M1 (formerly: MobileOne)

[CityFarmer]

I did not find thread on M1, so let me start one since i had done a review on my M1 investment recently

I would like to share my view/comment on the following topic

What is the impact of NGNBN (fiber network) on M1 revenue in the next 5 years?

I refer to http://www.ida.gov.sg/Publications/20110811155135.aspx and M1 2011 AR recently for my analysis

Base on the data, it seem that Fiber uses increases on average 10k/month for the last 5 months in 2011. Would it slow down? probably not since IDA had requested OpenNet to increase installation capacity and Fiber network seem picking up the momentum. I would estimate flat 11k/month for the next 5 years for simplicity. For your information, current user of cable+DSL is ~ 1.2 mils (542200+679300=1221500). Please refer to my projection of total fiber user in next 5 years

2011 2012 2013 2014 2015 2016
98500 230500 362500 494500 626500 758500

The market share of M1 in 2011 is ~45%. It seem M1 have a big share on the market. Let assume over 5 years, on average M1 get 1/3 of the market share, i.e. 34%. The projection of the M1 Fixed Service Customer is below

2011 2012 2013 2014 2015 2016
44000 78370 123250 168130 213010 257890

Assume ARPU of Fix Service remain stable for the 5 years period. I work out the following projection

Fix Service Revenue (S$ mils)
2011 2012 2013 2014 2015 2016
38.3 66.6 104.8 142.9 181.1 219.2

It seem that M1 will build-up another service revenue stream in 5 years beside mobile and internation call. It is sizeable and larger than existing international call service (125 mils).

I do feel that my estimation is conservative, probably can be larger. Am i too optimitic or bias since i am vested?

I am also interested to peek into other new venture M1 can go into, i.e. IPTV and interactive TV service after the Fix Service infrastructure is ready. But i believe it is still in their infancy, i probably not to do anything now beside observing...

Please feel free to comment/feedback on my projection above

[Drizzt]

seems abit optimistic. their dependance on international call is among the highest amongst the 3. as such, they are the ones most likely to be adversly affected by viber and line.

[CityFarmer]

Thanks for the comment, Drizzt

I try to look into my excel sheet, M1 international call revenue is stable for the last 5 years, 120-130 mils. It seem indicated to me, the service revenue does not been impacted by popularity of smartphone recently, i.e the viber application. Anyway I may be wrong...

Any chance to enlight me some point why dependency of international call for m1 is highest among the 3? By % of their total revenue?

[Drizzt]

hi CityFarmer, i have not review M1 for sometime but i do remember that they do not have that much constiuent to their revenue. prepaid postpaid broadband and international calls. % or revenue. hence my sayin they are the most affected.

of course we are not seeing sigificant dwindling but i do expect international calls to be the main problem area cause by voip.

[CityFarmer]

Hi Drizzt,

Yes, you are right, M1 had limited revenue stream previously, but now there is one new revenue stream for Fix Service, my previous post is to estimate the impact of the new revenue stream on M1 total revenue

I am hoping in near future, M1 can provide more services e.g. IPTV etc. I believe this is the same hope for all shareholder... ;-)

I agree voip is an issue for international call service. M1 International call revenue is stable, but their margin may be eroded.

[CityFarmer]

I notice a article in Today, post here for your info

NGNBN take-up rate set to take off if ...

by Thomas Cho

04:45 AM Apr 02, 2012

SINGAPORE - The take-up rate for Singapore's Next Generation Nationwide Broadband Network (NGNBN) is expected to jump higher only after the installation of fibre optic terminal points in buildings and apartments are completed.

This is according to market players in response to news that the sign-up rate by households and companies of the ultra-high speed NGNBN has been below expectations.

NGNBN enables Singaporeans to enjoy a richer broadband experience and allows businesses to use infocomm extensively to boost productivity and competitiveness.

Last month, OpenNet reported that the take-up rate among households jumped to more than 10 per cent compared to only 2 per cent in June last year.

OpenNet is the company that is responsible for the building, managing and operating the NGNBN.

Market players say that the take-up rates among companies and business entities are even slower.

Telecom regulator Infocomm Development Authority of Singapore (IDA) recently revealed that there are currently only 1,300 corporate customers in total on NGNBN.

Fitch Ratings' head of TMT, Mr Steve Durose, said: "The cost of building up a network in many countries, particularly if they are geographically diverse, can be very expensive."

He adds that there is also an aspect of the "willingness to pay in many countries across the region" but he sees this lacking here in Singapore.

Meanwhile, some analysts say the reluctance of some households and companies to sign up is due to the longer-than-expected installation time of these fibre optic lines in their premises.

Mr Bertrand Bidaud, managing vice-president, CSP strategy, Gartner Research, said: "The main problem is the fact that it is taking a bit longer than expected to connect the houses."

"So, once more houses are connected, the landlords and the condominiums can actually lead them to come in their premises, then we can expect take-up to increase," added Mr Bidaud.

The IDA said it expects 95 per cent of homes and non-residential buildings in Singapore to be wired up with NGNBN coverage by the first half of this year.

Among the telcos, StarHub said the take-up of fibre connection by companies is insignificant at this moment.

Meanwhile, M1 noted that interest in its fibre services remains high and that it enjoys a strong take-up rate largely from residential users.

SingTel has 55,000 fibre customers from households and companies as at the end of last year.

---

found that M1 + Singtel taken all the market share for fiber customer.

Starhub not interested on fiber customer? Any comment?

[CityFarmer]

M1 Q1 result on 16 April

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

[CityFarmer]

M1 AGM tomorrow at 3pm. Let see what i can derive from the AGM. Focus on any clue on IPTV.....

[CityFarmer]

M1 AGM tomorrow at 3pm. Let see what i can derive from the AGM. Focus on any clue on IPTV.....

After the AGM, it give me an impression that IPTV will not be focus in the near future, but rather on LTE and NGNBN (Fiber) service

I tent to agree that IPTV biz main hurdle is the content cost, which is too un-economical for M1 to venture in, at least in near future.

So we will starting or started to see bundle package of M1 (mobile, digital home line and fiber broadband service), It is the what is lacking pre-NGNBN era.

But i believe it will take a while for M1 to provide bundle pacakge include cable TV content

Feel free to comment/feedback

All above is my personal interpretation after i attended the AGM, not official announcement of M1 during the AGM

[CityFarmer]

At the moment, what is happen on fiber service market is

M1 market share is ~44%, the rest also all goes to Singtel i.e ~55%, while Starhub is "insignificant" at the moment.

Starhub do nothing for fiber? It is to avoid self-cannibalize its cable broadband service? but been cannibalized by other instead? ...

Any comment?