M1 announces SG$44.9m profit for Q3

Singapore's third-largest telecommunications company, M1, has released its results [PDF] for the third quarter ending September 2015, announcing a marginal increase in its net profit after tax of 0.8 percent year on year, from SG$44.5 million ($32 million) to SG$44.9 million ($32.3 million).

Earnings before interest, tax, depreciation, and amortisation (EBITDA) were SG$86.6 million, an increase of 2.6 percent from the SG$84.4 million announced last year during the same period.

M1 saw operating revenue of SG$277.6 million for July to September, an increase of 11 percent year on year from the SG$250.2 million reported in Q3 2014. Operating expenses were also up, however, with a 14.2 percent increase from SG$195.2 million last year to SG$223 million this year.

M1 CEO Karen Kooi Lee Wah attributed the company's overall growth in net profit to increased handset sales and fibre customer base.

Both fixed services and handset sales leapt, the former by 20.6 percent from SG$17.9 million to SG$21.6 million, and the latter by a significant 68.8 percent, from SG$43.3 million to SG$73 million.

"We will continue to innovate and invest to further enhance our value propositions and customer experience," said Kooi in a statement.

The company's mobile segment fell by 0.8 percent year on year, however, from SG$167.5 million to SG$166.2 million, which also marked a 0.3 percent drop from the previous quarter. International call services also dropped, from SG$21.5 million in Q3 2014 down to SG$16.7 million in Q3 2015, a decrease of 22.1 percent year on year.

Post-paid monthly churn remained flat, at 1 percent, with the telco adding 11,000 post-paid customers during the quarter to a total of 1.18 million customers. Prepaid customers declined by 0.5 percent since last quarter and 6 percent since Q3 2014, down to just 711,000 -- a loss of 45,000 customers over the past year.

The fibre customer base jumped by 22,000 over the year, up 22.4 percent since Q3 2014, to a total of 120,000 customers.

In total, M1's customer base numbered just over 2 million as of September 30, having added 14,000 over the quarter and 10,000 over the year.

The telco had a mobile market share of 24.5 percent for post-paid and 21 percent for prepaid, and a mobile penetration rate of 148.9 percent -- a drop from last year's 149.1 percent.

Average revenue per user (ARPU) for post-paid fell by 3.1 percent year on year, from SG$55.20 to SG$53.50, and prepaid decreased by 7 percent, from SG$15.70 to SG$14.60.

ARPU for its fibre service increased by 5.1 percent, from SG$45 to SG$47.30.

The telco revealed that average post-paid smartphone data usage grew from 2.9GB to 3.3GB per month year on year.

In July, M1 had announced a net profit after tax of SG$90 million for the first half of 2015, EBITDA of SG$166.9 million, and growth in handset sales, fixed services, and its fibre customer base.

"With our appointment as key sub-contractor for NetLink Trust and an expanded range of cloud-based solutions, we are better placed to service our corporate customers. We will continue to build on this momentum and grow our share in this segment," Kooi said at the time.

In 2014, while the company gained approximately 19,000 new post-paid customers for its mobile service, it lost around 276,000 prepaid customers as a consequence of regulatory changes that came into effect in April 2014. This resulted in its overall customer base being driven down by 12.2 percent.

In a bid to reverse its trend of losing more prepaid customers every quarter, the telco last week began offering data roaming at no extra cost for customers travelling to Indonesia and Malaysia.

The two prepaid options are priced at SG$5 for 1GB of data to use over three days, or SG$30 for 3GB, which expires after 50 days. Customers can then dip into their allowances in Indonesia and Malaysia at no extra charge, using the Celcom network in Malaysia and the XL Axiata network in Indonesia.

"Many Singaporeans travel regularly to our neighbouring countries for work, to do some shopping, and enjoy other leisure activities, and we want to give them the convenience of using the same mobile line wherever they are," M1 chief marketing officer P Subramaniam said.

According to a recent report by OpenSignal, which calculates "time coverage" -- the amount of time a customer's phone spends actually connected to a 4G network -- M1 is ranked 12th in the world, providing 4G coverage to 86 percent of the Singaporean population. Rival Singtel is ranked ninth, providing 88 percent coverage.

In terms of speeds, the OpenSignal report pointed towards Singapore's second-largest telco StarHub being the fastest in the world, with average download speeds of 38Mbps. Singtel and M1 followed in fifth and sixth place, with 32Mbps and 30Mbps average download speeds, respectively.