4 Quick Things Investors Should Learn About M1 Ltd

M1 Ltd (SGX: B2F) is one of the cool companies in Singapore which shares webcasts of their quarterly earnings presentations (the link to M1’s webcast is here).

As one of the big trio in the telecommunications industry in Singapore – the others being Singapore Telecommunications Limited (SGX: Z74) and StarHub Ltd (SGX: CC3) – M1 makes its money from providing mobile services, international calls, handset sales, and fixed services.

You can read more about M1 here.

Below are four useful (additional) things I learned from listening to M1’s latest fourth quarter earnings presentation webcast:

  1. On the mobile services segment, Chief Marketing Officer Poopalasingam Subra commented that M1 is starting to see positive net adds to its prepaid base after the impact of a regulatory change in 2014. That said, there was still a 28% year-on-year decline in the prepaid customer base for the fourth quarter of 2014. Revenue from postpaid customers increased by 5.9% due to increased data usage. Chief Executive Officer Karen Kooi sees a potential slowdown in future data usage, but noted that the percentage of M1’s customer base who exceeded their data bundle has increased from 14% to 22% in two years.
  2. M1 sees itself with a 23.1% mobile market share as of October 2014, a decline from 25.1% in the fourth quarter of 2014. When questioned on the higher customer acquisition cost but lower market share, Kooi commented that M1 is looking to balance profitability with market share. Furthermore, the new form factor for the better subsidized iPhones lead to a larger proportion of iPhones sold versus non-iPhones. This shift in product mix coupled with the seasonality of the fourth quarter led to higher customer acquisition costs. The absolute subsidy amount for each iPhone unit sold was actually lower.
  3. Kooi also noted that the mobile market is 150% penetrated and M1 will be focusing more on retention. The churn rate (rate of customers leaving) in 2014 was 1.1%.
  4. For its planned capital expenditures of $120 million in 2015, M1 is committed to being selective on building out its fibre network. This amount will be lower than the $140 million in capital expenditures that M1 had spent in 2014.

Foolish takeaway

To buy and hold a company’s shares for the long term also means keeping up with developments in the company.

The access to management teams via webcasts gives the Foolish investor a fair chance to judge for themselves whether they would like to be invested alongside those management teams. It also helps us put together a more complete thesis around a company and keep up with developments in its industry.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.