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M1 in state of constant flux to stay nimble amid intense competition

Samantha Chiew
Samantha Chiew • 9 min read
M1 in state of constant flux to stay nimble amid intense competition
Amid the strong telco market share war, M1 CEO Manjot Singh Mann emphasises that the market is too crowded. Photo: Albert Chua/ The Edge Singapore
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In 1997, M1 entered Singapore’s telecom scene, breaking the decades-long monopoly Singapore Telecommunications Z74 -

(Singtel) held and becoming the first alternative option in local telco history.

M1 was listed in 2002 before being delisted in 2019. In September 2018 when the intention to privatise M1 was announced, the majority of shareholders, Keppel and what was then Singapore Press Holdings (SPH), said the privatisation was to “arrest the decline in M1 shareholder value through transformational efforts”.

In Keppel’s analyst briefing in October 2019, it said: “M1’s privatisation was an opportunity to turn around a business that Keppel knows well.”

Following its delisting, M1 announced a transformation programme in 2019 — before its competitors, Singtel and StarHub CC3 -

— announced their own programmes in 2020 to stay “future-ready”.

But what does it mean to be “future-ready”? Manjot Singh Mann, CEO of M1 since December 2018, explains: “Whether you use the word ‘adaptable’ or ‘transformation’, it means the same in many ways … As for ‘future-ready’, we look at it from a consumer lens where two things are happening — consumers are becoming more digitally active and the market is getting more competitive.”

On top of holding the position as M1’s CEO, Mann has recently been appointed as chief digital officer of Keppel, with effect from June 1.

See also: Singtel backs amalgamation of Intouch and GULF to simplify AIS’s holding structure

Mann will oversee M1 as well as Keppel’s data centres and networks business and drive the growth of the connectivity division.

According to Mann, the traditional approach of being an “analogue player” with extensive physical presence and interaction is obsolete. He highlights that corporate travel is undergoing a permanent shift as video conferencing and online meetings become more acceptable. Similarly, once a lucrative revenue source for mobile operators, international roaming is unlikely to return to its previous levels. “Corporate roaming will probably not come back and I think it will remain at the level it is,” he adds.

However, that does not mean M1 is abandoning face-to-face interactions with consumers for AI chatbots; instead, it is introducing new ways of reaching out to its consumers online. “We have to adapt to the new ways of working from a consumer angle. We expect our consumers to be more digitally active and native. If our organisation is not at the same level, that will not go well,” adds Mann.

See also: Singtel’s AIS ‘not obligated’ to pay additional revenue share claimed by National Telecom

Intense competition in Singapore’s telecom sector has led to a significant decline in margins and yields for players over the past decade. Mann says: “As the market gets more and more competitive, we have to find ways to remain relevant. And the whole transformation was based on that principle, that at the end of the day while technology is going to help us do that, how do we increase our customer lifetime value?”

Hence, M1 is in a “constant state of transformation” as “transformations never end”, says Mann. Amid economic uncertainty, companies must stay agile and continually adapt. “We have to make sure that we can give the customer what they need while being competitive enough and make sure that we protect our value,” he adds.

Crowded landscape

Mann views the local telco market as crowded, particularly after the Singapore government liberalised it further. In 2016, Simba (previously TPG) became the fourth mobile network operator, alongside numerous mobile virtual network operators (MVNOs) that sublet network capacity and resell under their brands.

Today, Singapore hosts around 10 MVNO players, including Changi Mobile, a unit of Changi Airport Group. Others like Circles.Life uses M1’s network to offer its own mobile services even while incumbents have introduced sub-brands such as Gomo by Singtel.

With experience in markets like Indonesia and Europe, Mann acknowledges the competitive pressures, describing the current landscape as “a tough market to be in” with numerous players vying for market share.

“As mobile penetration grows, the war for market share will typically become hot as everyone tries to outsmart each other. That is the nature of the beast, which is happening now in a crowded market,” he adds.

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Analysts suggest the market is ripe for consolidation. Speculation has arisen about M1 discussing a merger with StarHub. The two telcos have already collaborated in a joint venture to enhance their 5G spectrum in Singapore.

Mann declined to comment when asked, stating it is speculative but reiterated the crowded nature of the market. Mobile aside, broadband space is also rather competitive. M1 currently commands a 15% market share in the local broadband space. Mann is confident he can grow its market share as cable TV offerings become less popular.

“People are cutting the cord and cable TV is completely irrelevant to the OTT (over-the-top) content out there. Only the two big telcos offer cable TV services, which are bundled with their broadband offerings,” says Mann. “As these people turn to OTT and cut the cord, that market becomes available for us.”

