Starhub Ltd. Business Information, Profile, and History
Driven by a passion for listening and providing what customers want, StarHub endeavours to bring affordable and premium quality services with innovative and useful features to all its customers. StarHub raises the level of competition in Singapore, challenging others as well as itself, to constantly introduce new world-class services at competitive prices. This unwavering commitment will further strengthen Singapore's position as a leading info-communication hub in the region.
History of Star Hub Ltd.
StarHub Ltd. is the fast-rising challenger in the Singapore telecommunications market, placing second behind former government monopoly Singapore Telecom (SingTel). StarHub is also that market's only telecommunications group capable of providing the full range of telecommunications services, combining fixed and wireless telephone networks, cable television service, and broadband Internet access. As such, 75 percent of Singapore's population of one million households subscribes to at least one of StarHub's services, and nearly 30 percent of the population subscribes to two of the company's services. The company offers fixed line digital telephone service, as well as its own GSM and high-speed 3G cellular phone service, through StarHub Mobile. StarHub also has put into place international roaming agreements with some 13 countries worldwide. StarHub's share of the Singapore mobile market tops 30 percent. The company's cable television network is available to 99 percent of Singapore's population, and features some 50 channels, most of which are international channels. StarHub launched a digital television package in 2004 and, on a more limited scale, a Digital Terrestrial Television system, available to corporate customers. The only cable TV supplier in Singapore (which has banned satellite television services), the company boasts more than 400,000 customers. StarHub's broadband Internet access service piggybacks on its cable television network, offering the island's highest download speeds of up to 30 Mbps. The company holds more than 46 percent of Singapore's broadband market. The company also offers dial-up Internet access. Formed in 1998, and listed on the Singapore Stock Exchange since 2000, StarHub is led by CEO and Chairman Terry Clontz. In 2004, the company posted revenues of SGD 1.35 billion.
Late 1990s Start-Up
The Singapore government's resolve to transform the city-state into a southeast Asian technology hub in the 1990s set the scene for the emergence of new players in the country's telecommunications and media markets. The government's decision to abolish Singapore Telecom's monopoly on the telecommunications sector brought interest from a number of groups, both domestic and foreign, eager to grab a share of one of the country's most promising industries. In its drive to privatize and deregulate the telecommunications market, the Singapore government went farther than nearly all of its counterparts, both in Asia and in the West, taking bids not only for the license to operate cellular telephone services, but also for the license to establish basic services. A factor behind this initiative was the relatively small size of Singapore's population, with just two million people. Yet the government to transform Singapore into one of the world's most "wired" cities played a major factor in the introduction of competition to the telecommunications sector.
In 1998, a consortium led by ST Telemedia, a unit of the Singapore state-owned investment agency Temasek Holdings, won its license bid and established StarHub Holdings. Other shareholders in the new company included BT Group, Nippon Telegraph & Telephone Corp., Singapore Press Holdings, and Medicorp, although ST Telemedia remained the controlling partner with a 50 percent stake. StarHub began setting up its cellular and fixed line networks, including building its own fiber optic network. The company's investment in this effort topped $1.5 billion. StarHub expected to launch its cellular network by 2000; the fixed line telephone sector was not expected to be deregulated until 2002.
In 1999, StarHub brought in a new CEO, Steven Terrell (Terry) Clontz, an American who had entered the telecommunications industry as an engineer for Southern Bell in 1973. Clontz later joined BellSouth International, rising to president of that company's Asia Pacific region division before taking the president and CEO positions at IPC Information Systems. Clontz led StarHub to its first acquisition, Cyberway Pte., one of only three Internet service providers (ISPs) in Singapore. The company rebranded its Internet service under the StarHub brand, and then jump-started the market by offering the city's first free dial-up service. This move helped establish the StarHub brand among customers for the first time. The addition of Internet service added an important component to its "hub" concept, that of providing the full array of telecommunications services.
StarHub officially launched its cellular phone operations in 2000. The company quickly established itself as an aggressive competitor, introducing customer services such as free incoming calls and per-second billing. The company also benefited from the decision by the government to step up the pace of the telecommunications sector's liberalization, ending SingTel's fixed line monopoly in 2000. Another focus for the company at the beginning of the new decade was the extension of its international service agreement networks. By the end of 2000, the company had signed agreements with partners in 16 countries, including mainland China, as well as the United States and the United Kingdom. The company expected to build out this network to more than 50 partners worldwide into the mid-decade.
Completing the Hub in the 2000s
StarHub began preparing for its future expansion in 2001, bidding for and winning one of the city's 3G cellular phone licenses. In the meantime, the company also had begun negotiations that would bring a major extension to its "hub" concept. Those negotiations resulted in the company's announcement that it had reached a merger agreement with Singapore Cable Vision (SCV), the city's only pay-TV provider. (Satellite television remained banned by the Singapore government, concerned over its potential use by terrorist organizations, whereas the cable television network allowed the government to impose content controls.)
