M1 profit crashes 14.1% to S$108.6m

Blame it on higher handset subsidies.

In a release, M1 announced the unaudited group financial results for the nine months ended 30 September 2012.

Service revenue grew 2.8% to S$577.4 million, driven by growth in customer base and higher contribution from fixed services. Net profit after tax decreased 14.1% to S$108.6 million due to higher handset subsidies. Free cash flow increased 46.5% year-on-year to S$169.0 million.

Revenue from non-voice services rose 2.1 percentage points to 38.0% of service revenue, driven by continued growth in smartphone customer base. This now accounts for 73% of total postpaid customer base.

During the third quarter, M1 added 24,000 customers, bringing the total mobile customer base to 2.059 million as at 30 September 2012. Monthly postpaid churn improved to 1.2%, compared to 1.3% in the preceding quarter. As at 30 September 2012, M1 had 44,000 fibre customers.

“On 15 September 2012, we achieved another milestone as the first operator in South East Asia to launch nationwide 4G service. At the same time, we introduced new smartphone and mobile broadband plans with tiered data bundles. Being the only operator with nationwide 4G coverage, we saw very strong take-up of 4G handsets on our new smartphone plans,“ said Ms Karen Kooi, Chief Executive Officer of M1.

As forerunner and champion of fibre services, M1 focuses on delivery of better user experience and value. Based on the recent Infocomm Development Authority’s independent audit of local Internet Service Providers’ fibre broadband performance, M1 customers experienced significantly faster download speeds to overseas websites, compared to similar or even higher-end offerings from competitors. M1 will continue to drive adoption of fibre services.

“Based on current economic outlook and barring unforeseen circumstances, the fourth quarter performance is likely to improve over the previous quarter,” added Ms Kooi.