M1 Ltd (SGX: B2F) is one of the cool companies in Singapore which shares webcasts and/or transcripts of their earnings presentations (the link for M1 is here).
As the smallest among 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 through four business segments: mobile services; fixed services; international services; and handset sales. The first three are collectively known as M1?s services revenue.
You can read more about M1 in here.
Below are seven useful things I learned from listening to M1?s second-quarter webcast:
On the mobile services segment, Chief Commercial Officer Lee…
As the smallest among 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 through four business segments: mobile services; fixed services; international services; and handset sales. The first three are collectively known as M1’s services revenue.
You can read more about M1 in here.
Below are seven useful things I learned from listening to M1’s second-quarter webcast:
- On the mobile services segment, Chief Commercial Officer Lee Kok Chew highlighted that M1’s mobile customer base grew by 13,000 quarter-on-quarter to 1.88 million. Most of the growth came from its post-paid customer base, which expanded by 12,000 customers. This is the same amount of postpaid customers added by Starhub over the same period.
- Mobile data is increasingly important for M1. During the reporting quarter, mobile data made up 44.9% of its services revenue. This figure is up compared to the 41.9% recorded in the first-quarter of 2015. Along with it, Lee also said that 23% of M1’s customers exceeded their data bundle for the quarter. Responding to a question from an analyst on this mobile data trend, Chief Executive Officer Karen Kooi said that it’s still too early to predict how this trend will play out, including whether voice-over-IP (currently offered by the likes of Facebook Inc owned Whatsapp) will catch on.
- Elsewhere, Lee added that M1’s fiber customer base grew by 6,000 quarter-on quarter-to clock in at 114,000 for the reporting quarter. Chief Financial Officer Raymond Yeo added that the contribution of the fixed services segment (which includes fiber connections) has grown to make up 10% of M1’s services revenue.
- Lee also shared two of M1’s initiatives for the future: A Point of Sale solution and the M1 Data Passport service which enables customers to use their existing data bundles for roaming overseas. Earlier last month, M1 also announced a deal with Liberty Wireless to offer a new mobile virtual network operator (MVNO) service to postpaid customers in Singapore.
- When asked about the IDA’s (Infocomm Development Authority) proposal to offer discounts to new license bidders who are keen to enter Singapore’s telco scene, Kooi said that the 60% discount was for the reserve price, a figure that could still go up if there is more than one bidder. Kooi also said that new entrants will need significant investments in networks for a full nationwide rollout.
- Speaking on differentiating factors in the mobile space, Kooi expressed her belief that Singaporean customers will be discerning on the quality of service and total customer experience and may be willing to pay up for premium services. The notion of quality of service as a differentiating factor was challenged by Amit Choudhury (from the Business Times), but Kooi defended her position by citing BMW and Mercedes as examples of car companies that earn a premium in the automobile market.
- An analyst also pointed out that international call revenues have been declining and asked management for their views on when that revenue may bottom-out. For the second-quarter, international retail minutes plunged 29.3% year-on-year from 291 million minutes to 206 million minutes; subsequently, quarterly revenue shrank from $24 million a year ago to $17 million in the reporting quarter. Chief Marketing Officer Poopalasingam Subra acknowledged the fall, but said that there was a slower rate of decline and that data usage is picking up.
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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.