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Where to Next for M1 Ltd?

M1 Ltd (SGX: B2F) is finding itself in a bit of a pickle.

Firstly, the telco’s major shareholders, namely Keppel Corporation Limited  (SGX: BN4), Singapore Press Holdings Limited (SGX: T39), and the Malaysia-based telco Axiata Group Berhad (KLSE: 6888.KL) threw in the towel in trying to sell their stake. Then, M1 lowered dividends by 25% in its second-quarter earnings.

With all that’s happening, it begs the question – where M1 is headed next?

Opportunities on the horizon

We can look to its latest earnings briefing for clues.

Source: M1’s earnings presentation

In our previous article, we have looked at the challenges that M1 is facing. Let’s switch gears and look at its future as well.

M1’s Chief Financial Officer and Chief Commercial Officer, Lee Kok Chew, believes that the digital transition will present opportunities for M1:

“The nationwide narrowband IoT [internet of things] network, to be launched in third quarter 2017, will drive new and innovative IoT applications with its robust penetration, low power consumption and network security features.

We are investing in digital solutions and developing new ICT [information and communication technology] and cloud-based solutions to generate new revenue streams.”

And there is more…

Source: M1’s earnings presentation

Lee also spoke about opportunities in the enterprise space:

“We are moving up the value chain with integrated solutions to better serve the corporate segment. This will include managed infrastructure services, cyber security, applications and business solutions as well as analytics.

We have been piloting new digital solutions in readiness for smart nation initiatives. Our interactive info-display solution include panels that analyze detailed consumer profiles and demographics to profile customer life information.

Unified analytics screen together data from multiple sources including cellular, Wi-Fi and video, both macro and micro impact.

Meters and sensors are becoming intelligent to capture realtime information for analysis.”

To be sure, the new initiatives will take time to achieve scale. Lee added:

“For 2017, the operating environment remains challenging and adoption of new services will take time to reach meaningful scale.

While we are positioned for growth, continuous performance will still be under pressure.”

With that, we can expect M1’s results to continue to be under pressure until the initiatives bear fruit.

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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.