M1 sees greater profit gain in 2001 from data service
By Bloomberg, Singapore.CNET.com
Monday, February 19 2001 11:20:18 AM
SINGAPORE--MobileOne Asia Pte Ltd, Singapore's second-biggest cell phone company, said it expects a sizeable gain in profit even as it faces greater competition and spends more on new networks.
The higher earnings will come from data and services instead of traditional voice calls. Last year, the company's pretax profit more than doubled to S$79 million in 2000 from S$29 million a year ago. M1's sales rose 43 percent to S$570 million.
"The market will continue to grow and in terms of revenue, we're looking at non-voice to be the revenue driver," Neil Montefiore, M1's chief executive, said in an interview. "Doubling of profit year on year isn't sustainable for long but certainly, we're hoping for substantial profit growth in the next year." He declined to give detailed numbers.
Mobile phone operators are increasingly turning to data and other services to compensate for falling prices in voice calls. They're also building new networks that will enable high-speed Internet access on cell phones. M1 is expected to spend as much as S$1 billion for such a license and network, commonly called third-generation mobile services or 3G.
Becoming popular
Such services are gaining popularity. On Valentine's Day, for example, M1 saw a record of 3.7 million text messages sent by its more than 700,000 customers, beating New Year Eve's 3.5 million messages. In the past six months, non-voice services saw a 20 percent to 25 percent gain in revenue.
"That's more than one message per person, which makes you think some Valentines have more than one girlfriend or boyfriend," he joked. "Singaporeans are falling in love with short message system."
That's important as the company faces more competition as a third player, StarHub Pte Ltd, entered the Singapore market in April. M1 said it maintained its 35 percent market share with StarHub's entry and as rival Singapore Telecommunications Ltd. introduced a series of promotions.
Getting users hooked on to such text services on cell phones also sets the stage for future services when newer networks are set up for faster Internet access. For now, M1, like most operators, is giving away the text messaging services for free for the first 300 or so messages each month.
"They want people to get used to it so that when 3G is launched, consumers are familiar with using the phone key pad for text," said Rachel Miu, an analyst at Daiwa Institute of Research Singapore Pte Ltd.
M1 is owned by Cable & Wireless Plc in the UK, Hong Kong's Pacific Century CyberWorks Ltd, Singapore Press Holdings Ltd and Singapore's Keppel Telecommunications and Transportation Ltd.
Copyright 2001, Bloomberg L.P. All Rights Reserved.
Related Stories
singapore.cnet.com |
