UOB Kay Hian increased its price target on Singapore's second biggest telecom firm StarHub Ltd to S$3.25 from S$3.09 and maintained its hold rating.

StarHub shares were up 1 per cent at S$3.16, having risen 8.6 per cent so far this year and underperforming the broader index.

The brokerage tweaked its revenue forecasts based on an anticipated faster pace of growth for fixed network services.

It expects revenue to grow 20.9 per cent for 2013 versus a previous estimate of 14 per cent and 19.1 per cent for 2014 versus a previous estimate of 13.6 per cent, assuming StarHub secures 15 per cent of the market outside Singapore's central business district within two years.

UOB also said StarHub offered an attractive dividend yield of 6.4 per cent.