Monday, October 17, 2011

KReit, M1, AReit




Analyst's Report


Bottleneck issues should be behind soon. We expect much of the bottleneck  issues (largely at the OpenNet level) afflicting the slow take-up of the NGNBN  services in Singapore thus far to resolve by end- 2011/1Q2012.
M1 indicated at the recent 3QFY11 results call that interest on its entry level fiber plan (Singapore’s
cheapest offering at SGD59/mth for 100Mbps) has picked-up with greater  awareness in the market.
M1 said 40-45% of the 16k fiber customers recorded as at 3QFY11 were added during the quarter, translating into some 7k new additions although it was not able to guide on its share of the market.
 This contributed to the 77% y-o-y growth (+9% q-o-q) in fixed services revenue for the quarter.
 It believes there are at least 12k broadband users on cable/ADSL coming out of contracts which presents a good potential catchment.
M1 deployed its own NGNBN OpCo in Sept with its geographical footprint widening to 100% by end- 2011 from 50% currently.
The company saves up to SGD31 in wholesaling cost per customer by linking its fiber customers across its own OpCo than the government mandated Nucleus Connect.

 All is not lost without Vodafone. We believe all is not lost as the Vodafone agreement entails strict volume commitments that M1 could have found prohibitive given the scale and its roaming traffic profiles, and it would be able to save substantially on fees paid to Vodafone by not renewing the partnership.

No comments:

"Wisdom is purified by virtue and virtue is purified by wisdom. Where one is, so is the other."