M1 mulls over IPTV

Singapore mobile operator contemplates revenue potential of offering IPTV services over the island-state's new national broadband network.
Written by Aaron Tan, Contributor

SINGAPORE--Local mobile operator MobileOne (M1) is mulling over including IPTV as part of its services, the company's head honcho revealed yesterday.

Speaking at a briefing on M1's financial results for fiscal 2006, ended Dec. 31, CEO Neil Montefiore said the company is looking to offer IPTV services over Singapore's upcoming national broadband network (NBN).

According to Singapore's telecoms regulator Infocomm Development Authority, the winner of the tender to build the NBN will be announced by this year, after which the project is expected to be completed within five years.

While M1 has not seen the finalized structure of the NBN, Montefiore said it is likely to include a shared-access framework where operators such as M1, can offer broadband content services.

"We will be looking at IPTV and the opportunities it presents," he said. "It's an interesting area because when you look at pay TV, the cost to consumers seems to go up when there's competition."

Last week, the Media Development Authority of Singapore announced a new two-tier IPTV licensing framework and awarded the country's first IPTV license to SingTel, which also operates a mobile arm, SingTel Mobile.

Bring consumer cost down, first
According to Montefiore, there are issues with exclusive pay TV content that need to be addressed globally.

For instance, multiple pay TV operators bidding for exclusive content such as the English Premier League football games, often push up the costs of content acquisition--which are eventually passed on to consumers, he said.

"That to doesn't seem to be the right way to me," Montefiore said.

He added that it is likely that M1 would offer services that allow consumers to access content directly from content providers, a model that may well take root in five to 10 years, he said.

Although M1 recently launched its HSDPA (high speed downlink packet access) service dubbed M1 Broadband, Montefiore admitted that the bandwidth available on such networks is unlikely to support IPTV services.

"Consumers really want to flip through channels but you also need a fair amount of broadband speed to do that," he said. He added that running IPTV over a cellular broadband network is more likely to be feasible, when M1 raises its HSDPA bandwidth from 3.6Mbps to 14.4Mbps by year-end.

According to Montefiore, M1 currently has 10,000 subscribers for its 3G and 3.5G data plans. About 6,000 of them have HSDPA-enabled devices, while the remaining subscribers own 3G devices.

In a bid to shift its revenue mix toward data services, Montefiore said M1 will be launching more compelling Internet content services. Voice services continued to be the industry's cash cow, and helped contribute about 70 percent of M1's total revenues last year.

Montefiore said: "We're seeing more and more people go on to the Internet with the mobile phone." In fact, M1's new content services that are driven by this trend such as blogging and video streaming, are likely to generate advertising revenues by the end of 2007, he noted.

Asked if M1 is feeling the heat as Singapore's sole pure-play mobile operator, flanked by two triple-play telecoms service providers--SingTel and StarHub--Montefiore said: "We are concerned about the impact of bundling.

"Obviously, SingTel has launched a complex bundled product in the market, but there's not much we can do about it," he said: "Because in Singapore, we can't really resell in terms of broadband or pay TV at a profitable rate."

"We will take it up to the regulator to make sure there is no cross-subsidy between [the provision of] monopoly services," Montefiore said.

Last year, M1's after-tax profits increased by 2.2 percent year-on-year to S$164.6 million (US$107.2 million) while free cash-flow rose by a significant 48.5 percent to S$242.7 million (US$158 million). The company has some 1.3 million customers, as of end-2006, where 809,000 are postpaid customers while 528,000 are prepaid customers.

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