Mobile Services

The postpaid segment continues to be the mainstay of M1’s mobile business. As at 31 December 2006, M1’s postpaid customer base formed 60.5% of its total customer base, but the postpaid business contributed 89.1% of its total mobile telecommunications revenue for the year.

M1’s postpaid customer base remained stable compared to the previous year, and customer churn averaged 1.5% per month, the same as to the previous year. M1’s strategy to grow its 3G customer base bore fruit in 2006. On the back of the availability of a wider choice of 3G handsets, the rising appeal of 3G in the mass market and coupled with M1’s attractive marketing programmes, the company grew its 3G customer base significantly over the previous year.

Looking ahead, M1 will ride on the 3G platform to introduce more innovative and relevant value-added services, to attract and retain customers, and to encourage them to increase usage.

M1’s postpaid revenue came under pressure during the year, mainly due to lower voice usage revenue.
The company continued to focus on non-voice services to grow revenue and these included continually introducing new content to the MiWorld portal, as well as driving adoption through marketing and promotional efforts. In addition, the year saw the launch of several innovative services, which were first-of-its-kind in Singapore:

• m-Auction available on MiWorld mobile portal. It allows customers to bid for the latest handsets and accessories;
  
  
• Mobile Blogging allows customers to update their blogs anywhere, anytime using SMS, MMS or
  MiWorld mobile portal on their mobile phones. The service supports the most popular blog
  sites in the blogging community;
  
  
• Mobile Podcast offers customers a wide selection of popular local and international podcast channels covering topics such as Business and Finance, Movies, Music, Sports, Health and Nature, News and Travel and Holiday.

2006 saw a new focus on developing the enterprise segment. M1 introduced an innovative subscription plan – TalkShare – that allows a group of three, five or ten enterprise users the flexibility of sharing local voice airtime and SMS, all bundled with the plan. M1 also launched M1 Windows Mobile® Email, a service that allows enterprise customers to securely and seamlessly access corporate emails with Windows Mobile-powered devices, on the go.

Other launches which leveraged M1’s 3G network included Vodafone Mobile Connect Card (VMCC) for laptop users with a 3G data access plan at an attractive monthly subscription and, riding on this, Singapore’s first portable 3G router which makes use of the VMCC to enable customers to set up their own Wi-Fi hotspots anywhere.

In the prepaid segment, M1’s customer base grew 21% over the previous year. This was achieved despite the termination of a significant number of lines during the registration exercise carried out in the first half of the year. The exercise put pressure on prepaid revenue, primarily due to incentives given to encourage registration.

With the registration exercise completed, sequential improvement in prepaid revenue was seen. Among the various marketing initiatives M1 undertook for this segment, the highlight was the launch of the Super M card and top-up card that offer greater value and more benefits to customers, including free incoming calls and free IDD calls to selected popular call destinations.

March 2006 saw the launch of Smart Pinoy – a prepaid mobile service targeted at the Filipino community in Singapore. The service is the result of a partnership between M1 and PLDT Singapore, and rides on M1’s network infrastructure. It offers voice and SMS (both local and international) and Filipino-centric content to customers.

International Call Services

International call services saw a decline in traffic and revenue in 2006, due mainly to market competition in the budget customer segment. M1 countered with a number of promotions of competitive rates on the 021 service, for selected destinations. The new rates were well received, raising both traffic and revenue in the later part of the year. Also contributory were the bundled offer of ICC and prepaid cards, and growth in the corporate segment. In the year, M1 was also active in targeting foreigners working in Singapore.

Sales & Distribution

M1 has an island-wide network of operator-owned retail shops (M1 Shop) and operator-appointed distributor outlets that serve the consumer segment and an enterprise sales team that serves the business segment. As at 31 December 2006, M1 operated a total of 13 M1 Shop outlets (comprising 7 main shops and 6 mini shops).

In addition, M1 runs an e-shop, which provides online sale of mobile phones and accessories.

Customer Service

M1 continues to lead the industry in customer service satisfaction, with strong focus on being relevant to customers and emphasis on creating memorable experiences for them. As the industry evolves to device convergence, M1 has equipped employees with the knowledge and skills needed to keep pace with developments which enable them to deliver a consistently high quality of service to customers. M1 makes a difference to customers by providing a level of service that is distinctly above the norm.

Network

The key highlight was the implementation of M1’s island-wide High Speed Packet Access (HSPA) network in the fourth quarter, the first of its kind in Singapore. The network is currently capable of supporting downlink access speeds of up to 3.6Mbps and enables M1 to offer more and faster multi-media services to customers, such as the M1 Broadband wireless Internet service.

In addition, M1 rolled out a wireless broadband access (WBA) service at Parco Bugis Junction shopping mall, using a Mesh Wi-Fi network and pre-WiMax as backhaul. The service gives surfers free Internet access till end-2007, with download speeds of up to 1Mbps. Unlike the typical Wi-Fi hot-spot network or WLAN (Wireless Local Area Network), Mesh Wi-Fi covers a wider area and offers a cost-effective solution through use of a series of Wi-Fi access points interconnected by radio links.

To support its growing 3G customer base, M1 continued to expand coverage and capacity of its 3G network.

M1-Vodafone Partnership

As part of M1’s strategy to further penetrate and serve the enterprise business segment, the scope of the M1-Vodafone partnership was expanded at the beginning of 2006. Under the terms of the expanded agreement, M1 has access to a wide range of wireless business products and solutions from Vodafone and, in the course of the year, M1 launched several key products:

• Vodafone Mobile Connect Card, a data card capable of download speeds of up to 3.6Mbps;
  
  
• 3G-enabled BlackBerry® Device, an extension of M1’s BlackBerry® service and portfolio of products launched earlier in partnership with Vodafone;
  
  
• Vodafone 3G Router, a portable device that works with the Vodafone Mobile Connect Card to provide shared Wi-Fi Internet connection;
  
  
• Vodafone Mobile Connect USB Modem, a portable and easy-to-install modem offered to customers as part of M1’s wireless broadband Internet service.

The partnership has also helped enlarge M1’s roaming footprint with the Vodafone Group. As at 31 December 2006, M1 had 3G roaming with 23 Vodafone networks and HSPA roaming with 12 Vodafone networks. The Vodafone Data Roaming service, which offers M1 customers a single data tariff while roaming on Vodafone networks, was expanded in 2006. As at 31 December 2006, the service was available in more than 50 countries and territories, up from 8 a year ago.