TELECOM & INTERNET | Staff Reporter, Singapore

Why M1's handset sales are poised for a downturn

Subscribers prefer SIM-only plans.

Singapore telco M1 will have to face declining handset sales as subscribers switch to SIM-only plans.

According to DBS Vickers Securities, M1's postpaid acquisition costs increased ~22.7% to $438 from $357 in 3Q16.

"Due to M1’s use of fair value accounting for iPhone, this has increased accrued handset revenues to $87m from $67m in 3Q16. This will have a downward impact on M1’s service revenues as the accrued revenues are amortised in the future," DBS said

It added, "We expect M1’s handset sales to slow down due to the increased popularity of SIM-only plans, which would decrease accrued handset revenues over time."

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