Starhub (CC3.SG) off 2.5% at 5-session low of $2.32, bucking gains by most other STI components, as stock trades without dividend entitlement, says Dow Jones.

Telco to pay $0.05/share dividend Sept 3, has pledged to maintain payout every quarter, translating to attractive annual 8.4% yield based on yesterday’s close.

While dividend yield highest among Singapore telcos, concerns remain over Starhub’s ability to maintain payout given risk to its free cash flows as competitive pressure not letting up. Some analysts however, say concerns over rising competition may be overblown.

Macquarie, which has Outperform call with $2.62 target, notes market share erosion for pay-TV business less than expected, with Starhub sustaining subscriber base through better packages, new channel offerings; also tips huge market potential in corporate data business once Singapore’s high-speed national broadband network launches later this year.

Support at current August low of $2.30.