4 Quick Things Investors Should Learn About M1 Ltd

M1 Ltd (SGX: B2F) is one of the cool companies in Singapore that shares webcasts and/or transcripts of their earnings presentations.

There may be useful and important information that investors can learn from the webcasts and transcripts. Last week, M1 had released its earnings for its fiscal first-quarter (the three months ended 31 March 2016). I had spent some time going through the transcript for that particular earnings conference call and came away with four things that may be important for investors to note.

But before I share them, here’s a quick background of M1 for context.

M1 is the smallest among the trio of companies in Singapore that provide telecommunications services (the other two are Singapore Telecommunications Limited (SGX: Z74) and StarHub Ltd (SGX:CC3)). M1 has four business segments, namely, Mobile services, Fixed services, International Call services, and Handset sales; the first three are collectively known as Services revenue.

With that, here are my notes:

  1. Chief Marketing Officer Poopalasingam Subramaniam said that M1’s postpaid revenue fell due to lower roaming revenue. The new SIM-only plans M1 had introduced had a dilutive impact on ARPU (average revenue per user), which fell from $62 a year ago to $58.60 in the reporting quarter.
  2. Chief Commercial Officer Lee Kok Chew shared a few of M1’s initiatives in retaining customers. Efforts include SIM-only plans, upsizing data bundles, and increasing coverage of the Data Passport countries.
  3. On capex (capital expenditure) spending this year, Lee said that there will be a payment of $64 million in 2016. This is for an earlier spectrum auction. M1 has guided for total capital expenditure of $140m for the whole of 2016, but this excludes the upcoming spectrum auction.
  4. M1 will no longer provide light content. Lee said that the arrival of Netflix and other OTT services is a positive for M1. The telco is focused on enabling access to this content and optimizing the viewing experience.

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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 owns shares in Netflix.