FAQ Check: StarHub answers 7 queries on its pay-TV service

Find out why StarHub does not offer payTV on fibre and more.

After Nomura's meeting with StarHub management, the analyst does not expect its solid execution track record to be derailed, but there are many external risks.

Nomura provided a summary of its Q&A with StarHub:

Q) Why doesn't StarHub offer pay-TV on fibre?

A) StarHub is currently working to expand its content rights to cover IP-TV, as it believes it is important to have a good content line up at launch. In addition, they are yet to be awarded the IP-TV Licence (their existing licence is primarily cable TV).

Q) Are there still limitations on which pay-TV content can be shown via which platform (eg not all content can be delivered via fibre or HFC)?

A) Yes, but increasingly StarHub is negotiating most of its content to be delivered across all platforms (HFC, mobile and fibre). This can potentially add to higher costs for content too, but is not material.

Q) How was the recent content cross-carriage experience with SingTel on Euro-Cup (which was signed exclusively by StarHub)?

A) Good. StarHub was able to deliver this content to all customers in a fast and reliable method but majority (we assume 90%) of these customers were still from StarHub, and only a small portion of viewers were SingTel’s.

Q) How does content carriage fee work?

A) The cross-carriage charge is intended to reflect the costs that the recipient operator incurs in carrying the supplying operator’s content. The cross carry charges included fixed and variable elements (linked to the number of viewers), and the charges are reciprocal between the operators. The charges were determined through negotiations between the operators and if any new player enters, this may have to be renegotiated. (Note, M1 needs 10k pay-TV customers before it is eligible for content cross carriage).

Q) Any thoughts on how biding for BPL (Barclay Premier League) could pan-out?

A) The negotiations haven’t started yet and FAPL is still sorting out its discussions with some of the Europeans operators. The situation in Singapore has changed materially with content cross carriage rules, as previously this content was only given on an exclusive basis. Hence, some delays are possible.

Q) Is StarHub’s agreement/ obligation to carrying free-to-air (FTA) content in Singapore on HFC until 2017 an impediment to fibre take-up?

A) Not really. StarHub can also discuss with MDA to carry FTA TV on fibre too. Also, StarHub can extent the HFC agreement to 2020.

Q) Reasons for higher pay-TV churn in recent quarter?

A) Mainly promotional activity and some customers (~1k) didn't extend their contracts post the initial promotional period. StarHub still believes there is room to increase penetration and hence it’s trial promotions.

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