With broadband connectivity independent of providers, the playing field has levelled and M1 has an equal opportunity to attract customers like its competitors. Mann anticipates this trend will expand M1’s market share.

Though Mann acknowledges intense market competition, he sees value in partnering with competitors for consumer benefit. M1’s collaboration with StarHub on the 5G spectrum has lowered network expansion costs, enabling M1 to reinvest savings in deployment and 5G use case experiments. In Singapore, M1 has approximately 30 5G deployments.

“This is a one-of-its-kind partnership, probably a first in the world, where two incumbent operators who have sworn to fight against each other have come together and created a JV, which is a fantastic thing to happen,” says Mann.

Apart from that, M1 has also partnered with Singtel to combat digital fraud jointly. As one of the first in the world to collaborate nationally, the two telcos are working together to federate a suite of application programming interfaces (APIs) that will enable enterprises to access real-time telco network data for authentication and fraud detection. Number Verify and Device Location are the first set of APIs to be federated. As part of the agreement, both telcos will work together to federate more APIs in the future.

“I think it’s a very nice thing to happen worldwide if telcos can start sharing information with one another … It’s for the good of the consumers. We have to protect our consumers,” says Mann.

Enterprise focus

Mann has clear plans for M1’s mobile and broadband growth but his vision for the enterprise segment could be a game changer. In June 2018, M1 acquired information and communications technology (ICT) network solutions provider AsiaPac Distribution. The company has since been renamed AsiaPac Technology. In December 2021, M1 and AsiaPac Technology invested $36 million in a 70% stake in Malaysian ICT network solutions provider Glocomp.

Mann explains that both AsiaPac and Glocomp have very similar business models. “With these two companies, we are trying to create a common customer base and cross-pollinate from Malaysia to Singapore. There are a lot of synergies between the two,” says Mann.

The enterprise segment has been contributing a bigger share of M1’s revenue. In FY2022, enterprise revenue comprised 32.7% of total revenue of $1.18 billion. The following year, M1’s total revenue reached $1.26 billion with enterprise revenue contributing 39.2%.

Meanwhile, M1 is looking to enter other markets within the region to expand its enterprise segment. “We are looking at other markets in the region to see how we can get a presence. We plan to create as much of a ‘common kitchen’ as possible by acquiring similar businesses,” Mann says. This creates an interoperability of customers, allowing the group to rationalise costs. With Glocomp, the group now parks a lot of its costs in Malaysia and has a development centre coming up there.  

“As much of the revenue comes out of Singapore and the costs come out of Malaysia, it is a double-edged advantage to us because of the favourable exchange rate,” says Mann.

In addition to expanding their market presence, M1 and AsiaPac are looking to partner with the sister company Keppel Data Centres (Keppel DC), a manager and operator of wholesale and co-located data centres across Asia-Pacific and Europe.

Mann explains that M1 can collaborate with Keppel DC to provide customers with a complete end-to-end data centre solution. AsiaPac offers front-end solutions such as security and cloud management, enhancing the value for data centre customers. Keppel DC also provides back-end services for leasing the data centres.

He adds: “I think the growth of enterprise is very exciting. You can expect a lot of news coming your way on our enterprise side, including the work that we’re doing with Keppel DC.”

 

Editor's note (June 1):
In response to this article, StarHub issued the following statement:
"We would like to clarify that StarHub does not provide traditional cable TV services. Nearly a decade ago, we transitioned from cable TV to IPTV, embracing a more modern and versatile approach to content delivery. Today, we proudly provide a cutting-edge future-proof hybrid platform that seamlessly integrates both linear and OTT content, delivering the best of both worlds to our consumers. This is reflected in our market-leading position in the Entertainment segment here in Singapore, which brings together streaming, gaming and other enriching experiences for our consumers. 
In fact, while OTT is an important aspect of our strategy, getting the right content is equally, if not more, crucial. As a market leader, we are confident in our superior content offerings and delivery models, which set us apart from competitors like M1. Our extensive content library, coupled with strategic partnerships and exclusive agreements, ensures that our customers have access to a diverse range of high-quality programming.
Moreover, it's worth noting that our broadband customer base is shifting from 1Gb/2Gb plans to our new 5Gb and 10Gb offerings. In contrast, M1 remains limited to 500Mbps and 1Gb plans, lacking the capability at this point to upgrade its customers to higher speeds. This shift highlights our commitment to providing superior, future-proof connectivity solutions that meet the growing demands of our customers. We are confident that our innovative content delivery model, coupled with our advanced high-speed broadband options, will continue to attract customers in this competitive market."

 

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