What's up with M1?

Robert Clark
06 Mar 2009

To lose one leader is unfortunate, but to lose two seems downright careless.

M1’s chairman Lim Chee Onn resigned last week after eight years in the post, just seven weeks after the sudden exit of CEO Neil Montefiore, who had piloted the company since its 1997 debut.

The two departures come in the middle of Singapore’s NBN broadband tender, and with M1 running a clear third to SingTel and StarHub in mobile.

M1 says Lim’s resignation was part of a reshuffle by Keppel, a major shareholder, where he stepped down as executive chairman.

But Montefiore’s departure has not yet been explained. It certainly came as a very large stone in the placid pond of Singapore telecoms, which has seen only one CEO change in the last dozen years.

While CFO Karen Kooi warms the CEO seat as a search is conducted, M1’s core problem is its inability to compete with its rivals’ bundled offerings.

Nomura Singapore said in a research note that Montefiore’s youth mobile strategy had built a stable business, but one with little growth potential.

That’s where the NBN comes in. The NBN tender, which provides for retail access to the new fiber infrastructure, promises to reshape Singapore’s telecom landscape.

M1 last year made its first foray into retail broadband. In announcing Montefiore’s resignation the company referred explicitly to its future as a “multiple play operator”. Even a 5%-10% share of the broadband market offers a healthy increment to revenue.

The ability to play retail in broadband with a bundled package is the upside the company needs. That’s a certainty, no matter who is picked as CEO.

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