SINGAPORE (Jan 24): M1 Limited posted a 16.1% fall in FY16 net profit after tax to $149.9 million mainly due to lower international call and roaming revenues, as well as increased depreciation and amortisation expenses from higher fixed asset base in respect of 4G network, additional spectrum acquired, and new services.

Operating revenue for FY16 ended Dec decreased 8.3% to $1.06 billion. Service revenue for FY16 decreased 2.0% to $805.5 million as traditional telecommunications services continued to be impacted by OTT (over-the-top) services. Fixed services continued to post strong growth with revenue increasing 21.4% to $104.2 million.

In the 4Q ended Dec, net profit after tax fell 27.1% to $31.8 million while revenue rose 1.9% to $313.9 million.

During the year, M1 added 52,000 postpaid customers and 39,000 prepaid customers, to bring the total mobile customer base to 2.02 million. Mobile churn was stable year-on-year at 1.0%. Data traffic continued to trend higher, with average postpaid smartphone data usage increasing to 3.6GB per month in fourth quarter of 2016, from 3.3GB per month a year ago. Mobile data revenue increased 7.7% percentage points year-on-year to 54.0% of service revenue. M1’s fibre customer base also increased 32,000 during the year to 160,000.

Looking ahead, M1 said market conditions are expected to remain challenging in the current year as the communications sector continues to evolve and the market welcome a new mobile network operator. However, the rise of business ecosystems based on internet, growing internet-of-things (IoT) services, as well as Government’s smart nation initiatives, are creating new addressable markets.

The Board of Directors has recommended a final dividend of 5.9 cents per share, taking full year payout to a total of 12.9 cents per share.

Shares of M1 closed 6 cents higher at $2.17.