M1 – BT
M1 finally tunes in to pay-TV
Telco now ready to battle rivals SingTel and StarHub across all market segments
Singapore’s telecommunications trinity will compete head to head in mobile, broadband and television services for the first time in local history as M1 finally makes its long -prophesised foray into the pay-TV market.
From today, Singapore’s smallest operator will offer a range of low-cost educational programmes, music shows and movies to local consumers through a new service called 1box, plugging what is seen by many to be the final gap in its business portfolio.
For years, industry watchers have repeatedly highlighted the need for M1 to diversify as it has little room to manoeuvre in light of Singapore’s sky-high mobile adoption.
A quad-play telco, which has its business spread across voice, broadband, fixed line and pay-television segments, is seen by many analysts as the way forward.
‘This (pay-TV) would complete the quad-play proposition, allowing them (M1) to capitalise on the complete NGNBN (Next-Generation Nationwide Broadband Network) product suite,’ said Jeffrey Tan, a regional telecommunications analyst with OSK Research.
Like rival Singapore Telecommunications, M1’s pay-TV content is delivered via an Internet-based network to a customer’s television screen. What sets the two apart, however, is the fact that M1’s programmes are only available to those who subscribe to its broadband services.
The company is touting 1Box as a ‘value-added service’ for customers who are already using its cable, ADSL (asymmetric digital subscriber line) or fiber-optic Internet plans.
M1 is the last telco to join the broadband game here, having launched its Internet services only in 2008, courtesy of an infrastructure tie-up with StarHub. Since then, it has repeatedly hinted that a nice pay-TV offering could be next on the cards.
In September this year, it started rolling out high-speed fiber-optic access through the government-backed NGNBN network when it became partly operational.
‘It (1box) will enable customers to get more out of their current M1 home broadband service,’ P Subramaniam, the company’s chief marketing officer, said in a statement.
To receive the content, consumers will have to rent a set-top from M1 at $5 or $12 monthly, depending on the broadband plan they are currently on.
Users will be able to receive M1’s programmes by linking new hardware to their televisions and broadband connections. Beyond streaming videos, subscribers can even use the new set-top to surf the Web on their TV and playback photos and family videos on a big screen.
In addition to the set-top rental cost, consumers will be charged for the programmes they view on an ala carte basis.
Educational content, which include shows for learning Chinese, maths and science, are offered at $2.14 monthly per channel. Music programmes featuring recordings of ‘live’ concerts are available for $5.95 per month, while movies are offered on a pay-per-view basis at prices ranging from $3.21 to $5.35.
‘Internet on a wide screen is indirectly the killer application (for 1box). Ala carte pricing means greater flexibility for customers, where a new market can be created,’ Mr Tan told BT.
‘They (M1) are trying very hard to increase stickiness and the ability to cross-sell,’ added OCBC Investment Research analyst Carey Wong.
While its low-cost, flexible pricing could be a draw for some, M1’s pay-TV foray is unlikely to ruffle the feathers of incumbents StarHub and SingTel.
SingTel’s mio TV service only took off in a big way last year after it paid premium to pry the Barclays Premier League broadcast rights away from StarHub. However, M1 lacks the financial clout to pull off a coup of this scale and so it has to go with a niche approach, Mr Wong said.
‘They (M1) have to make do with what limited resources they have. Most of the good content is now locked in,’ he explained, adding that the need for an additional set-top could be a further put-off for some consumers.
M1 – BT
M1 finally tunes in to pay-TV
Telco now ready to battle rivals SingTel and StarHub across all market segments
Singapore’s telecommunications trinity will compete head to head in mobile, broadband and television services for the first time in local history as M1 finally makes its long -prophesised foray into the pay-TV market.
From today, Singapore’s smallest operator will offer a range of low-cost educational programmes, music shows and movies to local consumers through a new service called 1box, plugging what is seen by many to be the final gap in its business portfolio.
