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M1 Ltd’s Second-Quarter Earnings Briefing: 3 Quotes to Sum Up Its Growing Fixed Services Business  

M1 Ltd (SGX: B2F) hosted its second-quarter earnings briefing in July.

M1 has four business segments, namely handset sales, fixed services, international call services and mobile services. The last three make up its service revenue. Let’s take a look at what was shared on its fixed services segment.

Small base, big growth

Source: M1’s earnings presentation

M1’s services revenue accounted for 81% of its total revenue in the second-quarter of 2017. In turn, the fixed services segment made up around 15% of the services revenue.

So, the fixed services segment is not a big part of M1’s business. But, it was the only services segment that showed growth in the second-quarter of 2017.

Source: M1’s earnings presentation

M1’s Chief Financial Officer and Chief Commercial Officer, Lee Kok Chew, said:

“Fiber customer base increased 8,000 Q-on-Q [quarter-on-quarter] to 176,000, and fixed revenue grew to 15.2% of service revenue compared to 12.5% a year ago.”

In short, the fixed segment benefited from an increase in customer base. At the moment, the business segment might be small, but it is growing in influence. Let’s look at the average revenue per user (ARPU) next.  

M1’s Chief Marketing Officer, Poopalasingam Subramaniam, said:

“Fiber ARPU for the quarter was $42.70. Quarter-on-quarter, it was slightly lower mainly due to the take-up of mass residential fiber plans.”

ARPU was down 1.6% compared to the previous quarter, and down 5.3% compared to a year ago. Subramaniam said that the competition in the space is intense:

“Fiber market still remains very competitive. It’s several players in the market, and I can’t predict what it will be like with the new players, but it is already very intense competition.”

We will have to see what the next quarter brings for M1’s fixed services segment.

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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.