Singapore’s M1 reports sharp fall in 2016 net profit

25 Jan 2017

Singapore’s smallest telecoms operator by subscribers and revenue, M1 Limited (M1), has released its financial results for the year ending 31 December 2016, showing that net income slumped 16.1% year-on-year amid turbulent changes in the local market and the impending arrival of a fourth telco. The company booked net profit of SGD149.7 million (USD105.6 million), down from SGD178.5 million in 2015, impacted by lower international voice and roaming revenues, weakening demand for retail traffic and lower handset sales. Revenue slipped 8.3% y-o-y to SGD1.06 billion, it said, as the company reflected on what it terms a challenging time for the industry – a situation it expects to continue for at least the next few quarters. Turnover derived from mobile declined 4.2% on an annualised basis to SGD460 million, while international call services plummeted 10.8% to SGD61 million and handset sales plunged 23.7% to SGD255 million. The only bright light was reported from M1’s fixed operations where, buoyed by strong take-up for fibre broadband, revenues climbed an impressive 21.4% y-o-y to SGD104 million; net fibre broadband connections climbed 32,000 to 160,000 at end-2016. Nevertheless, mobile continues to be the main contributor to sales and M1 continues to grow its base, fuelled by demand for mobile data. It reported net additions of 52,000 post-paid and 39,000 pre-paid customers, boosting the total to 2.02 million, and noting that average smartphone data usage in 4Q16 increased to 3.6GB per month from 3.3GB in the corresponding year-ago quarter. Indeed, data now accounts for 54.0% of total mobile revenues it said, up from 46.3% in FY2015.

In her conference call, M1 CEO Ms Karen Kooi said: ‘It has been a challenging year in 2016, with increased competitive activity. Our traditional telco revenue continued to be impacted by over-the-top services but we are growing in mobile data and strongly in fixed services’. The CEO went on to point out that M1’s FY2016 results reflect a ‘transitional phase’ for the city-state’s telecoms market. ‘While there are challenges and uncertainty in 2017, we will continue with the transformation to a smart communications provider through strengthening out telco core, digital capabilities and enhancing our operational structure,’ she added. Looking ahead, Ms Kooi is quoted as saying that the telco will continue ‘to invest and innovate to enhance the company’s service offerings, and capitalise on new opportunities in the digital economy such as solutions for smart nation and Internet of Things [IoT] services’.

Singapore, M1