M1 profit falls 16.1% in 2016

Singapore’s M1 has reported a 16.1% slump in net profit for 2016 to S$149.7 million ($105.3 million), blaming lower international call and roaming revenues as well as rising expenses.

The operator’s service revenue for the year fell 2% to S$805.5 million, due to the ongoing impact of OTT substitution. But fixed-line revenue grew a strong 21.4% to S$104.2 million, growing to account for 12.9% of service revenue.

Besides the decrease in revenue, M1 said depreciation and amortisation expenses grew due to an increasing 4G network fixed asset base, and additional spectrum acquisition costs also contributed to the profit decline.

M1 added 52,000 postpaid customers and 39,000 prepaid customers during the year, bringing its total mobile customer base up to 2.02 million. Mobile churn meanwhile stayed flat at 1%.

During the year, mobile data consumption grew to account to more than half of M1’s total service revenue, increasing 7.7 percentage points year-on-year during the fourth quarter to 54%.

M1 meanwhile added 32,000 fiber customers during the year, taking its total to 160,000 and contributing to the growth in fixed service revenue.

Capex for the year grew to S$140.5 million, up from $133.5 million a year earlier,

“We continue to invest and innovate to enhance our service offerings to better serve our customers, as well as capitalize on new opportunities in the digital economy such as solutions for smart nation and  IoT services,” M1 CEO Karen Kooi said.

“These initiatives, together with the foundation that we have laid over the years, will enable us to create and deliver long-term value to our stakeholders.”