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3 Key Partners to StarHub Ltd and Why Each One Is Important

StarHub Ltd (SGX:CC3) has several partners that help it provide better services to its customers.

This is outlined in StarHub’s latest annual report (for 2016) in the management’s discussion section. In the section, members of StarHub’s senior management team were asked the most pressing questions about the telco’s business.

The entire section, which is a commendable effort and one worth reading through, contained discussions from StarHub’s management on the company’s partnerships with Singapore Press Holdings Limited (SGX: T39)M1 Ltd (SGX: B2F), and mm2 Asia Ltd (SGX: 1B0).

Better together

StarHub’s chief strategic partnership officer, Jeannie Ong, talked about the company’s memorandum of understanding (MOU) with SPH:

“In March [2016], we signed an Memorandum of Understanding (MOU) with local media giant SPH. We each have our own unique reach and content. However, we see much more benefits for our respective customers and partners if we come together. Under terms of the MOU, we will be working jointly on content creation, distribution, marketing, data analytics and advertising sales.”

SPH is the garden city’s dominant newspaper vendor and a major provider of advertising services. Under the MOU, StarHub may benefit from an improvement in its advertising offerings.

Lower costs together

In January this year, StarHub signed an MOU with rival telco M1. StarHub’s chief technology officer, Mock Pak Lum, shared details about the new partnership:

“With the MOU, both companies will start studying potential further collaboration in sharing Radio Access Networks (RAN) and backhaul infrastructure. We will still manage our own core network and brand, and we will continue to compete with M1 in the mobile market.”

Sharing assets with M1 can help StarHub reduce its costs and improve its coverage. Mock explained:

“This sharing is to improve our mobile coverage for customers, manage our costs, and compete effectively in the longer term.

This sharing could help us bring the Singapore infocommunications industry to the next level, competing not on pure infrastructure ownership, but at a higher level of customer service and innovative value creation.”

While StarHub and M1 are expected to benefit from lower costs, the duo are still rivals. Mock expects the differentiation between the two companies to come from their customer service standards and the overall value they can provide to customers.

Differentiating from the crowd

Dennis Chia, StarHub’s chief financial officer, talked about the telco’s stake in film production company mm2 Asia:

“We acquired an 8.8% stake in Catalist-listed regional production house mm2 Asia Ltd for $18.04 million in June 2016. We already have a fruitful track record of working together since 2011.”

Chia also delved into why the partnership is important for StarHub’s pay TV business:

“We believe this deal will help improve our pay TV offerings with more local content. With programmes that they produced from travelogues to children infotainment to hit movies like Ah Boys To Men, we expect to dive deeper into local production and use it to differentiate ourselves from the competition.”

StarHub’s pay TV business is under pressure from other online streaming options and piracy. The telco hopes to stand out from the crowd with local productions that are unique to its channels.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.