M1, Singapore's third largest Mobile Operator saw a decline of 7.2% net profit after tax to a total of S$83.5 million in the first half of the year compared to the same period a year ago. Service revenue was stable at S$407.3 million for the financial results for the six months ended 30 June 2016.
The lackluster performance is partly due to the drop in handset sales which fell by 50% year-on-year in the second quater compared to the same quarter in 2015.
M1's fixed services continued to post strong growth, growing 26.7% to S$50.0 million to account 12.3% of its total service revenue. The increase was driven by growth of 9,000 residential and corporate fibre customers in the quarter, bringing its base to 145,000.
During the quarter, M1 also added 14,000 postpaid customers and 24,000 prepaid customers, to bring the total mobile customer base to 1.98 million. Mobile churn improved to 0.9%, compared to 1.0% in the preceding quarter. The Operator said that the OTT (Over-the-top) impact on traditional telecom services has slowed.
Average postpaid smartphone data usage increased slightly to 3.3GB/month in second quarter of 2016, from 3.2GB/month a year ago. Average prepaid data usage grew to 1.3GB/month, up from 1.0GB per month a year ago. Mobile data contribution increased 9.1 percentage points year-on-year to 54.0% of service revenue in the latest quarter.
Karen Kooi, Chief Executive Officer, M1
We are investing in new technologies and capabilities, and building up a portfolio of digital solutions to enhance our service propositions and cater to changing customer needs. While expenditure is incurred upfront, meaningful contribution will only be upon achieving scale in service adoption over future years.
