Capex could rise to as high as $170m.
As the competition is expected to heat up in the telco scene with the arrival of TPG, M1 is expected to incur higher capex as it invests in new technologies.
According to Maybank KimEng, M1's capex is expected to soar by another 21% to $170m this year. It noted that this may be attributable as M1 firms up additional investments in new technologies, such as 4.5G/5G, HetNet, and NarrowBand IoT.
"Earnings will be diluted until they can achieve scale," Maybank noted.
Meanwhile, the brokerage firm noted that M1's net profit fell below the already lowered expectations. Postpaid revenue continued to weaken due to lower roaming, and IDD usage as the OTT switch deepened.
Data usage recorded a strong rise, but it barely made a visible impact on revenue or margins.
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