M1 (formerly: MobileOne)

[money]

yes, extensive research in this company is not helpful when one does not consider the simple things like a lower ARPU due to the impending price war. With a 4th telco, the price power is severely eroded. Fixed expenses on the other hand are hard to cut. I would consider entering only if m1 drops substantially but i think it is very hard when they have a big shareholder

[cyclone]

Star1

M1 and StarHub Express Interest in Deeper Mobile Network Cooperation

M1 Limited (M1) and StarHub Mobile Pte Ltd (StarHub) signed a Memorandum of Understanding (MOU) today, to study potential further collaboration in mobile infrastructure sharing, with a focus on sharing radio access network, backhaul and access assets.

The MOU was signed by Chief Executive Officer of M1, Ms Karen Kooi and Chief Executive Officer of StarHub, Mr Tan Tong Hai.

For many years, M1 and StarHub have been sharing mobile infrastructure through mutual cooperation, including the combined antenna systems, in-building fibre and tunnel cables.

The aim of deeper mobile network cooperation is to enable both companies to optimise use of certain network elements through sharing, and improve network coverage and capacity for the benefit of their respective customers. Network traffic will continue to be managed independently by the companies.

More details in http://infopub.sgx.com/FileOpen/Media%20...eID=435598

[frus]

Good piece on why M1 and Starhub are likely to cut dividends - share prices do reflect that to a large extent:

http://riskon.net/singapores-fourth-mobi...re-sector/

[CY09]

Thanks frus for the link.

The whole article content seems similar to the discussion here on M1 and Starhub's thread - Dividends is more than FCF generated and debt of these 2 telecos have been growing these past few years.

[weijian]

M1 result is quite bad.

http://infopub.sgx.com/FileOpen/3Q16SGXA...eID=425276

Earning and Cash reduced quite significantly.

M1 FY16 results. QoQ reductions are consistent with Q32016. It is most probably only the start of the results' deceleration.

http://infopub.sgx.com/FileOpen/FY16SGXA...eID=436748

[cyclone]

61.3 + 640 + 104.2 = 805.5

Results for the year ended 31 December 2016
* Service revenue for FY2016 decreased 2.0% to S$805.5 million
* EBITDA margin at 38.7% of service revenue
* Net profit after tax declined 16.1% year-on-year to S$149.7 million

* International call services revenue was $S61.3 million

* Mobile services revenue was $S640 million

* Fixed services revenue grew 21.4% to S$104.2 million.
* Fixed services revenue increased to 12.9% of service revenue
* Fibre customer base also increased 32,000 during the year to 160,000

* Mobile data revenue was 54.0% of service revenue
* Mobile customer base increased 91,000 YoY to 2.02m
* Mobile churn was stable year-on-year at 1.0%.

* Proposed final dividend of 5.9 cents

[kichialo]

Operating expenses increased 33% QoQ due to higher Cost of Sales, where Handset cost component accounted for the bulk of the increase. Any idea what this Handset cost is and how it works?

[edragon]

It is a (advance) cost of sales where they will collect the sales amount by 24 monthly installment for a 2-year plan. For example if they sell a $1,300 phone to you at $100 with a 2-year plan, the telco will collect the balance of $1,200 by 24 months installment of $50 each month. If the service is worth $20 per month so telco will add $50 and make the plan as $70 per month for 24 months plan with penalty for cancellations of plan short of the contracted 24 months. Of course, the $1,300.00 phone is included their sales profit.

Telco have to purchase the phone upfront and paid the full amount (say, $700 cost) to the vendor such as Apple or Samsung or Sony etc. when getting the phones.

I must add here that it is a good thing this "handset component" increased, means they got many to sign up and contracted the 2-year plan. The more, the merrier as more consumers are tied down by contracts and the almost guaranteed profit will roll in for the next two years except those delinquent customers which needed to be dealt with in the courts for breaking contracts or not paying the monthly dues.

[kichialo]

It is a (advance) cost of sales where they will collect the sales amount by 24 monthly installment for a 2-year plan. For example if they sell a $1,300 phone to you at $100 with a 2-year plan, the telco will collect the balance of $1,200 by 24 months installment of $50 each month. If the service is worth $20 per month so telco will add $50 and make the plan as $70 per month for 24 months plan with penalty for cancellations of plan short of the contracted 24 months. Of course, the $1,300.00 phone is included their sales profit.

Telco have to purchase the phone upfront and paid the full amount (say, $700 cost) to the vendor such as Apple or Samsung or Sony etc. when getting the phones.

I must add here that it is a good thing this "handset component" increased, means they got many to sign up and contracted the 2-year plan. The more, the merrier as more consumers are tied down by contracts and the almost guaranteed profit will roll in for the next two years except those delinquent customers which needed to be dealt with in the courts for breaking contracts or not paying the monthly dues.

Thanks for the explanation.  

[money]

It is a (advance) cost of sales where they will collect the sales amount by 24 monthly installment for a 2-year plan. For example if they sell a $1,300 phone to you at $100 with a 2-year plan, the telco will collect the balance of $1,200 by 24 months installment of $50 each month. If the service is worth $20 per month so telco will add $50 and make the plan as $70 per month for 24 months plan with penalty for cancellations of plan short of the contracted 24 months. Of course, the $1,300.00 phone is included their sales profit.

Telco have to purchase the phone upfront and paid the full amount (say, $700 cost) to the vendor such as Apple or Samsung or Sony etc. when getting the phones.

I must add here that it is a good thing this "handset component" increased, means they got many to sign up and contracted the 2-year plan. The more, the merrier as more consumers are tied down by contracts and the almost guaranteed profit will roll in for the next two years except those delinquent customers which needed to be dealt with in the courts for breaking contracts or not paying the monthly dues.

Hi, just to clarify, say the telco purchase the phone upfront for cost of $480 from Huawei, is the $480 recognized one off or is it recognized over the 24 months contract at a cost of sales of $20 per month?