M1 Ltd (SGX: B2F) is one of the cool companies in Singapore that shares webcasts of their quarterly earnings presentations (the link for M1 is here). As one of the big trio in Singapore’s telecommunications industry – the others being Singapore Telecommunications Limited (SGX: ZY4) and StarHub Ltd (SGX: CC3) – M1 makes its money from mobile services, international call, handset sales, and fixed services. You can read more about M1 here. Questions on slowdown Below are eight useful things I learned from listening to M1’s latest fiscal first-quarter webcast: On the mobile services segment, Chief Commercial Officer Lee Kok Chew highlighted that M1’s mobile customer base…
As one of the big trio in Singapore’s telecommunications industry – the others being Singapore Telecommunications Limited (SGX: ZY4) and StarHub Ltd (SGX: CC3) – M1 makes its money from mobile services, international call, handset sales, and fixed services.
You can read more about M1 here.
Questions on slowdown
Below are eight useful things I learned from listening to M1’s latest fiscal first-quarter webcast:
- On the mobile services segment, Chief Commercial Officer Lee Kok Chew highlighted that M1’s mobile customer base grew by 18,000 quarter on quarter to 1.87 million. Interestingly, its prepaid base had increased by 10,000 quarter on quarter, unlike rival Starhub, which did not see much growth in the prepaid space over the same period. That said, Starhub displayed more growth in it postpaid customer base (an increase of 24,000 users) compared to the 8,000 new postpaid users that M1 added on a quarter on quarter basis.
- On a question about the slowdown in mobile customer additions, Lee felt that the net adds in mobile customers will be lower compared to five to ten years ago due to lower population growth. Chief Executive Officer Karen Kooi added that M1 is looking for value accretive customers to balance between market share and profitability.
- As mentioned in an earlier article I penned on M1’s earnings release, the company saw its mobile market share (including postpaid & prepaid subscribers) shrinking from 25% a year ago to 22.8%. When asked on this topic, Chief Marketing Officer Poopalasingam Subra responded by saying that there was competition from shared plans. The competition is likely to be from Starhub.
- When asked about the potential entry of a fourth telco into the mobile space, Lee responded by saying that there is limited spectrum availability and that the mobile space is already mature and competitive. M1 considers the fourth entrant to be a “factor” in their future plans.
- Elsewhere, Poopalasingam also highlighted that the 1.6% gain in postpaid revenue was down to increased data usage. Mobile data made up 41.3% of M1’s service revenue (excludes handset sales) for the first quarter of 2015. Poopalasingam also commented that the quarterly average revenue per user (ARPU) for the postpaid space was flat on a year on year basis due to surf share plans and “seasonality”.
- Looking forward, Poopalasingam added that the mobile market in Singapore already has a 148% penetration rate but M1 is looking forward to data SIMs and M2M (machine to machine) services for postpaid revenue growth.
- M1 was also asked about its plans in the digital space in view of Singtel’s aggressive moves in that area. Kooi responded by saying that M1 is looking to collaborate with internet companies though one has to bear in mind the company’s smaller balance sheet as compared to Singtel’s. M1 intends to participate in the Smart Nation initiative in Singapore and Kooi felt that it is still “very early in the game”.
- Speaking on Pay TV, Lee added that the team felt that the costs outweigh the benefits currently. Kooi commented that M1 will pursue a content-light approach and not fight for premium content.
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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.