Singapore’s smallest telco M1 posted a 19.5% on-year decline in net profit for its third quarter at S$33.1 million ($27.2 million) on higher handset subsidies.
For the nine months ended September 30, net profits fell 14.1% year-on-year to S$108.6 million. But revenue for the third quarter rose 4% slightly to S$254.7 million, driven by growth in customer base and higher contribution from fixed services. Yet EBITDA margin on service revenue fall to 35.8% from 42.1% the same period last year.
M1 attributed the decline in profit growth to a rise in handset costs. During the third quarter, M1 spent about S$83 million ($68 million) on subsidizing smartphones such as iPhone 5, up 22% from the same period last year and 25.7% from the previous quarter.
As of September 30, total mobile subscribers reached 2.059 million after the addition of 24,000 new customers during the third quarter. M1 also improved monthly postpaid churn to 1.2% from 1.3% in the preceding quarter.
M1, which launched a nationwide 4G service in September, said it “saw very strong take-up of 4G handsets on our new smartphone plans.”
“Based on current economic outlook and barring unforeseen circumstances, the fourth quarter performance is likely to improve over the previous quarter,” said Karen Kooi, CEO of M1.