Guess which telco would suffer the most should iPhone sales continue to fall

Only one use fair value accounting for the iOS phones.

After much excitement with the release of iPhone 7 months ago, some analysts are seeing its sales to start dwindling. Citing KGI Securities analyst Ming-Chi Kuo, a report from 9to5Mac said iPhone shipment volume is forecast to decline to 40m-50m units in 1Q17, lower than the 51.2m units in 1Q16.

If this happens, then which among Singapore's telcos would bear the most burden? According to DBS Vickers Securities, M1 would endure the most impact.

"M1 is the only telco in Singapore to use fair value accounting for iPhones and hence its revenue will be more adversely impacted in the face of slowing iPhone sales," DBS noted.

It explained that M1 had accrued handset revenue of $67m in 3Q16, which will continue to adversely impact is service revenue over the next 2-3 years.

"This will be on top of declines in voice and SMS revenues due to cannibalisation from Over-the-top (OTT) players and increasing popularity of SIM-only plans pressuring postpaid average revenue per user (ARPU), which will continue to shrink service revenues of the industry," DBS stated.