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September 22, 2021
Singapore's telco StarHub nudges up its share of the country's broadband market to 40%, all with a grab of a majority stake in the Singaporean broadband unit of its former rival MyRepublic, for which it will pay up to S$162.8 million (US$120.5 million).
MyRepublic, which will become a StarHub subsidiary within a new entity called MyRepublic Broadband, has a 6% share in Singapore's broadband market, where it is one of the more mature players. StarHub's CEO Nikhil Eapen praised MyRepublic's "lean operating model and experiences in regional markets."
MyRepublic will continue to operate its Singaporean mobile and platform businesses and Australian and New Zealand broadband as before, along with its franchise partnership with Indonesia's Sinar Mas Group. MyRepublic, which formed a decade ago and launched its broadband offerings in 2012, also retains the remaining 49.9% stake in the broadband business.
As part of the slightly complex mixed equity-and-debt deal, StarHub pays S$70.8 million for the 50.1% stake and a S$92 million deferred amount which depends on the broadband unit's future financial performance. It will also refinance S$74.2 million of MyRepublic's debt for three years when the deal completes, which the two parties say should be by late December after regulatory approvals.
MyRepublic is also eyeing an IPO. Its co-founder and chief executive Malcolm Rodrigues has said the partnership with StarHub "propels us forward in MyRepublic's journey towards an IPO," and will give it the cash to scale up its operations.
Rodrigues will remain head of the broadband unit.
MyRepublic had suffered a security brief uncovered on August 29, which involved a third-party storage platform and saw the personal data of 79,388 of its mobile subscribers breached. The affected system contained identity documents including scans of subscribers' national identity cards and utility bills of foreign workers.
Rodrigues's company had over the summer been attempting to ramp up its cybersecurity offerings for enterprises, spying growth potential in the market. MyRepublic currently supports 6,000 enterprise customers and is taking aim at robustly growing smaller financial services companies. It also said it was possibly pondering acquisitions to plug product gaps, such as tools to protect against malware, distributed denial of service attacks, and phishing.
Meanwhile, StarHub saw its net profits plummet by double digits in the first half of 2021, shrinking by 12.3% to S$67.9 million. The operator has struggled to supplant its falling mobile revenues with new business lines in cybersecurity and data.
On the other hand, its cybersecurity division swung $1 million into the black after making a $2.1 million loss last year. And today's deal brings it several steps closer to expanding its footprint in a broadband segment which after all has flattered Rodrigues's operator.
In the first half of 2021, its broadband revenues increased by a yearly 12.5%.
Read more about:Asia
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