M1 (formerly: MobileOne)

Neat writeup from DB on Consistel:

Consistel views Singapore telecom market is ripe for disruption
Consistel is vying to become the 4th telecom operator in Singapore. It has recently signed an agreement with SMRT (BUY, TP S$2.32), has an option to invest S$34.5m in its venture (OMGTEL) subject to the venture obtaining a telecom license. We note MyRepublic, currently a fibre broadband player in Singapore has also announced its intention to bid for spectrum in upcoming auctions to secure a telecom license.

Conference call notes
■ Management track record – Consistel Chairman & CEO Masoud Bassiri highlighted a track record which spans rolling out networks across Asia and Africa, claiming around 22 network builds and 3000 in-building systems. He has previously worked at Motorola and Nortel and claims to have 10 patents to his name.

■ Software – Consistel believes its software (Atrium) is a key competitive advantage. It can automatically configure a network based on inputs on building configurations, traffic distribution, required network KPIs and financial data etc. A US patent search shows that Consistel has been awarded a patent for such a system on Mar 12,2015 (Pub No. US 2015/0073845). Consistel believes this avoids the current method of live trials which is costly and time-consuming.

■ Network size and capex – Consistel estimates a commercial launch will require 1250 base stations and 700 indoor sites, which they view as a relatively easy endeavor. He notes 40% of traffic (largely data) is generated indoors, an area of expertise for Consistel. It expects a buildout cost of S$750-1bn for a competitive network. For comparison, we note that M1’s cumulative capex till date is around S$1.5bn.

■ SMRT alliance – Consistel would aim to leverage the consumer touch points which SMRT can provide through its operations of rail and bus networks carrying 3m commuters.

■ Spectrum – Consistel would like to get spectrum in both sub-1Ghz and high-frequency bands. However, it is currently targeting 2.3Ghz spectrum. We note the incumbent’s licenses for 900Mhz spectrum expire in Mar/17 and hence an auction is likely in 2016.

with the 4th telco coming in, will this erode M1's market share and earnings?

Let me contribute base on what I know on M1, and SGP telecom market.

(28-04-2015, 09:29 PM)AQ. Wrote: ■ Software – Consistel believes its software (Atrium) is a key competitive advantage. It can automatically configure a network based on inputs on building configurations, traffic distribution, required network KPIs and financial data etc. A US patent search shows that Consistel has been awarded a patent for such a system on Mar 12,2015 (Pub No. US 2015/0073845). Consistel believes this avoids the current method of live trials which is costly and time-consuming.

Using Big-Data tech on network reconfiguration isn't new. The issue may lie on IDA definition of national coverage. IIRC, Starhub and M1 have already started exploring Big-Data tech, but no further progress. The technology is available from major telecom vendors as well, there is no clear advantages to own the technology by telcos, IMO

(28-04-2015, 09:29 PM)AQ. Wrote: ■ Network size and capex – Consistel estimates a commercial launch will require 1250 base stations and 700 indoor sites, which they view as a relatively easy endeavor. He notes 40% of traffic (largely data) is generated indoors, an area of expertise for Consistel. It expects a buildout cost of S$750-1bn for a competitive network. For comparison, we note that M1’s cumulative capex till date is around S$1.5bn.

Easy? M1 took years to achieve the national coverage, may be easier for 4G deployment. The M1 capex number is correct.

(28-04-2015, 09:29 PM)AQ. Wrote: ■ SMRT alliance – Consistel would aim to leverage the consumer touch points which SMRT can provide through its operations of rail and bus networks carrying 3m commuters.

■ Spectrum – Consistel would like to get spectrum in both sub-1Ghz and high-frequency bands. However, it is currently targeting 2.3Ghz spectrum. We note the incumbent’s licenses for 900Mhz spectrum expire in Mar/17 and hence an auction is likely in 2016.

The partnership with SMRT, may be a key edge to success. A quick ramp up of user base, is a key to success.

sometimes i am wonder if pie is big enough for a fourth player...

hm... I feel that if the 4th telco takes say 10% market share still ok ba

say the other 4 telcos, their current share is 40-30-30 (I don't know the exact numbers.. just guessing here)

each lose 10% to give to the new telco

become say 36-27-27-10 like that

at worst case its only a 10% drop in earnings....... and it will probably take 2-3 years for that to happen

best case is for the 4th telco to fail and exit after 1 year

I'm just guessing here, don't have any data to back it up

cheers

M1 first venture abroad...

(vested)

M1 takes 15% stake in Integrated Telecommunications Oman

SINGAPORE (May 7): M1 will take a 15% stake in Integrated Telecommunications Oman, a reseller of mobile services in the Middle Eastern state under the brand Telecom Oman (TeO).

The company will pay $10.3 million for the stake, and intends to help develop TeO into a full-service telco in Oman, it said in a statement.
...
http://www.theedgemarkets.com/sg/article...tions-oman

Its a really small dip into foreign waters.

S$10m for the 15% stake. That's c. 10% of FCF, or about 5% of last year’s dividend payment

(07-05-2015, 10:05 AM)CityFarmer Wrote: M1 first venture abroad...

(vested)

M1 takes 15% stake in Integrated Telecommunications Oman

SINGAPORE (May 7): M1 will take a 15% stake in Integrated Telecommunications Oman, a reseller of mobile services in the Middle Eastern state under the brand Telecom Oman (TeO).

The company will pay $10.3 million for the stake, and intends to help develop TeO into a full-service telco in Oman, it said in a statement.
...
http://www.theedgemarkets.com/sg/article...tions-oman

guessing china telecom as the 4th player?

Analyst view on the venture...

M1's investment in Oman not 'very exciting', says DBS Vickers

SINGAPORE (May 7): M1's decision to take a 15% stake in Integrated Telecommunications Oman is a surprise given that the mobile market in the Middle Eastern state is small and saturated, says DBS Vickers.

Oman, with a population of 3.2 million people, has a mobile penetration rate of more than 190%, and may not offer much growth potential, according to DBS Vickers analyst Sachin Mittal.
...
http://www.theedgemarkets.com/sg/article...bs-vickers

(30-04-2015, 10:24 AM)Happymeowmeow Wrote: hm... I feel that if the 4th telco takes say 10% market share still ok ba

say the other 4 telcos, their current share is 40-30-30 (I don't know the exact numbers.. just guessing here)

each lose 10% to give to the new telco

become say 36-27-27-10 like that

at worst case its only a 10% drop in earnings....... and it will probably take 2-3 years for that to happen

best case is for the 4th telco to fail and exit after 1 year

I'm just guessing here, don't have any data to back it up

cheers

Providing the market shares, for post paid mobile segment, Singtel has 48% share, Starhub 27% and M1 25%.

From 2011 to 2014, M1 lost 1% share, which was split equally between Singtel and Starhub

In pre paid segment, M1 has 22% share, Singtel 52% and Starhub 26%.

From 2011 to 2014, m1 lost 4% market share, while Starhub lost 4%, Singtel gained 8% market share.