2 main culprits behind M1's weaker data revenue growth

Flat service revenue recorded in 3Q.

According to CIMB, M1’s 3Q13 service revenue was flat qoq, despite a 6% rise in the adoption of tiered data plans to 32%.

The growth in data revenue was diluted by: 1) lower roaming revenues due to lower inter-operator termination (IOT) rates and fewer travellers not using international data roaming by buying prepaid cards or using free WiFi at their travel destinations. CIMB expects this phenomenon to continue because of expensive roaming rates, conveniently-available prepaid SIM cards in Singapore and most countries, and downward trend on the IOT. Roaming revenuecontributes 12% of M1’s net revenues;and 2) weaker IDD revenues on lower tariff.

Here's more from CIMB:

As a result of these factors, service revenue slowed from 9% yoy in 2Q to 5% in 3Q. Device subsidies dipped 7% qoq despite the launch of the Samsung Galaxy S4 in mid-Jul. This reflects the lower selling price of this device.

iPhone 5S and 5C and 4Q
We expect EBITDA and EBITDA margin to rise qoq in 4Q on the back of the iPhone 5S/5C which were launched at end-Sep. Unlike the subsidy of other devices which are expensed, that of the iPhones are amortised over the term of their contract.

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