M1's net profit may slump 2.8% to S$41.6m in 2Q12

But the increased NBN connection rate would benefit M1 most, says CIMB.

According to CIMB, M1 Ltd is due to report its 2Q12 results on 16 Jul, where the telco is expected to put in a relatively stable showing. "We forecast for revenue to come in around S$250m, up 1.9% YoY, but net profit to fall 2.8% YoY to S$41.6m. On a sequential basis, revenue is likely to fall 4.8%, but net profit should climb 3.2%."

Here's more from CIMB:

On the NBN front, IDA (Infocomm Development Authority) now requires OpenNet to, starting from Aug, increase its weekly customer connection by nearly 30% to 3,100 from a revised 2,400. This is to reduce the waiting time, which was reported to be as long as six weeks. In addition, IDA has asked OpenNet to put in place a process to cater for sudden spikes in demand, especially during the quarterly computer trade shows. We believe that the increased connection rate would benefit M1 most.

This is because M1 1) has a small base, 2) does not have much of a legacy system issue since its current cable modem bandwidth is leased from StarHub, and 3) could further penetrate into the corporate segment, especially in the more price-sensitive SME space.