M1 (formerly: MobileOne)

The update of IDA on number of user for fibre network, ~9k increment on Jan 2012

http://www.ida.gov.sg/Publications/20120402113400.aspx

M1 Q1 result on 16 April which is on next Monday

http://info.sgx.com/webcorannc.nsf/Annou...endocument

What to be expected from the Q1 report?

Fixed Service Revenue will continue to provide growth to M1 biz. IDA 2012/Q1 report on fiber user is yet to be published, but it is logical to assume the momentum will sustain. Additional fiber user is estimated to reach approx 120k by end of Q1/2012. With the current competition, M1 should be able to capture approx at least 10k new fixed service customers, it will translate to revenue of approx 12 mils, increase significantly compare with 7 mils in Q1/2011.

Q1 is normally a slower quarter, mobile and international call service will remain stable and usual growth.

In summary, expecting service revenue approx 190 mils, and net profit approx 43-44 mils, which translate to EPS of approx 48 cts

Looking forward to the M1 report next week....

YMMV

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(12-04-2012, 11:12 AM)CityFarmer Wrote: M1 Q1 result on 16 April which is on next Monday

http://info.sgx.com/webcorannc.nsf/Annou...endocument

What to be expected from the Q1 report?

Fixed Service Revenue will continue to provide growth to M1 biz. IDA 2012/Q1 report on fiber user is yet to be published, but it is logical to assume the momentum will sustain. Additional fiber user is estimated to reach approx 120k by end of Q1/2012. With the current competition, M1 should be able to capture approx at least 10k new fixed service customers, it will translate to revenue of approx 12 mils, increase significantly compare with 7 mils in Q1/2011.

Q1 is normally a slower quarter, mobile and international call service will remain stable and usual growth.

In summary, expecting service revenue approx 190 mils, and net profit approx 43-44 mils, which translate to EPS of approx 4.8 cts

Looking forward to the M1 report next week....

YMMV

Correction above, a typo...

(30-03-2012, 11:18 AM)CityFarmer Wrote: It seem that M1 will build-up another service revenue stream in 5 years beside mobile and internation call.

(30-03-2012, 11:18 AM)CityFarmer Wrote: Please feel free to comment/feedback on my projection above

The fiber is to replace the xDSL and dial-up (I wonder who are still tied to this). Therefore the increase in fiber revenue should offset against the decrease in xDSL revenue. In fact, M1 has already issued notices for current users to migrate to fiber at an offer price while they terminate their xDSL service.

A more certain beneficiary for higher NGNBN take up rate is the NetCo, and perhaps the OpCo as well, due to their monopoly positions.

I paid $39 for a 100mbps to M1. A large proportion goes to paying the OpCo ($21). OpCo in turn pays the NetCo $15 for the passive network. The higher the bandwidth, the better the margin for the RSPs. But RSPs have to "compete" among themselves. So far so good for M1, as the other 2 have taken up the more lucrative roles. Starhub runs the OpCo (now) while Singtel has a stake in the NetCo.

And so I thought, why not have a stake in the NetCo? How much is the NetCo worth if we do a DCF for the 25 year concession based on conservative take up rate? Out of the 4 shareholders, 3 are listed. The market cap of SPH and Singtel is $6bn and $49bn respectively, i.e. the needle won't move much, if at all. The smallest shareholder (by market cap) owns 30% of the NetCo but has a market cap of about $120m despite the stock gaining >50% in the last 6 mth. (Btw, this was my stock idea for 2011. Good luck!)

(12-04-2012, 12:42 PM)cif5000 Wrote: And so I thought, why not have a stake in the NetCo? How much is the NetCo worth if we do a DCF for the 25 year concession based on conservative take up rate? Out of the 4 shareholders, 3 are listed. The market cap of SPH and Singtel is $6bn and $49bn respectively, i.e. the needle won't move much, if at all. The smallest shareholder (by market cap) owns 30% of the NetCo but has a market cap of about $120m despite the stock gaining >50% in the last 6 mth. (Btw, this was my stock idea for 2011. Good luck!)

