M1 – BT

Higher acquisition costs weigh on M1

Telco's profit down 5.3% in Q1, despite operating revenue rising 1.9%

Higher acquisition costs pushed M1's net profit in the first quarter down by 5.3 per cent over the corresponding period last year, to $40.3 million.

The cost per postpaid customer was $363, compared with $330 a year ago, although this figure tends to vary from quarter to quarter, said the telco.

Higher acquisition costs could be due to a variety of factors, such as the sale of more expensive handsets such as the Apple iPhone, which take longer to break even.

Theoretically, the initial acquisition costs associated with subsidising handsets would eventually translate to longer term revenue from customer contracts.

M1's operating revenue for the first quarter hit $262.5 million, up 1.9 per cent from the same quarter last year.

Last quarter, its net profit was $37.6 million, while revenue went up to $317.1 million.

Its full year 2011 saw net profit rising 4.5 per cent to hit $164.1 million, with revenue up 8.8 per cent to $1.06 billion.

The postpaid segment continued to make a gradual increase as a proportion of M1's overall customer base, at 52 per cent. Postpaid customers contributed 87 per cent of the telco's revenue mix in the first quarter.

Within the postpaid base, smartphones made up 76 per cent of this pool in the fourth quarter, but this figure dropped to 69 per cent in the first quarter.

M1's operating expenses were $211.5 million, and ended the quarter with cash and cash equivalents of $6.9 million.

Karen Kooi, M1 CEO, said during an analyst call that there has been an increase in the proportion of smartphones using mobile data. In the past, this figure was as high as 98 per cent from mobile dongles, but smartphones now use 32 per cent of M1's traffic, she said.

She noted that mobile data and fixed services revenue continued to grow. Mobile data made up 23.1 per cent of service revenue.

Its overall service revenue increased 3.9 per cent to $192 million.

M1 has 202,000 wireless broadband subscribers. Ms Kooi said that there has been a steady migration of customers away from ADSL and cable switching to fibre broadband services.

However, at the close of M1's last financial year, analysts pointed out that delays with the roll-out of the next-generation nationwide broadband network (NBN) are likely to delay M1's hoped-for gratification by providing new services on the fibre optic network.

M1 is also on track to complete its 4G (fourth generation) LTE (long term evolution) network upgrade this year.

The telco has a 25.8 per cent share of the mobile market, according to the Infocomm Development Authority (IDA).

SingTel's latest market share figure stands at almost half the market, at 45.8 per cent. StarHub has the remaining customer base in the country.

The counter closed one cent higher at $2.44 yesterday.

M1 – BT

Higher acquisition costs weigh on M1

Telco's profit down 5.3% in Q1, despite operating revenue rising 1.9%

Higher acquisition costs pushed M1's net profit in the first quarter down by 5.3 per cent over the corresponding period last year, to $40.3 million.

The cost per postpaid customer was $363, compared with $330 a year ago, although this figure tends to vary from quarter to quarter, said the telco.

Higher acquisition costs could be due to a variety of factors, such as the sale of more expensive handsets such as the Apple iPhone, which take longer to break even.

Theoretically, the initial acquisition costs associated with subsidising handsets would eventually translate to longer term revenue from customer contracts.

M1's operating revenue for the first quarter hit $262.5 million, up 1.9 per cent from the same quarter last year.

Last quarter, its net profit was $37.6 million, while revenue went up to $317.1 million.

Its full year 2011 saw net profit rising 4.5 per cent to hit $164.1 million, with revenue up 8.8 per cent to $1.06 billion.

The postpaid segment continued to make a gradual increase as a proportion of M1's overall customer base, at 52 per cent. Postpaid customers contributed 87 per cent of the telco's revenue mix in the first quarter.

Within the postpaid base, smartphones made up 76 per cent of this pool in the fourth quarter, but this figure dropped to 69 per cent in the first quarter.

M1's operating expenses were $211.5 million, and ended the quarter with cash and cash equivalents of $6.9 million.

Karen Kooi, M1 CEO, said during an analyst call that there has been an increase in the proportion of smartphones using mobile data. In the past, this figure was as high as 98 per cent from mobile dongles, but smartphones now use 32 per cent of M1's traffic, she said.

She noted that mobile data and fixed services revenue continued to grow. Mobile data made up 23.1 per cent of service revenue.

Its overall service revenue increased 3.9 per cent to $192 million.

M1 has 202,000 wireless broadband subscribers. Ms Kooi said that there has been a steady migration of customers away from ADSL and cable switching to fibre broadband services.

However, at the close of M1's last financial year, analysts pointed out that delays with the roll-out of the next-generation nationwide broadband network (NBN) are likely to delay M1's hoped-for gratification by providing new services on the fibre optic network.

M1 is also on track to complete its 4G (fourth generation) LTE (long term evolution) network upgrade this year.

The telco has a 25.8 per cent share of the mobile market, according to the Infocomm Development Authority (IDA).

SingTel's latest market share figure stands at almost half the market, at 45.8 per cent. StarHub has the remaining customer base in the country.

The counter closed one cent higher at $2.44 yesterday.

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