SCV had been founded in 1991 and was granted the license to build the city's cable television network. In exchange for building the network, which was to reach 99 percent of Singapore's homes and businesses, SCV was granted a monopoly on the city's pay-television market lasting into the early 1990s. By 1995, SCV had completed much of its network and officially launched its service with 12 channels. The cable service started with a base of 15,000 subscribers.
Yet SCV grew only slowly, in part because of the novelty of a pay-TV service in Singapore. By 1996, with more than 155,000 homes made cable-ready, the company counted only 22,000 subscribers. The late 1990s saw a more massive adoption of the service, however, as SCV built out its network to reach more than 930,000 homes, or 99 percent of the market, at a cost of some SGD 600 million ($348 million). The company also had made strides in improving its customer base, topping 225,000 subscribers by 2000. Aiding its surge in subscribers was the launch of cable-based broadband Internet access in 1999. By 2000, the company's MaxOnline broadband service counted more than 50,000 subscribers.
While the rest of the telecommunications world had been buzzing around the future "convergence" of telecommunications and media technologies, the newly enlarged StarHub became one of the first to turn the concept into reality. With sales of nearly SGD 700 million ($400 million), the new company combined broadband Internet with cellular and fixed line telephone and television, with a coverage of nearly 100 percent of the market. As the next step toward its convergence, the company rebranded its broadband and cable television operations under the StarHub brand.
By 2003, StarHub Cable TV's subscriber base had topped 300,000, with a penetration rate of nearly one-third. In that year, the company's cable television operation received a new boost when the Singapore government announced that the Singapore market was most likely not large enough to support two pay-TV services. As a result, StarHub retained a de facto monopoly on that market. By the end of that year, the company's cable television service neared 400,000, lured by its expanded offering of 50 channels.
StarHub continued to develop new technologies toward the middle of the decade. The company rolled out a digital television service in 2004, adding 11 digital channels as well as a series of interactive services. The company hoped that the launch of digital services would help it push its penetration to as high as 70 percent of the market before the end of the decade. Meanwhile, the company's cellular phone operations also had been performing strongly, capturing nearly one-third of the market. The company remained the third-place player, however, behind leader SingTel and rival M1.
StarHub went public in October 2004, listing its stock on the Singapore Stock Exchange. The maturity of the country's mobile telephone market, however, with bruising competition and near total penetration, as well as a lack of understanding of the cable television market by Asian investors, kept the company's initial share price low. In the end, the offering raised nearly SGD 460 million, valuing the company at more than SGD 2 billion. Nonetheless, the company's "hub" model remained attractive to many investors.
The company added a new link to its hub at the end of 2004, launching its first 3G mobile telephone service. The high-speed mobile telephone standard was complemented by the launch of next-generation high-speed broadband services, with a top speed of 30 Mbps through the company's cable lines. StarHub also launched a new pay-as-you-go broadband service, in an effort to step up its subscribers' adoption of multiple services.
The hub concept also enabled StarHub to post some impressive market penetration rates into the second half of the decade. By the end of 2005, the company was able to claim that some 75 percent of Singapore's population had adopted at least one of its services. More than two-thirds had signed up for two of the group's offerings. A minor percentage had adopted all of the group's cable TV/mobile/broadband fixed line services, and StarHub targeted this segment for its future growth.
In July 2005, for example, the company rolled out a special offering bundling broadband Internet access with free unlimited outgoing calls using its fixed line digital network. The company also launched a new interactive SMS/MMS channel for its cable system. Although the channel was provided free to StarHub cable subscribers, the company charged a fee for sending SMS and MMS messages to the channel. The company also planned to launch a channel for interactive video gaming, while also introducing television-based games to its mobile handsets. In November 2005, the company's 3G network offerings grew even more robust with the launch of the I-mode cellular telephone Internet service pioneered by Japan's NTT DoCoMo. StarHub appeared to have clear plans to remain a major player in the Singapore telecommunications and media market.
StarHub Cable Vision Ltd.; StarHub Internet Pte. Ltd.; StarHub Mobile Pte. Ltd.; StarHub Online Pte. Ltd.
Singapore Telecommunications Ltd.; Singapore Telecom Mobile Private Ltd.; Keppel Land Ltd.; Pacific Century Regional Developments Ltd; Reditech Services (S) Private Ltd.; Cable and Wireless Singapore; Singapore Telecom Paging Private Ltd.; Inno-Pacific Holdings Ltd.
- Key Dates
- 1991 Singapore Cable Vision (SCV) is founded.
- 1995 SCV cable television service is launched.
- 1998 StarHub is founded to bid for fixed line and mobile telephone licenses.
- 1999 StarHub acquires CyberWay, one of three Singapore Internet service providers; SCV launches broadband Internet access via cable television network.
- 2000 StarHub launches its mobile telephone and fixed line networks.
- 2001 StarHub and SCV agree to merge.
- 2002 SCV is rebranded as StarHub Cable TV.
- 2004 StarHub goes public on the Singapore Stock Exchange; the company launches a 3G mobile telephone network.
- 2005 I-mode mobile Internet service is launched.
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