Company Overview
M1 is a leading provider of mobile and fixed communications services to over 1.9 million customers in Singapore. With emphasis on quality, customer service, value and innovation, we aim to brighten lives by linking anyone and anything; anytime, anywhere.

For mobile services, we offer a wide range of voice, data and value-added services on our nationwide Global System for Mobile Communication (GSM) / 3G / High Speed Packet Access (HSPA) network. Customers subscribe to our mobile services on either a postpaid or prepaid basis through a variety of price plans. Additionally, our wireless broadband service - M1 Mobile Broadband - offers customers a variety of service plans at different access speeds. Today, our mobile network is capable of supporting downlink and uplink throughput speeds of up to 28 Mbps and 5.76 Mbps respectively.

In the area of international call services, we offer mobile and fixed-line customers International Direct Dial (IDD) services using prefixes 002 and 021, and an International Calling Card (ICC) service using prefix 1818. We also sell international wholesale minutes to other international service providers.

For fixed services, customers can choose from various broadband service plans with speeds ranging from 5 Mbps to 1 Gbps, including fixed voice and other value-added services. In addition, we offer managed and data centre services, cloud computing services and other enterprise solutions for corporate customers. In November 2010, we launched 1box, a simple plug-and-play platform for customers to access internet content on TV, as well as, a range of on-demand services. Our services are further supported by mFix, a remote technical support service for computers and smartphones.

The M1 Group holds both Facilities-Based Operator (FBO) and Service-Based Operator (SBO) licences, issued by the Info-communications Development Authority of Singapore (IDA), for the provision of telecommunication systems and services, including the Telecommunication dealer’s class licence. In addition, we hold Internet access service provider licences and IPTV licence issued by the Media Development Authority.

Our short history is marked with many successes, including the following key milestones:

• Commercial launch of mobile services in April 1997;
• Achievement of 10% mobile market share within one month of launch, and profitability in the first full-year of operations in 1998;
• Listing on the Singapore Exchange in December 2002; and
• First operator in Singapore to launch:
  • - 3G mobile services commercially in February 2005
  • - Nationwide mobile broadband services in December 2006
  • - Fixed services on the Next Generation Nationwide Broadband Network (NGNBN) in September 2010

In 2010, we achieved a net profit after tax of S$157.1 million, 4.5% higher than 2009. Net profit margin on service revenue was 21.4%, comparable to 2009. Operating revenue and service revenue improved by 25.3% to S$979.2 million and 4.6% to S$732.9 million respectively. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 1.2% to S$313.3 million.

As at 31 December 2010, M1 had a total of 1,911,000 mobile customers, comprising 1,001,000 postpaid customers and 910,000 prepaid customers. Our overall market share of the mobile customer base was 26.2%, comprising a postpaid share of 26.6% and a prepaid share of 25.8%.

Market Developments
Based on statistics published by IDA, as at 31 December 2010, Singapore’s mobile penetration was 143.6%, which was 6.1 percentage points higher than that a year ago. Out of the total market mobile subscriber base of 7,288,600, 51.6% were postpaid subscribers and 48.4% were prepaid subscribers. For the fixed broadband market, there were 569,400 Digital Subscriber Lines (DSL) users and 678,800 cable users for both the residential and corporate segments as at 31 December 2010.

We were the first operator to launch ultra-high speed broadband services of up to 1 Gbps on the NGNBN to both homes and businesses in September 2010. Through this new fibre-to-the-home (FTTH) network, the Government aims to position Singapore for an info-communications enabled future, and to transform the way Singaporeans live, learn, work and interact. The rollout is progressive and targeted to reach 95% coverage by mid-2012. For M1, this new network provides a neutral and transparent environment where we can compete more effectively in the fixed space.

Full-Service Operator
As early as 2007, we initiated a strategy to evolve M1 from a single play mobile operator to a dynamic full-service operator. This was in anticipation of the changes in the telecommunications ecosystem, resulting from the rapid convergence of communications and entertainment services, as well as increasing interdependence of devices, networks, application services and content.

