It was almost a year ago when StarHub (SGX: CC3) held its Investor Day 2022.
Back then, the telco reviewed the progress of its DARE+ initiatives while charting its way forward for 2023.
Hence, it is timely that the group releases an update on these initiatives as it plots the next phase of its growth.
StarHub recently reported an encouraging set of results for the third quarter of 2023.
For the first nine months of 2023, total revenue grew 4.8% year on year to S$1.7 billion while net profit climbed 29.1% year on year to S$114 million.
Back in August, the telco paid out an interim dividend of S$0.025, unchanged from a year ago.
Here are four aspects of StarHub’s Investor Day 2023 that investors should take note of.
1. Creation of an all-in-one app
The group is looking to become a digital ecosystem player with the execution of new delivery platforms.
This strategy involves the introduction of more digital products and platforms to drive new revenue streams and cross-selling opportunities.
The idea is to create a new funnel to drive better customer lifetime value as a way to cement loyalty.
In line with this goal, StarHub will create an all-in-one app for existing customers, partners, and non-StarHub customers.
Digital login will be enabled through the use of either SingPass or biometrics and the app will deliver targeted and personalised offers.
The telco will drive engagement through the gamification of its main page while simplifying the plans it offers.
The payment experience will also be simplified with the ability to set up recurring payment methods, all while being supported by 24/7 self-help and chatbots.
The target completion for this app is 2024 with customer migration from legacy systems thereon up till 2025.
Cybersecurity services under Ensign will still be a key part of StarHub’s strategy even as it delivers regional ICT services through its subsidiary Strateq and its associate JOS Singapore.
Source: StarHub’s Investor Day 2023 Presentation Slides
The group will also pursue large-scale regional enterprise projects, with the graphic above giving several examples of the types of verticals that StarHub plans to target.
2. Enterprise IT transformation
The second pillar of StarHub’s strategy is enterprise IT transformation.
This involves the ongoing simplification of the group’s complex enterprise products and processes.
To do so, StarHub will reduce multiple touchpoints and optimise its processes on a new cloud software-as-a-service platform to deliver services more cost-effectively and efficiently.
By the middle of next year, StarHub’s first enterprise products will be ready to migrate to new stacks.
The entire IT transformation is slated to be completed by 2025.
There are several benefits to undertaking these initiatives.
Customers will receive more convenient service through an integrated touchpoint while a common platform used for sales, order, customer service, and billing will enable StarHub to obtain a consolidated view of its customers, thereby allowing further personalisation.
3. Introducing Cloud Infinity
StarHub will pioneer Cloud Infinity, the world’s first autonomous metropolitan cloud network.
It will also be the world’s first hybrid multi-cloud data lake and artificial intelligence operations hub.
From 2024, StarHub will empower enterprises to harness this multi-cloud platform securely and effectively.
Clients will become co-creators of high-value applications enabled by automated networks.
There are four main parts to Cloud Infinity – Network-X, Cloud-X, Secure-X and Content-X.
Each area will offer services such as cloud-as-a-service or content-as-a-service by identifying gaps in the current marketplace and tapping on the cloud to solve them.
4. The creation of a data lake
The fourth and final part of StarHub’s strategy is to create a new platform called a data lake.
This cloud-based data lake will enable new customer engagement models to allow data-driven business decisions.
Data gathering will be automated and culminate in analysis to derive actionable insights.
This data lake will integrate into existing platforms and complete customer profiling from 2024.
By doing so, it will tie in with StarHub’s all-in-one app strategy as well as its focus on creating more enterprise solutions.
Get Smart: DARE+ outcomes maintained
StarHub targets a total of S$500 million in cost savings with these DARE+ initiatives.
Benefits will start flowing in 2025 and 2026 with full benefits to be enjoyed from 2027 onwards.
For 2023, around S$51 million of cost savings was achieved, below its target of S$80 million.
However, StarHub will lower total investments to approximately S$270 million, below its original DARE+ target of S$310 million, mainly due to cost rationalisation.
Around 90% of its total DARE+ investments will be made by 2024 with the balance to be incurred in 2025.
Investors will need more patience for the telco to see through these ambitious changes, but if these pan out well, the group could see an increase in revenue and net profit from next year onwards.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.