He projects a roughly 2.5% drop in consumer revenue next year, with mobile service revenue down about 2% as premium customers continue migrating to lower-priced SIM-only plans.
Without a big upward revision in the pricing for SIM-only offerings, blended mobile average revenue per user (ARPU) is likely to remain broadly stable in FY2026. “On a positive note, we expect the effect of sector consolidation to be visible in FY2027 with about 5% rise in mobile ARPU,” wrote Mittal in his Feb 19 note.
Similar pressure is expected across entertainment and fixed broadband, while higher capital expenditure and operating expenses tied to enterprise investments will weigh on margins.
StarHub plans to raise capital expenditure to 13% to 15% of revenue, focusing on cybersecurity and network retooling. Mittal says these enterprise investments should drive enterprise order book growth in FY2026 and lead to higher revenue in FY2027 and FY2028. “This will enhance revenue visibility and build a moat that could take peers five to seven years to replicate,” he adds. At the same time, management has guided for $70 million in cost savings over FY2025 to FY2028, with the bulk of savings expected in FY2027 and FY2028.
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Mittal now values StarHub’s core business at a 12-month forward Ev/Ebitda of 6.3 times to arrive at 61 cents per share, down from 86 cents previously, excluding its stake in cybersecurity unit Ensign. He conservatively values Ensign at 25 cents to 41 cents per share based on a two to three times 12-month forward revenue, with a mid-point at 33 cents per share.
StarHub has also committed to a 6-cent dividend for FY2026, which Mittal expects will help underpin the share price.
As at 11.20 am, shares in StarHub are trading 2 cents lower, or 1.85% down, at $1.06.