For years, industry watchers have repeatedly highlighted the need for M1 to diversify as it has little room to manoeuvre in light of Singapore’s sky-high mobile adoption.
A quad-play telco, which has its business spread across voice, broadband, fixed line and pay-television segments, is seen by many analysts as the way forward.
‘This (pay-TV) would complete the quad-play proposition, allowing them (M1) to capitalise on the complete NGNBN (Next-Generation Nationwide Broadband Network) product suite,’ said Jeffrey Tan, a regional telecommunications analyst with OSK Research.
Like rival Singapore Telecommunications, M1’s pay-TV content is delivered via an Internet-based network to a customer’s television screen. What sets the two apart, however, is the fact that M1’s programmes are only available to those who subscribe to its broadband services.
The company is touting 1Box as a ‘value-added service’ for customers who are already using its cable, ADSL (asymmetric digital subscriber line) or fiber-optic Internet plans.
M1 is the last telco to join the broadband game here, having launched its Internet services only in 2008, courtesy of an infrastructure tie-up with StarHub. Since then, it has repeatedly hinted that a nice pay-TV offering could be next on the cards.
In September this year, it started rolling out high-speed fiber-optic access through the government-backed NGNBN network when it became partly operational.
‘It (1box) will enable customers to get more out of their current M1 home broadband service,’ P Subramaniam, the company’s chief marketing officer, said in a statement.
To receive the content, consumers will have to rent a set-top from M1 at $5 or $12 monthly, depending on the broadband plan they are currently on.
Users will be able to receive M1’s programmes by linking new hardware to their televisions and broadband connections. Beyond streaming videos, subscribers can even use the new set-top to surf the Web on their TV and playback photos and family videos on a big screen.
In addition to the set-top rental cost, consumers will be charged for the programmes they view on an ala carte basis.
Educational content, which include shows for learning Chinese, maths and science, are offered at $2.14 monthly per channel. Music programmes featuring recordings of ‘live’ concerts are available for $5.95 per month, while movies are offered on a pay-per-view basis at prices ranging from $3.21 to $5.35.
‘Internet on a wide screen is indirectly the killer application (for 1box). Ala carte pricing means greater flexibility for customers, where a new market can be created,’ Mr Tan told BT.
‘They (M1) are trying very hard to increase stickiness and the ability to cross-sell,’ added OCBC Investment Research analyst Carey Wong.
While its low-cost, flexible pricing could be a draw for some, M1’s pay-TV foray is unlikely to ruffle the feathers of incumbents StarHub and SingTel.
SingTel’s mio TV service only took off in a big way last year after it paid premium to pry the Barclays Premier League broadcast rights away from StarHub. However, M1 lacks the financial clout to pull off a coup of this scale and so it has to go with a niche approach, Mr Wong said.
‘They (M1) have to make do with what limited resources they have. Most of the good content is now locked in,’ he explained, adding that the need for an additional set-top could be a further put-off for some consumers.
TELCOs – BT
Telcos may have to disclose actual broadband speeds
IDA is also proposing they not be allowed to block legitimate content and services
CONSUMERS could get a better idea of the real Internet broadband speeds they are paying for, instead of the maximum speeds advertised by service providers.
The Infocomm Development Authority of Singapore (IDA) issued a consultation paper yesterday seeking feedback on new policy recommendations it plans to put in place. And one recommendation is a new requirement for telcos to disclose real or average speeds consumers can expect with their broadband plans. While telcos typically advertise theoretical maximum speeds, these are rarely achievable due to various factors such as network congestion and peak consumer traffic times.
IDA said it aims to improve transparency so consumers can make informed choices about Internet services. The regulator also said: ‘(The recommendations) seek to protect consumer interests by ensuring that fierce competition in the market does not lead to Internet service providers (ISPs) or telecom network operators degrading the Internet access service quality to end-users, in their bid to compete on price or to lower cost.’
Telcos are also not to block legitimate content and services, said IDA. For example, they will not be able to block voice over Internet protocol (VoIP) applications such as Skype, which might cannibalise their voice revenues.