In line with our plans, we unveiled the change of the Company’s name from MobileOne Ltd to M1 Limited with a highly visible re-branding campaign and a refreshed logo in April 2010. The new name signifies our move away from being a pure mobile centric operator, but at the same time, retaining our highly established and recognised brand in Singapore.

In September 2010, we commenced offering of ultra high-speed fixed broadband, fixed voice and value-added services for both residential and corporate users on the NGNBN. This was followed by a first step towards offering quadruple services in November 2010 with the launch of 1box, which allows customers to access internet content on TV and a range of on-demand services.

Postpaid Mobile
The mobile business remained core to M1 and in particular, the postpaid segment continued to be a major contributor to our operating revenue. During the year, our postpaid customer base grew by 89,000 to reach 1,001,000. In the process, we regained market share and reversed the trend of previous years. As at 31 December 2010, our postpaid customers formed 52.4% of total mobile customer base, and contributed 86.6% of our total mobile telecommunications revenue in 2010. In line with our strategy to grow non-voice usage, contribution from non-voice services rose to 31.9% of service revenue in 2010, from 26.0% in 2009, driven mainly by growth in the mobile broadband and smartphone customer base.

We started the year with the demonstration of next generation mobile broadband capabilities, offering speeds of up to 100Mbps for downlink and 50Mbps for uplink, through a Long Term Evolution (LTE) network trial. The two-month trial was conducted at our Paragon flagship store and customers had the opportunity to experience amongst other things, High Definition (HD) TV streaming and high speed internet surfing over the LTE network.

In May, we launched a mobile application store – M1 AppStore, to bring the latest and most exciting applications to our customers under one roof. The M1 Appstore offers a wide selection of applications ranging from games, entertainment and sports to social networking, education and utilities, accessible on various mobile operating platforms including Android, iPhone, Blackberry, Windows Mobile and Java. It also provides content developers a platform to commercialise their applications and gain valuable market exposure.

The iPhone 4 was released at midnight on 30th July, and we celebrated the highly anticipated launch at our Paragon flagship store for invited customers. The event, which featured music and entertainment, was a success with a huge turnout. We continued to offer unbeatable value through a range of service plans, including the Take3 programme that offers iPhone 4 at no upfront cost and the Value plan that offers monthly subscriptions as low as $36, supported by our unrivalled customer care and superior network performance. During the month, we also launched data tariff plans for iPad, which feature no lock-in period, generous data bundles and speeds of up to 7.2Mbps.

2010 was a year of smartphones and tablets, and the former made up majority of our handset sales. Throughout the year, we offered customers exciting new smartphones on various operating systems including Android, iPhone, Blackberry and Symbian. The fourth quarter also saw the launch of smartphones on the latest Windows Mobile operating system from vendors such as HTC, Samsung and LG, as well as exclusive tablets from ViewSonic and Huawei.

Prepaid Mobile
In 2010, our prepaid customer base grew 7.6% over the previous year to 910,000. The prepaid market remained highly competitive and we continued to drive targeted promotions and introduce service enhancements to provide superior value to customers.

During the year, we strengthened our links with key foreigner segments such as the Indians, Bangladeshi, Myanmarese and Indonesians with continued sponsorships for major celebration events such as Thaipusum, Deepavali Light-up, Bangladeshi New Year, Myanmarese New Year and Hari Raya. In addition, we re-launched our 3G M Card as the primary prepaid SIM card for customers as it offers higher internet surfing speeds and enhanced multimedia experience. We also expanded our range of services for the prepaid segment, such as prepaid data service plans for iPad, payment for downloads from M1 AppStore and alternative top-up channel through e-vouchers. Our new retail presence at the Changi Airport and Budget Terminal serves to extend our reach to inbound travelers looking for prepaid solutions for their stay in Singapore.

Fixed Services
Fixed services revenue grew to S$24.5 million in 2010, up from S$6.6 million in 2009.

