Emerging Markets - Engines of Growth
Starhub commenced operations in 2000 and since that time, it has matured into a slick triple play operation with internet access, mobile phone services and cable TV content which can be subscribed purchased as a bundle. Indeed these bundles have been very attractive. 54% of Starhub customers are either double or triple play hubbers.
SingTel has been the long standing incumbent telecoms operator which has recently been allowed to enter the digital content delivery market. In July 2007, SingTel launched its Mio TV IPTV platform. Subscriber adoptions for the Mio TV platform has been lukewarm but that might be about to change as SingTel has secured the broadcast rights to the English Premier Language. This is a real coup, Starhub had carried the EPL for the past 10 years. Clearly in the bidding war for the rights, SingTel could justify the price-tag more than Starhub as it will help to fill out the content portfolio for Mio TV.
SingTel has also been spreading its wings abroad. Not only has the carrier had a long standing presence in Australia with its Optus operation but also has equity stakes in Pakistan (Warid Telecom), Philippines (Globe Telecom), (AIS in Thailand), among others. On a total operation basis, there are 262 million subscribers under the Singtel flag (wholly owned and minority investment) as of the end of 2Q-2009. One of SingTels very astute investments was in Bharti Airtel, India. It recently had the opportunity to boost ownership to 31.95% for Bharti Airtel and has the further opportunity to raise its equity in Bharti Telecom to 36.16%.
Having that footprint in India, will help SingTel to lock in growth. India is adding a staggering 15 million cellular subscribers per month. Yes, per month. By the end of the year, there will be more than 500 million cellular subscribers in India. Granted, Average monthly revenues per user are some of the lowest in the world (around US$ 6) but the economy is growing at around 6 to 8 percent per year.
SingTel did have bit of a head start, but Starhub needs to explore Emerging Market opportunities. A number of WiMAX licenses have been issued in Asia and there will be additional LTE 4G spectrum and licenses being issues over the next few years.
Starhub has done a great job building out its Hub triple play concept and has built out a strong brand image but there is no knocking organic growth. Starhub should be able to claw some market-share away from SingTel in the business and enterprise space, but Starhub should also be looking to investment opportunities in overseas markets. Not just mobile services but also content delivery and internet access. SingTel could very well replicate its triple play success in other markets using a combination of either cable TV build out (expensive and slow) or WIMAX, and/or cellular licenses for voice and mobility applications
As market maturity and competitions continues to weigh on not just the Singapore market but other Developed Markets, carriers are going to have to take Emerging Markets even more seriously than before. Obviously not every carrier can go out and find an Emerging Market opportunity but as competition and subscriber adoption continues to bit, those carriers with Emerging Market presence, will perform better.