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StarHub Ltd’s Growing Enterprise Business: 3 Key Things Management Wants Investors to Know

StarHub Ltd’s (SGX:CC3) Enterprise Fixed business segment was one of the bright spots in 2016 in an otherwise flat year for the telco. In 2016, StarHub recorded a 1.9% fall in total revenue, but its Enterprise Fixed business segment bucked the trend and posted a 3.9% revenue increase.

The performance of the Enterprise Fixed business was featured in the management’s discussion section of StarHub’s latest annual report (for 2016). The section is where the management team sought to address the most pressing questions at the telco. It’s a commendable effort, and one worth reading through.

Here are three key insights on StarHub’s Enterprise Fixed business that management shared:

1. StarHub’s own fibre network

StarHub’s chief commercial officer, Kevin Lim, explained the key pillars of the Enterprise Fixed business:

“Serving the enterprise customer involves a number of key pillars: investments in infrastructure, building trust of customers and a focus on the customer’s business.”

For infrastructure, StarHub is laying its own fibre network for its customers. Lim commented:

“In the past six over years, we have been digging trenches and rolling out our own fibre network to serve as a backbone and also as a separate access network to commercial buildings.

This has also allowed us to provide many companies with true redundancy as we offer both operator and path diversity. The NBN [national broadband network] will continue to be used to serve residential customers and small & medium businesses (SMBs) who may not require enterprise grade connectivity and availability.”

Lim makes a distinction between the NBN and StarHub’s own enterprise grade connectivity here. StarHub hopes to provide more reliable connectivity for enterprise customers who need it.

2. The customer’s trust

Lim also stressed on the importance of providing great service to win over enterprise customers:

“Trust in the enterprise space is critical as businesses rely on our services to conduct business and serve their customers. When we fail, they fail. To win their trust, we have invested in quality programmes that cover technical, delivery and support assurance standards.

We remain committed to delivering a high level of account support, service delivery and network resiliency.”

3. The customer’s business is also StarHub’s business

In addition, Lim shared his thoughts on the importance of StarHub understanding the needs of its enterprise customers:

“Understanding what our enterprise customers need to run their businesses efficiently, the business challenges and desired outcomes, will help shape our products and solutions, and provide us with an appreciation of the outcome desired and the criticality of the services.”

The decisions that StarHub makes in this space is partly shaped by what its customers need. For instance, StarHub has invested in both data analytics and cyber security. Lim said:

“On this front, we have invested in data analytics starting with our telco data and have leveraged this to help customers gain insights into their customers and operating environment, to make better decisions and serve their own customers better.

Cyber security is getting growing recognition from the server room to the boardroom, as something that undermines the very core of business organisations. This will complement the suite of security services we already offer.”

Time will tell if StarHub is able to maintain its enterprise customer base and grow its Enterprise Fixed business in the future.

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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.