M1’s Q1 profit up 6.6% but market share falls

SINGAPORE — M1 yesterday reported first-quarter net profit rose 6.6 per cent, boosted by a surge in handset sales, as Singapore’s third-largest telco forecast moderate growth in full-year earnings despite a slump in market share.

For the three months ended March 31, M1 earned a net profit of S$45.7 million, up from S$42.8 million in the corresponding period a year earlier, as operating revenue jumped 22.8 per cent to S$294.8 million.

Total service revenue was up 0.2 per cent at S$204.4 million as the rise in mobile and fixed services revenues offset a drop in international call services revenue. Meanwhile, handset sales surged 149.5 per cent to S$90.4 million during the period.

M1’s post-paid customer base grew 1.7 per cent to 1.157 million as at March 31, but failed to match growth in its larger rivals, resulting in a drop in market share to 24.4 per cent from 24.9 per cent.

In the pre-paid segment, M1’s customer numbers slumped 26.2 per cent to 713,000, slashing its market share to 20.7 per cent from 25 per cent.

M1 said its overall market share is estimated to have fallen to 22.8 per cent from 25 per cent.

Staff costs surged 5 per cent in the first quarter to S$29 million mainly due to annual wage increments, M1 said. Advertising and promotion expenses jumped 43.6 per cent to S$7.9 million as the telco carried out more marketing activities.

Average post-paid smartphone data usage increased to 3.2GB per month in the quarter from 2.8GB in the year-ago period, while average prepaid data usage doubled to 0.8GB per month, M1 said.

“Even as we see continued growth in data usage, we will make further investment in talent and new technology platforms to enable smart solutions on our network. This will position us well to capture further growth and participate in the Smart Nation initiative,” said M1 Chief Executive Karen Kooi.

“Based on the current economic outlook and barring unforeseen circumstances, we estimate moderate growth in net profit after tax for the year 2015,” M1 said.