3 big reasons behind M1's solid 2Q13 results

Thanks to resilient EBITDA margin.

According to CIMB, M1 posted a solid 2Q13 firstly because of the surge in mobile service revenue, up 8% yoy in 2Q (the highest in morethan 10 years). 

Postpaid ARPU rose 2% qoq, which CIMB believes indicates the beginning of an upward trend in ARPUs, driven by the rapid take-up of tiered data plans.

Here's more from CIMB:

26% of M1’s postpaid users are now on tiered plans from 20% in 1Q13. We expect our estimate of 35% at end-FY13 to be exceeded.

The users on tiered data plans pay S$3/month more than users on the old plans or 5% of postpaid ARPU, 2) wireless broadband users that continued to drive subscriber growth, and 3) the resilient EBITDA margin that declined by only 1.2% pts qoq despite the higher subsidies expensed for the Samsung Galaxy S4 launch in 2Q.

M1 lowered its FY13 capex guidance to S$130m from S$130m-150m as it now has a better estimate of its spending.