M1's net profit crashes 23.4% to $34.4m

Blame it on lower handset sales and weaker mobile revenue.

Before it even brace for the impact of a new possible telco player, M1 is already losing its lustre as it ended its 3Q16 on a low note, with earnings slumping 23.4%.

This is despite growing its customers base by 6.7% to 2.15 million

In an announcement filed on Singapore Exchange, M1 noted that its net profit declined to $34.4 million, in contrast with $44.9 million earnings recorded during the same period last year.

Its operating revenue slid 10.3% to $249.1 million, mainly due to the dip in the number of handsets sold, which saw a 28.9% contraction.

More so, its postpaid and prepaid revenue during the said quarter fell 6.1% and 10.4% to $137.8 million and $17.4 million, respectively.

Meanwhile, its total service revenue which includes turnovers from mobile telecommunications, fixed and international call service posted a 3.6% decline to $197.1 million.

Looking forward, M1 expects the telco industry to continue facing challenges by disruptive technologies, which would result in declines in traditional revenues.

"While customers consume more data with over-the-top (OTT) applications, growth in data revenue is likely to be moderated by competitively priced data offerings. Based on current outlook and barring unforeseen circumstances, the decline in net profit after tax for the year 2016 is likely to be around the year-to-date range," the telco said.

With this, M1 noted that they will continue to build its suite of cloud-based services bundled with data analytics and connectivity, to further penetrate the corporate and government sectors.

"We continue to invest in networks to strengthen our core business. Together with data analytics, internet of things (IoT) capabilities and new portfolio of digital solutions, M1 is well-placed to capture new opportunities in the digital space, beyond connectivity," M1 stressed.