During the year, we continued to grow our fixed broadband customer base in both the residential and corporate segments. The launch of NGNBN in September enabled us to expand our suite of fixed services offerings, as well as lower our wholesale costs. We introduced a range of new tariff plans for high-speed fibre broadband services at highly attractive prices, including Singapore’s first 1Gbps service plan, as well as fixed voice and value-added services to homes and businesses. For corporate customers, we provide managed and data centre services, cloud computing services, customised solutions, as well as flexible bundling of fixed and mobile services.

In November, we launched 1box, which delivers internet and a range of on-demand infortainment services on TV to homes over broadband. Essentially, 1box is a simple plug-and-play device that connects to a TV and allows customers to sit back and enjoy videos on popular websites such as YouTube, Clicknetwork.tv and Discovery Channel, and stay in touch with family and friends on social networking sites, such as Facebook and Twitter. It also offers a range of compelling on-demand content services, such as movies, celebrity concerts, exciting games and fun learning modules. Additionally, 1box allows connection to external media storage for customers to share their personal videos, music or photos with family and friends. Customers can rent the box for either S$5 or S$12 per month depending on their M1 Home Broadband plans, and access on-demand services on a pay-per-view or monthly subscription basis.

Regulatory and market developments are challenging the structure of traditional pay TV model. During the year, the Government announced the proposed implementation of mandatory cross carriage of exclusive content in the pay TV market, and made strides to introduce an open access IPTV infrastructure. Both of these initiatives will see further developments in 2011. The availability of connected TVs, which offer direct internet access and content on TV, is likely to bring forth an enhanced viewing experience.

Products and Services
In 2010, we launched a series of innovative and exciting services, including (in chronological order):

• M1 Online Music Store: A Web Music Portal that offers a comprehensive suite of full song audio, ringtones and videos download service. Our music selection covers the latest Billboard Hits to inspirational and classical music. M1 was the first in Singapore to offer digital rights management free music that can be played or transferred onto any music program or portable music device.
  
  
• M1 AppStore: A web and WAP portal that allows third party developers to join for free and upload their creative applications for M1 customers to download and enjoy. M1 AppStore supports applications (apps) that run on Android, BlackBerry, Symbian, iPhone, Java, Windows Mobile operating systems. For developers, the registration and upload processes are simple and carried out online. They are also able to retain the majority share of revenue for paid apps. For customers, M1 AppStore is a one-stop portal for them to look for contents that are compatible with their handsets. M1 AppStore supports both free and paid apps, and the latter can be either charged to postpaid customers’ bills or deducted from prepaid cards.
  
  
• M1 Chubb Home Security: A comprehensive security and safety solution for homes and offices that incorporates intelligent security sensors, siren and remote monitoring capabilities. In the event of any intrusion, users will be alerted by the Chubb Central Monitoring Station through SMS. The service is based on SIM card and wireless connectivity between the devices such as the control panel, motion detector and the door/window contacts. Therefore, minimal set-up is required and there is no risk of wired telephone lines being cut. The service is ideal for use at home, offices or retail shops.
  
  
• My M1: This is a free, one-stop mobile application that allows M1 customers to check their personal information, including bills, data usage, re-contract eligibility, birthday and exclusive movie treats across iPhone, BlackBerry, Android, Windows Mobile and Java devices.
  
  
• M1 mFix: This service offers customers remote technical support for personal computers (PCs) and smartphones, in the comfort of their homes and offices. With only an internet broadband connection, customers can enjoy M1 mFix services including malware/virus removal, diagnostic services, software installation, email setup and data backup, without having to wait in queues with their computers at a service center.
  
  
• M1 Games Online: This service is a multi-player game portal offering popular first-person shooter and online role-playing games. M1 Home Broadband customers can conveniently purchase game credits via internet and charge to their M1 bill.
  
