5 Things We Learned from StarHub’s FY2025 Results

The modern telecommunications landscape is defined by a precarious balancing act. On one side, providers must commit to heavy capital expenditure for next-generation infrastructure; on the other, they face an increasingly crowded consumer market where aggressive pricing has become the primary tool for competition. For StarHub, the FY2025 financial year represents a pivotal transition point. The company is pivoting its identity away from its intensive “build-and-invest” DARE+ transformation period and entering what leadership calls the “harvest” phase. Under the theme of “Making it count,” StarHub’s latest results offer a roadmap for how a traditional telco intends to evolve into a high-margin digital service provider through disciplined execution.

Here are the five key takeaways from StarHub’s FY2025 financial performance and what they signal for the strategic horizon.

1. The Enterprise Pivot: MDI as the New Growth Engine

While the consumer segment remains a significant portion of the business, the Regional Enterprise Business has emerged as the company’s primary engine for growth. In FY2025, Regional Enterprise revenue grew 2.9% year-on-year, propelled by a 5.3% increase in Managed Services. This growth was largely the result of project completions within the “Modern Digital Infrastructure” (MDI) platform.

This performance stands in sharp contrast to the consumer divisions, where revenue declines in Mobile (7.7%), Broadband (0.5%), and Entertainment (7.1%) highlight the commodity price war currently saturating the Singapore market. Crucially, the Broadband segment’s pricing pressure is evident in its ARPU (Average Revenue Per User) decline from $36 to $34, while Mobile ARPU has remained stable at $22. CEO Nikhil Eapen addressed this divergence directly:

“While our regional enterprise business continues to grow, the Singapore consumer telecommunications market has experienced prolonged pricing pressure. This continues to weigh on returns and the pace of investment across the sector.” — Nikhil Eapen, CEO, StarHub

2. The Hidden Surplus in a Cash Flow Deficit

At first glance, StarHub’s reported Free Cash Flow (FCF) appears concerning: a deficit of S$24.7 million for FY2025. However, a financial strategist looks past the headline to the “tail-end” of the DARE+ investment cycle. This deficit is entirely due to a significant, non-recurring investment in future capacity.

In June 2025, the company made a one-off S$188.0 million payment for 700MHz spectrum rights. When this non-operating cost is adjusted, the underlying business health is robust, showing that core operations are generating significant cash as the company shifts from CAPEX-heavy construction to OPEX-focused efficiency.

Free Cash Flow Analysis (FY2025):

• Reported FCF: S$24.7 million (Deficit)
• Adjusted FCF: S163.3 million (Reported FCF + S188.0M Spectrum Payment)

This adjusted surplus represents a S$1.1 million increase year-on-year, confirming that StarHub is successfully “harvesting” cash from its infrastructure investments.

3. The S$70 Million Multi-Year Efficiency Drive

As StarHub enters the harvest phase, the strategic focus is shifting from infrastructure expansion to radical cost optimization. The company has identified four “Strategic Cost Pillars” designed to rightsize the business and protect margins against consumer-side volatility:

1. Legacy Decommissioning: Retiring outdated hardware and software.
2. Network Optimisation: Streamlining infrastructure for maximum efficiency.
3. Systems Re-architecture: Modernizing the IT backbone.
4. Business Simplification: Removing operational redundancies.

While S60 million in savings were identified in Q3 and an additional S10 million in Q4, it is vital to note that these initiatives are part of a multi-year roadmap. StarHub is targeting the full S$70 million in savings to be realized between FY2026 and FY2028, ensuring a long-term cushion for the bottom line.

4. Dividend Reliability Amidst Accounting Adjustments

Despite a significant drop in reported Net Profit Attributable to Shareholders (NPAT)—which fell from S160.5 million to S86.4 million—StarHub is signaling reliability to its investors. A strategic analysis shows the reported figure was weighed down by a **S14.1 million** one-off forfeiture payment for the return of one 700MHz spectrum lot and the absence of a S22.6 million DARE+ provision utilized in the prior year.

Excluding these one-off items, the Adjusted NPAT stands at S$100.5 million. This operational clarity allows the Group to maintain its commitment to shareholders, declaring a total FY2025 dividend of 6.0 cents per share. StarHub has set a firm floor for the coming year, targeting the higher of 6.0 cents or 80% of adjusted NPAT for FY2026.

5. Cybersecurity as a Critical Infrastructure Differentiator

StarHub is aggressively repositioning itself to avoid the “dumb pipe” trap. By positioning itself as a “Critical Infrastructure provider,” the company is creating a high-moat offering that “value-only” Mobile Virtual Network Operators (MVNOs) cannot replicate. This is reflected in the 4.3% year-on-year revenue growth in Cybersecurity Services.

Management views cybersecurity not as an add-on, but as a core differentiator. As cyber threats evolve, StarHub’s sustained, disciplined investment in its MDI platform allows it to provide integrated security and connectivity for government and large enterprise clients. This shift toward high-security, recurring-revenue contracts is the cornerstone of its strategy to mitigate the “commodity” nature of the consumer mobile market.

Conclusion: A Multi-Brand Shield Against Pressure

Looking toward FY2026, StarHub has provided calculated guidance, expecting EBITDA to land between 75% to 80% of FY2025 levels. This reflects a strategic decision to retain commercial flexibility and increase Capex commitment (13% to 15% of revenue) for IT and Cybersecurity investments.

The ultimate question for the market is whether StarHub’s multi-brand strategy can effectively segment a shrinking margin pool. By deploying giga! for the digitally savvy, eight for value-seekers, and MyRepublic for the “geeks and gamers” segment, StarHub is attempting to surround the competition. Can this surgical segmentation successfully offset the “prolonged pricing pressure” of the broader market?

Success in this next phase will depend entirely on Disciplined Execution.

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