IDA is, however, allowing ISPs to throttle or slow down such services to manage service-level quality across their users, but they must disclose any such moves to consumers. ISPs are also allowed to provide premium-tier services – for example, a dedicated line for streaming video or other such bandwidth-intensive applications.
Once finalised, the recommendations will be made either as part of a directive to telcos here or included in legislation. IDA has not spelled out how prominently service providers will have to disclose their quality of service (QoS) levels.
The new policies will likely cover mobile broadband providers as well as the new players that will accompany the debut of the Next Generation Nationwide Broadband Network.
IDA already monitors fixed-line broadband QoS service levels and has a minimum set of availability and latency requirements for telcos to meet.
SingTel and StarHub said they will review the consultation paper and submit responses. The closing date for views and comments to be submitted to IDA is Dec 16.
SBSTransit – BT
SBS Transit Q3 profit up 20.4% to $12.7m
HIGHER bus and train ridership helped lift SBS Transit (SBST)’s net profit 20.4 per cent to $12.7 million for the third quarter ended Sept 30.
Revenue climbed 6 per cent year on year to $184.9 million, mainly on stronger bus and rail takings and higher advertisement earnings.
Operating expenses were 4.1 per cent higher at $169.1 million, mainly due to higher premises costs, higher fuel and electricity costs, higher depreciation expenses and higher other operating expenses. These were partly offset by lower repairs and maintenance costs.
Premises costs jumped 32.6 per cent to $9.3 million because of higher maintenance, including security fencing costs and the absence of Budget rebates from the government, while fuel and electricity cost 7 per cent more at $33.1 million.
Tax spiked 97.8 per cent to $3.1 million, due to certain receipts in the previous corresponding quarter being tax-exempt, as well as higher profits in the latest Q3.
Earnings per share increased to 4.14 cents, from 3.44 cents in Q3 last year.
SBST operates Singapore’s biggest public bus network, as well as a smaller rail network.
It said that Q3 revenue from bus operations rose 2.9 per cent to $140.2 million, mainly on a 5.7 per cent rise in average daily ridership compared with the same period last year.
Operating profit jumped 91.4 per cent to $3 million, mainly on higher bus fare revenue and lower repair and maintenance costs, although these were partly offset by hikes in premises costs, depreciations expense and other operating expenses.
Q3 rail revenue increased 13 per cent to $30.9 million as average daily ridership for the North-East Line rose 20 per cent, and that for the two light-rail transit systems went up 15.5 per cent. Operating profit improved 14.1 per cent to $4.1 million due to higher rail fare revenue.
But this was weighed down by higher electricity and staff costs, along with higher repair and maintenance costs.
Revenue from the advertisement business rose 42.2 per cent to $10.2 million, with operating profit 42.6 per cent higher at $6.1 million, mainly on higher bus advertisement revenue.
For the first nine months of the year, SBST’s net profit rose 2.6 per cent to $44 million, while revenue was 3.2 per cent higher at $539.3 million. Earnings per share for the nine months stood at 14.3 cents, up from 13.9 cents previously.
No dividend has been proposed. SBST’s stock closed one cent higher at $1.93 yesterday.
HLFin – Lim and Tan
• HLF’s performance in Q3 continues to disappoint: net profit fell 22% to $25.385 mln, a sharp contrast from the banks.
• While the contraction of the car hire purchase business is a “reasonable” excuse, HLF’s push into SME sector has clearly not yielded any results.
• Loans & Advances, at $6103.53 mln at end Sept’10, are still lower than $6136.99 mln at end’09, which was down sharply from $7412.92 mln at end 2008. And net interest Income dropped 15% to $47.40 mln.
• Assuming unchanged final dividend of 6 cents, full year total will be 10 cents, giving a yield of 3.2%.
• While trading at 0.89x book of $3.46, investors would be better off switching to bank stocks.
• We maintain HLF may be worth a look again at $2.70-2.80.