  
• M1 Internet Security: For a small monthly subscription fee, this value-added service protects against online threats and enables customers to surf the Internet without having to worry about viruses, spyware, spam and other malware. It filters out suspicious websites to ensure online safety, and prevent unauthorised attempts to change operating systems or software on PCs. In addition, parents can shield their young children from inappropriate internet content and limit their online usage.
  
  
• 1box: A multi-media set-top box which allows customers to enjoy internet content and surfing, stream movies and music concerts, play games and access education content from the TV. Customers can also share their own personal collection of videos, music and photos on-screen by connecting external storage devices to 1box.
  
  

Sales and Distribution
We have a nationwide network of operator-owned retail shops (M1 Shop) and operator-appointed distributor outlets that serve the consumer segment, as well as an enterprise sales team that serves the business segment. During the year, we increased our retail presence with the opening of new shops at Changi Airport and Nex Shopping Centre in Serangoon. As at 31 December 2010, we operate a total of 14 M1 Shop outlets and entered into an agreement to open a new shop in Clementi Mall. In addition, we operate an e-shop (www.m1shop.com.sg), which sells mobile phones and accessories online.

“See M1 in a New Light” and “NGNBN - Switch to M1” Campaigns
2010 marked a major milestone for M1 in our transition to a full service operator. M1 is already a well-established mobile brand name. With the launch of our expanded fixed services to both residential and corporate customers, it was an opportune time to re-position our brand to better reflect the Company as a multi-service operator.

The new Brand campaigns were launched in two phases:

• The first phase saw the launch of “See M1 in a New Light” campaign. The aim of the campaign is to demonstrate M1’s transition and that customers now have a new choice for their communication needs in both their homes and businesses. Our new logo features a full “orange circle” which signifies the transformation of M1 to a full service operator, as well as the letter “M” and number “1” being brought closer, to demonstrate that we will always be close to our customers, listening and understanding.
  
  
• The second phase was the “NGNBN - Switch to M1” campaign which served to showcase our new expanded products and services and how we have evolved to provide customers with more choices for home, work and play.

Both campaigns presented M1 as a customer-centric organisation, always progressing with our customers to meet their current and future needs.

Customer Service
As we evolved to a full-service operator, customer service excellence remains a key differentiating factor for us. 2010 saw us launching major new services, particularly in the fixed segment, and we ensured that our staff were equipped with the knowledge and skills required to deliver a consistently high quality of service to customers. During the year, we also completed the company-wide Customer Centric Initiative (CCI) training for all staff. The CCI programme, which started in 2009, is structured to align all staff to a common service vision to achieve service excellence at all touch points. In recognition, M1 was the only telecommunications company in Singapore to achieve a year-on-year improvement in the Customer Satisfaction Index (CSISG¹) for 2010.

1	The CSISG is commissioned by the Singapore Workforce Development Agency (WDA) and managed by the Institute of Service Excellence (ISES) at Singapore Management University

Network
M1 was the first operator in Singapore and South-East Asia to demonstrate the LTE technology to the media and public in February 2010. This was followed by technical infrastructure trials conducted with multiple vendors in the first half of the year.

During the year, we continued with our 2G network modernisation works which are scheduled to be completed in the second quarter of 2011. This upgrade will enable us to achieve up to 35% reduction in carbon footprint and facilitates a smooth transition to LTE.

We continued to upgrade and expand our existing 3G and HSPA networks, facilitated by the acquisition of an additional 5 MHz of 3G spectrum from IDA. The expanded network will support customer and usage growth.

Our backhaul transmission network, comprising central and eastern access networks, served to increase our self-provisioning and reduce our operating expenses. We commenced our second phase expansion that included the new western access network, which will further increase our self-provisioning capability, when completed.

To support our NGNBN services, we have deployed new infrastructure, including additional fibre cables, Internet Protocol (IP) Core system and an IP Multimedia Sub-system during the year, which enabled the provision of our fixed broadband and fixed voice services. Our successful and timely interconnection with Nucleus Connect allowed us to be the first to commercially launch NGNBN services in September 2010.