour. To attack, the company is doing a few other things.

Tan admitted that there is a limit to StarHub’s growth strategy as far as the traditional consumer-facing telecommunications business is concerned. While StarHub foresees higher growth in mobile data consumption, the likelihood of greater competition in the future casts some grey clouds there. Here are some of the other growth-initiatives Tan mentioned that StarHub is pursuing:

1. Riding on the digitisation trend and focusing on enterprise customers

Digitisation is a growing trend. Entire industries such as logistics and retail are developing a digital presence. Enterprises are thus growing their usage of data services. This is an area StarHub is focusing on; enterprise customers could even provide the telco with strong profit margins.

2. Forming strategic overseas partnerships

StarHub is also partnering with foreign telcos such as Vodafone in Europe and China Mobile in China. By doing so, when foreign businesses want to enter the Singapore market, StarHub could get referred and thus stand a higher chance of securing service contracts from these businesses.

3. Localising popular overseas content

StarHub does not produce television content, but it can encourage overseas producers to bring their popular content to Singapore and localize it to better suit Singaporean tastes. As an example, Starhub had recently invited a popular Taiwanese host to bring her talk show to Singapore. Tan thinks such efforts will help make StarHub’s Pay TV service more attractive.

4. Expansion into Cyber Security and the Internet of Things

As the business world is increasingly digitised, cyber security services would be essential. StarHub has entered into the space to provide such solutions to businesses. At the same time, the company is also keeping a lookout on the Internet of Things trend which is likely to be the next source of heavy data consumption.

What Tan has shared does sound interesting. But it remains to be seen if the company can successfully execute these initiatives.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Ong Kai Kiat doesn't own shares in any companies mentioned.