Annual Report 2012, PDF - Axiata Group Berhad - Investor Relations

BusinessReview• Smartphone and mobile data plans with tiered databundles: M1’s smartphone and mobile broadbandservice plans were revised in conjunction with its 4Gservice launch. Entry-level plans start with 2GB ofbundled data, and re-contracting M1 customers willenjoy an additional 1GB of complimentary data• M1 Learning Centre: M1’s dedicated e-learning storefor Apple iPads and Android tablets offers 1,500e-books and 12,000 multimedia titles suitable for awide range of users, from pre-Primary learners toadults. The e-learning content for pre-Primary, Primaryand Secondary school students is closely aligned withSingapore’s education syllabus. There is also anextensive range of content for adult learners on avariety of topics, such as property investment andself-improvementFinancial PerformanceM1’s operating revenue for 2012 increased 1.1% to SGD1.1billion, driven by higher service revenue which grew 2.8%to SGD771.6 million. On a segmental basis, mobiletelecommunications revenue increased 3.3% to SGD607.0million, while fixed services revenue increased 25.7% toSGD48.1 million. EBITDA was SGD299.9 million,representing a margin of 38.9% on service revenue. NetPAT decreased 10.7% to SGD146.5 million, with marginon service revenue at 19.0% compared to 21.9% in theprevious year. Free cash flow was SGD152.3 million.Outlook for 2013With Singapore’s mobile penetration rate at 151.8%* andresidential broadband penetration rate at 107.3%* as atend December 2012, competition in the marketplace islikely to remain keen in 2013.Nevertheless, M1 is well-positioned to grow. Over theyears, M1 has made significant investments in serviceexcellence initiatives and networks, and the Companywill continue to enhance these areas to improve itscustomers’ experience.Within M1’s core mobile business, data usage will continueto grow, driven by increasing digitisation of customers’daily work and personal lives. The Company is poised tocapitalise on the increasing adoption of smart devicesand data services, with its nationwide 4G network andtiered-data service plans.Fixed services remain a growth segment for M1. Withnationwide coverage of the NGNBN, increased awarenessand as customers complete their existing contractcommitments progressively, the adoption of fibre servicesis likely to accelerate in 2013. M1 will build on themomentum to further entrench its position in the fixedspace. Revenue and margin for fixed services will likelyimprove as it continues to grow its customer base.As part of its commitment to continuously invest innetwork infrastructure, M1 is in the process of expandingand upgrading its 3G and 2G mobile networks. Thisincludes the implementation of a 3G network layerutilising the 900MHz spectrum band and a femtocellsolution, to further enhance network coverage. M1 is alsoexpanding and upgrading its microwave backhaultransmission network to add capacity to support futuredata traffic growth. Last but not least, the Company willbe deploying the latest network solutions to furtherenhance the resiliency of its core and radio networks.To support its needs as a dynamic full-service operator,M1 commenced a major upgrade of its Billing & CustomerCare system in 2012. The first phase of this upgrade, tobe completed this year, will enable the Company to bemore responsive to customers needs. The entire project,when completed in 2014, will further streamline itsbusiness operations and enhance interactions withcustomers.* Based on Infocomm Development Authority’s published statisticsavailable at the time of submission156