Starhub

Starhub: OCBC upgrades to Hold (from Sell) on valuation, retains DCF-based fair value of $3.81. Notes Starhub's share price has declined as much as 5%, after the telco posted a 6% y/y fall in 2Q14 earnings (slightly missing OCBC's forecast) , as well as lowering its FY14 service revenue guidance from single-digit growth to maintain at about 2013 level. Still prospects for Starhub remain muted. Besides the still itnense competition in the broad band space, the saturated pay TV space, also the road to lifting mobile ARPUs is likely to be a long one, despite efforts by telcos to monetise data usage via tiered pricing plans. A recent study showed that as WiFi becomes more available and a lot of mobile plans become more penalizing, ppl are learning how to switch over to WiFi on their phones.