M1 (formerly: MobileOne)

[CityFarmer]

Hi CF,

My thoughts on the matter is like this. While there is some creative packaging of various mobile plans, such as data only plan, or plans without contract and handset, the pricing has hardly "fallen" to deter competitors. Even if there is such intention, with the announcement of 3 potential entrants, we can safely say the intent has failed.

Declaring interest, is not cost much, but participating in the auction, is real with vested capital. I am yet to see the result of pre-qualification, which involves capital commitments. Let's see.

Textbook theory tells us newcomer will compete on price first, before a new equilibrium is reached. While there is reports about a different business models, I believe the price war is first and foremost salvo fire D and then the 4th player will try to building their niche market, both at the same time.

But I do agree fall in ARPU need to be look at totality. Given m1 do not give detailed breakdown of ARPU, it could be due to the falling international line revenue that is going obsolete anyway. The qn is whether the Coporate space and Broadband business's continue to grow to offset it?

All said, fundementals is but one of the equation, we need to look at valuation too

M1 gives detail on ARPU, in its presentation slides.

Textbook, tells, it is either mass market or niche market. It is very unlikely mass market first, then re-focus to niche market, IMO.

I reckon, focus on niche market, seems the likely model, as highlighted by MR. A mass price war is unlikely, in the competition for the niche, IMO. Let's see...

(vested)

[TUBInvesting]

Did a write up on the business of M1.

Just trying to give others a different perspective of M1's business.

At the end of the day, its not down and out. M1 is still a solid stock!

http://tubinvesting.blogspot.sg/2016/11/...ctive.html

<vested>

[Sampling]

Did a write up on the business of M1.

Just trying to give others a different perspective of M1's business.

At the end of the day, its not down and out. M1 is still a solid stock!

http://tubinvesting.blogspot.sg/2016/11/...ctive.html

<vested>

Solid or not if they operate in a challenging environment it'll of course be challenging...

Just like a once solid stock (Keppel), when they go through a storm, it'll of course experience what a company that goes through a storm will experience.

Would an investor be better off riding the storm with such companies or will it be better to look for other better opportunities ?

[TUBInvesting]

Did a write up on the business of M1.

Just trying to give others a different perspective of M1's business.

At the end of the day, its not down and out. M1 is still a solid stock!

http://tubinvesting.blogspot.sg/2016/11/...ctive.html

<vested>

Solid or not if they operate in a challenging environment it'll of course be challenging...

Just like a once solid stock (Keppel), when they go through a storm, it'll of course experience what a company that goes through a storm will experience.

Would an investor be better off riding the storm with such companies or will it be better to look for other better opportunities ?

Hmm... just in my opinion, it is one of the better opportunities out there currently.

For other Blue Chips, they have not reach M1's level of being label as valued and has a consistent but nevertheless challenging environment.

Data is still required and I believe M1 is on the right track.

However, if you are looking at opportunities among the non-blue chips, then there may be plenty that is better than M1 right now.

<vested>

http://tubinvesting.blogspot.sg/

[cyclone]

Two firms in race to be Singapore's fourth telco

MyRepublic and Australia's TPG Telecom will take part in new entrant spectrum auction later this year; third prospective entrant airYotta doesn't meet pre-qualification criteria

AFTER months of speculation, it's final. Singapore will get a fourth telco next year and it will be a two-horse race between local broadband services provider MyRepublic and Australian telecom services provider TPG Telecom.

More detials in http://www.businesstimes.com.sg/companie...urth-telco

[funman168]

Did a write up on the business of M1.

Just trying to give others a different perspective of M1's business.

At the end of the day, its not down and out. M1 is still a solid stock!

http://tubinvesting.blogspot.sg/2016/11/...ctive.html

<vested>

Solid or not if they operate in a challenging environment it'll of course be challenging...

Just like a once solid stock (Keppel), when they go through a storm, it'll of course experience what a company that goes through a storm will experience.

Would an investor be better off riding the storm with such companies or will it be better to look for other better opportunities ?

What are the other blue chips to look at? Now sgp blue chips all seems to be in a storm.

[ZZF]

going through structural change. surely most will sell first and think later.
 this is fundamental change in biz.

still early to buy. imo.

[funman168]

With sgp going into recession, maybe it is better to start shorting stocks instead of trying to buy & get into value traps.

[CY09]

M1 is viewed as a dividend stock to many; and the sustainability of M1's dividends are in its cash flows.

The first hit to its cashflow is evident by the fall in revenue which has trickled to its operating cash flow generation ability (-10%). On the contraray, specturm payments has not decreased 10% and remained the same. This simply means a fall in free cash flow. The establishment of the 4th teleco is going to be another black swan.

Secondly, like many "well-managed" SGX company, M1 has taken advantage of the low interest environment to grow its debts. Debts has grown 34% since the end of FY11. With impending rising rates, M1 will be faced with a rising interest expense. Revenue wise, M1 has not grown much since FY 11 (FY11 revenue: 1,064Mil vs 9MFY16 Rev: 747 Mil).

Lets look at its cashflow: Using 9MFY16 to extrapolate( i am being generous here as the first 6 months included the more expensive phone plans; 3Q was about 75mil), M1 op cash flow generation (before WC) is about 315mil annualy. Assuming fixed assets purchase stays at 133 mil (same as FY15) and, income tax of about 35mil and interest expense of 2% on its 400mil debt (8mil), Free cash flow is about 135 mil. That means if banks are generous enough to keep rolling the principal without asking M1 to pay it down and M1 pays out 100% of cash, shareholders are entitled to 14.55 cents dividends. This is below the 15.3 cents M1 paid in FY15 (last year payout ratio was 86%) .

With such a significant amount of debt, I hope M1 will consider setting aside 15 mil annually to repay principal. So shareholders will get about 12.5 cents dividend. Just agar from there how much will you pay for 12.5 div in an environment of rising interest rates and impending competition of a 4th teleco (which may weaken its cash flow ability)

[money]

i dont think m1 will bother to repay principal. They are trying their best to maintain dividend to avoid shareholder's unhappiness. The 4th telco will most possibly decrease profits of singtel, starhub and m1, i am not sure by how much but it is not a wise idea to pretend that there is no impact on earnings and consequently dividends