M1

(Bloomberg) -- M1 Ltd.’s owners are exploring optionsincluding a sale of Singapore’s smallest mobile operator as thecity state gears up for a new entrant into the wireless market,according to people with knowledge of the matter. Keppel Corp., Axiata Group Bhd. and Singapore PressHoldings Ltd. are working with an adviser to conduct a strategicreview of their combined 61 percent interest in M1, the peoplesaid, asking not to be identified because the discussions areconfidential. The carrier, which offers fixed-line and mobileservices to more than 2 million customers, has a $1.3 billionmarket value. The potential sale of Singapore’s third-largest carriercomes as the city state prepares for the roll-out of a fourthmobile operator with TPG Telecom Ltd. slated to begin wirelessservices in 2018. The regulator has said it wants to introducemore competition in the city state to bring down phone bills andimprove services. Temasek Holdings Pte has studied ways for Keppel, aportfolio company, to divest non-core assets including its stakein M1, as part of a regular review of investments, peoplefamiliar with the matter said in January last year. Executivesat the state investment company had also discussed thepossibility of Keppel paring its stake in office landlord KeppelREIT. Malaysian wireless carrier Axiata has a 29 percent stake inM1, while Keppel has a 19 percent holding and Singapore Pressowns 13 percent, according to data compiled by Bloomberg. Arepresentative for Axiata didn’t immediately respond to an emailseeking comment. Representatives for M1, Keppel and SingaporePress didn’t immediately respond to Bloomberg queries. Plans to sell Singaporean telecom stakes have made littleprogress. Shareholders in the second-largest operator StarhubLtd. were weighing a sale in July, with Qatar’s Ooredoo QSCseeking to sell its indirect stake in the carrier, peoplefamiliar with the matter said at the time. The city state’s current telecom operators includingSingapore Telecommunications Ltd. and StarHub are likely to seeaverage revenue per user decline by as much as 16 percent in thenext five years, according to OCBC. TPG Telecom may gain mobilerevenue market share of about 6 percent by 2021, the researchfirm said Friday.

M1 is now trading at 7.3x EV/Trailing EBITDA, compared to Starhub at 8.15x and Singtel at 15.4x.