Business Analysis Project

1 January 2017

Notwithstanding the bleak global economic climate with the Eurozone crisis, the Singapore operators are constantly introducing value-added services. The introduction of premium next-generation mobile services, namely LTE-based, should give ARPU a boost even though the take-up rate might be weak. [pic] Source: BMI Figure 1. 6 shows that the operating revenue has decreased for consecutive years since 2008. This could be attributed largely due to the global economic crisis.

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Summary of Singapore Telecommunication Industry Singapore government’s strong commitment to deregulation of the industry has assisted the growth of the telecommunication | |sector and built a competitive telecoms market, aided by its geographical location and excellent infrastructure. Singapore | |is one of the first countries in the world to have a fully digital telephone network and continues to maintain a strong | |positive outlook in this sector.

In 1997, MobileOne Ltd forayed into Singapore’s telecommunications industry and demolished the previous monopoly held by Singapore Telecommunications Ltd. It was subsequently listed on the Singapore Exchange on 4 December 2002. Since its establishment, M1 has gained repute as an integrated communications service provider in Singapore.

Rightly emphasizing on the importance of customers, M1 carries on business with the mission of being “an efficient and totally customer-focused company, achieving the highest satisfaction for our [their] customers, people and shareholders”. M1 has 2 wholly owned subsidiaries, M1 Net Ltd. and M1 Connect Pte. Ltd. M1 and its subsidiaries carry out its main operations in Singapore.

In light of the interdependence of devices, networks, application services and content, M1 recognizes that it needs to diversify from being a pure mobile operator and hence transformed itself in 2007 to a dynamic full-service operator . Operating as a full-service operator ever since, M1 offers a full suite of broadband products, services and managed solutions. With its high-speed fiber network solutions, businesses benefit from faster speeds to improve productivity and reduce costs.

This could have invariably contributed to the price reduction of handsets and increase in promotional activities to attract customers. Investors prefer a firm with a higher GPM, which indicates stronger efficiency. Noteworthy is M1’s NPM being consistently higher than StarHub. SingTel maintained its position at 23%. The ability to sustain the highest profit margin and also maintain a consistent revenue growth clearly places SingTel as the market leader in the telecommunications industry.

However, it maintaind its stead state despite the Euro crisis. Therefore it is expected that M1 would increase its debt-to-equity ratio, with the economic recovery. Risk declines as the ratio increases as the company’s ability to cover its interest increases. On the other hand, Singtel is the lowest with 8. 8, and it is unclear if it can still afford to leverage upwards without affecting its credit rating. EPS is net profit per share. It reflects the company’s ability to add value to shares and is the most important metric in determining profitability. It is also a major component of another important metric, price per earnings ratio (P/E). The higher the ratio, the more money the company is making.

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