M1 (formerly: MobileOne)

[CityFarmer]

I have not touch on competitive landscape of non-residential market, after NGNBN (fiber broadband) is commissioned.

Non-residential services enabled by high-speed fiber broadband are

- Digital leased line service.
For existing fiber leased lines managed by Singtel, Verizon, Bluetel and other FBOs, it is unlikely for them to migrate to new fiber broadband network. But the remaining non-fiber leased lines are an open market to all players include Singtel, Starhub and M1. M1 had an edge of winning new market without cannibalized its existing biz

- Competitive fiber broadband solution
There are less than 95% of existing biz had installed fiber solution. This is an huge market for all RSPs, include Singtel, Starhub and M1. Singtel and Starhub will be hesitant to cannibalize their own existing revenue streams with aggressive promotion, which give M1 an edge in its promotion drive.

- Network Storage
RSPs can provide online storage, which will eliminate the infrastructure, maintenance cost for corporate customers. Extra value-added-service can be provided e.g. disaster recovery which should be appealing to corporate customers

- Cloud Computing
Cloud computing is becoming an important platform in corporate environment. It becoming an important mean to be faster, cheaper and better in corporate biz processes

There are other value-add-services, limited only by innovation of RSPs.

I did not see Singtel and Starhub promotion on fiber services to corporate customers yet, at least not publicly. I attached the soft-copy of M1 promotion to corporate customer in PC show recently.


  business_promo.pdf (Size: 496.11 KB / Downloads: 7)

[CityFarmer]

New update of IDA for Mar 2012 on the same link.

Fiber users up by 14K in Mar 2012 alone. An average of 11K for 3 months of Jan 2012 - Mar 2012.

Let's consider Jan 2012 - Mar 2012

DSL + Cable users down by ~30K
Fiber users up by ~34K

New update of IDA for Apr 2012 on the following link

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

Fiber user up by 10k in Apr 2012 alone. An average of ~11k per month for Jan-Apr 2012

In Jan 2012 - Apr 2012
DSL + Cable user down by ~43k
Fiber user up by ~44K

Cable user reduces slower than DSL user, which is understand-able. Main reason probably due to Starhub still promoting cable broadband.

[CityFarmer]

M1 Q2 result will be out in 16th Jul

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

I am optimistic on the result, but let's see...

[CityFarmer]

OpenNet has to ramp up installation
IDA tells fibre broadband builder it needs to raise its weekly capacity to 3,100
by Teo Xuanwei

http://www.todayonline.com/Hotnews/EDC12...stallation

The pressure of IDA on OpenNet building-up....

[Drizzt]

M1 result very disappoints.

[CityFarmer]

M1 Q2 result will be out in 16th Jul
...
I am optimistic on the result, but let's see...

It is a disappointed result.

I had a brief run thru the presentation slides. The fixed network biz grows much slower than expected. Fixed network customers are barely 56k till 2Q2012.

The M1 story went as expected so far, but at the much slower pace. I was expecting fixed network customers to reach >100K around end FY2011, but now i am not even sure it is achievable till end FY2012?

It is a real test on the confidence and patience.

I will continue with my current holding of M1 share.

[CityFarmer]

Mr Market reflected the Q2 result with 6cts lower to S$2.55, volume of 1835 lots.

The last few months of intensive advert by M1 does not bring-in corresponding sales growth. M1 need to revamp its promotion strategy.

Base on the indicative of wholesale cost, the majority of the customers are residential, rather than corporate customers.

[KopiKat]

Mr Market reflected the Q2 result with 6cts lower to S$2.55, volume of 1835 lots.

The last few months of intensive advert by M1 does not bring-in corresponding sales growth. M1 need to revamp its promotion strategy.

Base on the indicative of wholesale cost, the majority of the customers are residential, rather than corporate customers.

According to CIMB report (click on their 'M1 Limited' link in page 1 for full report), it's more of an accounting thing. Last time, Starhub EPS also dropped substantially when they started selling iPhones and due to a similar accounting recognition. Extracts,

Profitability impacted by accounting
Although its cashflows are unaffected, M1′s margins were impacted negatively by its accounting treatment for Android devices where the subsidies are expensed vs being amortised over the contract period for the iPhones. We suspect that this impact will carry over to 3Q12 as the very popular Samsung Galaxy S3 had only a one-month impact in 2Q12 since it was launched in end-May. Android devices made up about 70% of the total devices sold in 2Q, a reverse from previous quarters where the iPhones dominated. However, we think margins should improve thereafter when: 1) the new iPhone is launched, typically in 4Q, and 2) the impact of the Samsung Galaxy S3 washes through.

Outlook
Not surprisingly, M1 expects a “short-term” impact of handset subsidies on its profitability. It reiterated FY12 capex of S$120m. M1 views OpenNet’s 29% higher installation quota positively, but feels that it is insufficient to reduce the service activation period.



Phillip report saying the same thing,

What is the news?
M1 reported 12.9% q-q decline in Net profits due largely to a 40.9% decline in revenue from sale of handset. This is due to accounting treatment, in which revenue from the sale of non-iPhone handsets are amortized over the 24 months contract. Service revenue was also disappointing with decreases in pre-paid revenue, International call services, and fixed services.

[CityFarmer]

The analyst reports comment on handset cost accounting is valid.

The disappointment is mainly on (the lack of) growth, rather than (momentary) deteriorating of revenue/net profit.

The fiber installation finally reaches the condo residents. Hope the take-up rate will accelerate and M1 will take full advantage of it.

[CityFarmer]

New update of IDA for May 2012 on the following link

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

Fiber's user up by more than 19k in May 2012 alone. An average of ~13k per month for Jan-May 2012

During Jan 2012 - May 2012
DSL + Cable user down by ~57k
Fiber user up by ~63K

Base on data available from last Q result of SingTel and Starhub. Almost all SingTel and Starhub's new fiber users were migrated from existing broadband plans. The net increase of fixed network customers from both SinTel and Starhub were stagnant, while number of migrated fiber customers increased by 21K (SingTel) and 15K (Starhub).

The difficulty to lure existing customers of SingTel and Starhub remain a challenge by M1