Why M1 may be scooping big time deals in the US soon

Analyst reveals its key strengths.

According to CIMB, its recent NDR with M1 in the US revealed that the clients liked its rising ARPU, defensive nature, the benign regulatory environment and relatively low competition.

"We think it will mirror the ARPU increase  witnessed by the Korean telcos after they re-priced their data plans," says CIMB.

Here's more:

We recently hosted a non-deal roadshow for M1 in Boston and New  York, where the management met 11 fund managers.

M1 was represented by its CEO Karen Kooi, CFO Lee Kok Chew and the head of investor  relations Ivan Lim.

Overall, investors were positive on the company and are looking for the right entry point.

They liked the defensive nature of the company, dividend yield, rising ARPU, the benign regulatory environment and relatively low competition.

However, there were some concerns over whether M1 can be squeezed by its larger rivals as it is the smallest carrier.

They were also concerned about its trading liquidity and valuations. We feel that M1 offers the best play into the monetisation of mobile data among the Singapore telcos.

Monetising data
The adoption of tiered data plans has resulted in a 10% uplift in ARPUs. Nine months after they were launched, 26% of post-paid users had switched to tiered data plans.

M1 believes 60-65% of post-paid users will switch to tiered data plans in 1-1.5 years. This is in line with CIMB’s forecast of 60% by end-14.