In 2005, M1 achieved a net profit of S$161 million, an increase of 4.6% over the previous year which had benefited from an adjustment due to the revision in corporate tax rate. Excluding tax adjustments, net profit growth would have been 10.4%. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew strongly by 13.5% to S$332 million, representing a margin of 47.2% on service revenue. Net profit margin was 22.8% of service revenue, comparable to the previous year despite the additional depreciation and amortisation expenses relating to the investment in 3G network equipment and licence. These results reflect continued topline growth and prudent cost management.

2005 marked an epoch in M1’s development with the commercial launch of 3G service in February. While this is an important milestone for M1 and the industry as a whole in Singapore, for customers the transition will be a gradual one. We were mindful during the year that 3G handsets had not reached a stage of design and functionality that would see mass market appeal and 3G in 2005 was clearly an early adopters’ market. Hence our focus has been on customer education and developing relevant services and content, rather than driving handset sales. Nonetheless, the last quarter of 2005 saw an acceleration in take-up and we expect to see some impact in revenue terms in the coming year.

With 3G facilitating the convergence of the mobile and internet worlds, it remains to be seen what will capture the imaginations of customers out of the myriad possibilities that 3G can offer. At M1, our continuous focus on innovation and listening to our customers will position us to ride the new wave and develop such opportunities into a sustainable business.

This year will see continued technology advancements in the 3G arena which will bring higher speed capabilities to the 3G network and narrow the gap with the fixed network. M1 will further improve the network during the course of the year. At the same time, other wireless technologies for broadband internet access also afford possible new opportunities. As a specialist wireless service provider, M1 sees Wireless Broadband Access (WBA) service as a prospective extension in a related market space. In May 2005, M1 obtained a licence and spectrum for the deployment of WBA service. We are evaluating the possible technology options and business models for the roll-out of WBA network and services which will complement our core mobile business.

In 2005, M1 continued to build on its strategic alliances and partnerships to deliver enhanced services, especially to the roaming segment, and develop new business opportunities. As well as growing the share of roamers from Vodafone partner networks, the M1-Vodafone partnership saw further progress with the launch of Blackberry from Vodafone and the implementation of Vodafone Data Roaming. During the year, M1’s other strategic alliance, the Asia Mobility Initiative, expanded with the entry of Celcom of Malaysia and Excelcomindo of Indonesia - both subsidiaries of Telekom Malaysia Group. M1’s ties with Telekom Malaysia have deepened further with the latter, together with Khazanah Nasional Berhad, making a strategic investment in M1. This partnership uniquely positions M1 to meet the communication needs arising from the strong social and business relationships between Malaysia and Singapore. M1 will leverage this relationship to identify new services, revenue streams and other potential operational synergies.

Arising from the new shareholding structure, I am pleased to welcome Mr Ganen Sarvananthan and Mr Yusof Annuar bin Yaacob to the M1 Board of Directors. I would also like to thank Mr Michael Grant, who stepped down from the Board of Directors in October 2005, for his service on the Board.

M1 remains committed to a sustainable dividend policy for our shareholders. For the final dividend in respect of 2005, the Board of Directors is recommending a payment of 8.1 cents per share. Taken together with the interim dividend of 5.0 cents per share paid in September 2005, this translates to a dividend payout ratio of 80% of net profit for 2005 and is an improvement on the 70% payout in the previous year. As well as maintaining a sustainable dividend policy, M1 regularly reviews its funding requirements and capital structure, and aims to return to shareholders cash in excess of its current and foreseeable requirements. Thus, a special dividend of 12.2 cents per share is also proposed, which amounts to a return of S$120 million to shareholders.

In 2006, we expect to see some of the key developments of 2005 start to bear fruit. While building on these, we will continue to protect and grow our existing sources of revenue. With this, and barring any material adverse event or change in market conditions, we estimate to achieve single digit growth in net profit after tax for 2006.

On behalf of the Board of Directors, I wish to thank M1 staff, customers, shareholders and partners for your continued support of M1.