Published July 16, 2009

StarHub's new CEO has his work cut out By WINSTON CHAI Email this article Print article Feedback TERRY Clontz's appointment as StarHub CEO in 1999 came at a time when the local telecommunications sector was ringing in a sea change with the dawn of market liberalisation. A decade on, the firm's change-of-guard again coincides with a new era of competition, and the stakes are just as high for former M1 chief Neil Montefiore. In anointing its new chief executive, StarHub has clearly opted for a safe bet by roping in a seasoned deckhand to steer the course when Mr Clontz retires in January next year. StarHub's former president Mike Reynolds would arguably have been the first choice had he not left to take over as CEO of New Zealand's third mobile operator 2degrees. With the telco sector on the cusp of sweeping changes, it needed someone who could promptly get up to speed and Mr Montefiore naturally fits the bill. Having taken over the reins at M1 three years before StarHub even came into the picture, he is well attuned to Singapore's competitive landscape and regulatory nuances. In addition, StarHub can expect to glean some insights into the inner workings of a rival and possibly uncover its Achilles heel by poaching the former M1 helmsman. While it is clear what Mr Montefiore brings to the table, it is what he doesn't that has raised a fair share of market eyebrows. Culturally, StarHub displayed a more brazen competitive approach under Mr Clontz's stewardship. It went tit-for-tat with SingTel on all fronts from mobile to pay-TV and broadband services. M1 on the other hand, was more conservative and defensive while Mr Montefiore was at the helm. More importantly, M1's business is anchored on consumer mobile services, a segment which makes up one-fourth of StarHub's overall business portfolio. With Singapore's cellphone penetration already at a sky-high level of 133.8 per cent, the mobile sector is already teetering on the brink of saturation. The prerogative now among all three operators is to drive the uptake of new mobile data services - a task which Mr Montefiore may not be all that familiar with, given his priority in the past decade was primarily about increasing mobile subscriber share. StarHub's two other cash cows are cable TV and broadband, businesses that are also foreign to its incoming chief. The dynamics of negotiating exclusive content agreements, and the intricacies of being an Internet service provider are things that Mr Montefiore will need to learn quickly, though time may not be on his side. Like its counterparts, StarHub is being threatened on all fronts. Its cable television business is facing competition from SingTel's mio TV offering. The latter's pay-TV foray is hardly denting StarHub's market share for now. However, it does throw a spanner in the works when it comes to bidding for content; the bruising bidding war between StarHub and SingTel for last season's English Premier League (EPL) broadcast rights is a salient reminder. Both companies are again going head-to-head this year - a move that will inevitably jack up costs at a time when subscribers are tightening their purse strings. In addition, new pay-TV rivals could emerge once Singapore's fibre-optic network is in place in end-2012 as breakneck broadband speeds will allow television programmes to be easily streamed to consumers. The same applies to Internet services as the government's open-access mandate levels the playing filed and allows new entrants to have access to the country's broadband pipes at the same price as incumbents. While new competitors may throw their hat into the ring, the biggest thorn in StarHub's side will continue to be SingTel. In this regard, having the former M1 chief as its new front man could be the harbinger of a closer alliance against the country's dominant telco; after all, the duo had already joined hands to bid for the contract for building Singapore's fibre-optic network in 2008. M1 is also using StarHub's cable Internet platform to power its current broadband offerings. Given their recent track record, perhaps a full-fledged union could eventually be in the making to stem the surging red tide. And having a face that is familiar to both companies would certainly smoothen the way for any consolidation.