Hey! That's an interesting idea! You buy Canadian stocks from your existing local Brokerage or do you need to open another account (either US / Canadian)?

is it that or sp telecommunication

Axia NetMedia Corp. Can be bought via US OTC market, ticker AXANF.

(12-04-2012, 12:42 PM)cif5000 Wrote: I paid $39 for a 100mbps to M1. A large proportion goes to paying the OpCo ($21). OpCo in turn pays the NetCo $15 for the passive network. The higher the bandwidth, the better the margin for the RSPs. But RSPs have to "compete" among themselves. So far so good for M1, as the other 2 have taken up the more lucrative roles. Starhub runs the OpCo (now) while Singtel has a stake in the NetCo.

IMHO

Out of the wholesale cost of S$21, OpCo get S$6 while NetCo get S$15. For M1 of S$39 promotion, M1 get S$18 out of the package, plus extra S$ from value-added service M1 can offer.

NetCo and OpCo is monopoly at the moment. NetCo should be continue to be monopoly due to high infrastructure cost involve. OpCo may not be the case, although only one OpCo (Nucleus Connect) is selected. Pardon me if i miss that the Nucleus Connect had obtain exclusive contract.

NetCo get more due to high infrastructure cost, need to recover the capital expense, although with 750 mils grant from gov. So it deserve the S$15. OpCo provide back-end level 2/3 service, no high infrastructure cost needed, so get only $6.

The opinion that i am trying to convey is M1 as RSP is able to benefit substantial from it, with minimum or no capital expense, and potential extra profit if it manage to promote value-added services. Of course, i agree M1 need to compete with other RSPs to achieve that

vested in M1

(12-04-2012, 11:12 AM)CityFarmer Wrote: M1 should be able to capture approx at least 10k new fixed service customers, it will translate to revenue of approx 12 mils, increase significantly compare with 7 mils in Q1/2011.

Q1 is normally a slower quarter, mobile and international call service will remain stable and usual growth.

In summary, expecting service revenue approx 190 mils, and net profit approx 43-44 mils, which translate to EPS of approx 48 cts

The result of M1 is fall within expectation, except on the net profit and EBITDA margin fall un-expectedly

Fixed Service is 11.8 Mils vs 12 Mils forecasted. The number of Fixed Service user is not published, but should be slightly less than 55k base on the wholesale cost.

Mobile revenue is higher, but international call revenue fall short of 2 Mils as expected. Total service revenue is ~192 Mils which is higher.

Net Margin fall 2% from my expectation i.e. ~40 Mils vs 43-44 Mils expected. Dig in more into the FR and look into the expense, it say

"Operating expenses for 1Q12 increased 3.3% against 1Q11, mainly attributed to higher cost of sales, staff costs and facilities expenses."

cost of sales exc handset cost look healthy except the "other cost". FR stated that

"Other costs at $23.2m was 17.8%
higher YoY mainly due to higher connections through our dealers."

Not quite understand, will find out more.

On top of that, handset sales continue to drag down the overall profit. One of the expectation is handset sales loses will improve with better product mix in M1 offering.

Let's see we can get better performance in Q2.. patience and patience..

(09-04-2012, 04:54 PM)CityFarmer Wrote: The update of IDA on number of user for fibre network, ~9k increment on Jan 2012

http://www.ida.gov.sg/Publications/20120402113400.aspx

Another update of IDA on Feb 2012 on the same link. ~9k increment on Feb 2012 for fiber user

Let take a close look and consider Oct 2011 - Feb 2012

DSL + Cable user down by ~46K
Fiber user up by ~50K

So the trend is consistent, but still slower than my forecast of 11k/month. It seem OpenNet efficiency getting worse rather than improving

Kim Eng latest report on M1

M1 - Gaining greater clarity (Buy, TP $2.85)
http://www.kimengresearch.com.sg/Downloa...0412M1.pdf

The growth story of M1 begin with the Fixed Service user and revenue reaches a critical mass. It is much slower now then originally expected.

IMHO, The critical mass of > 100k user and > 100 Mils for Fixed Service required, before any meaningful launching of "value-add" services by M1.

YMMV