SINGAPORE -- MobileOne Ltd (M1) today announced its unauditedgroup financial results for the year ended 31 December 2006.Profit after tax for the year increased by 2.2% year on year to S$164.6 million while freecash flow rose by a significant 48.5% to S$242.7 million. Earnings per share (EPS)improved 1.2% to 16.6 cents while EBITDA margin on service revenue went up 1.4percentage points to 48.6%.

For 4Q06, M1 achieved growth in overall revenue as well as key revenue segmentsagainst the previous quarter. Operating revenue increased by 6.2% due to higher servicerevenue and handset sales. Postpaid and prepaid revenue improved by 2.7% and 3.3%respectively. Total international call revenue grew by 8.0% while total internationalretail minutes rose 11.8%.

Based on the results, M1’s Board of Directors has recommended a final tax-exemptdividend of 7.5 cents per share. Taking into account interim dividend of 5.8 cents pershare already paid out, this represents a total dividend payout ratio of 80% for 2006 anda yield of 5.9% based on last Friday’s closing price.M1 will also propose a capital reduction exercise to return approximately S$221.6million to shareholders. Details of the proposed capital reduction, which will enable thecompany to return surplus capital to shareholders and achieve a more efficient capitalstructure, have been disclosed in a separate announcement today.M1 had 1.337 million customers at the end of the year, made up of 809,000 postpaidcustomers and 528,000 prepaid customers. With Singapore’s mobile penetrationexceeding 100%, M1 continued to focus on driving usage from existing customersespecially in the non-voice segment. Non-voice services contributed almost 21% ofaverage revenue per user against 19.4% the previous year.

Neil Montefiore, Chief Executive Officer of M1, said : “We achieved 2.2% growth innet profit for FY2006 under challenging market conditions. There will be furtherchallenges and also opportunities in 2007. We expect to see continued growth in datarevenue following the launch of the M1 Broadband service in December 2006. In thenear term, the prepaid segment may have potential for growth with the expected increasein tourist arrivals and foreigners working in Singapore as well as the introduction ofmore value-added services previously available only to postpaid customers. We will alsocontinue to leverage on our partnership with Vodafone to extend the range of wirelessbusiness products and services for the enterprise segment.”

In a separate release:

SINGAPORE, 22 January 2007 - MobileOne Ltd (M1) announced today that it isproposing a capital reduction exercise to return up to a maximum of approximatelyS$221.6 million to shareholders.

The proposed capital reduction is in addition to the FY2006 final dividend of 7.5 centsper share announced today.

M1 conducted its first capital reduction exercise in 2004 when approximately S$115.7million was returned to shareholders. Another approximately S$120.8 million wasreturned to shareholders when M1 declared a special dividend of 12.2 cents per share forFY 2005.

Commenting on the rationale for proposing a second round of capital reduction, M1’sChief Executive Officer, Neil Montefiore, said : “This is in the best interests of both thecompany and shareholders. It will allow the company to achieve a more efficient capitalstructure and enable the return of surplus capital to shareholders. At the same time, itwill enable each shareholder to maintain approximately the same proportionateshareholding in the company. Returning cash by way of a capital reduction will alsoimprove the company’s return on equity and earnings per share going forward.”

Approximately 99.8 million existing shares (or about 10% of total issued share capital)will be cancelled in the proposed capital reduction, involving the cancellation of oneshare for every 10 shares held by shareholders as at a books closure date which will bedetermined by M1. By way of illustration, a shareholder holding 1,000 shares as at thebooks closure date will have 100 shares cancelled and will receive S$222.00 in return.

The exact number of shares to be cancelled for each shareholder may be reduced by arounding-up (where applicable) of the number of M1 shares held by the shareholderafter the cancellation, to the nearest multiple of 10 shares. Such rounding-up is to enableshareholders to hold M1 shares in multiples of 10 shares after the capital reduction. Theactual number of shares to be cancelled may vary depending on the number of M1shares held by the shareholder.

For each M1 share cancelled, shareholders will receive S$2.22 based on the averageclosing prices of M1 shares traded on the Mainboard of the Singapore Exchange from 11January 2007 to 17 January 2007 (both dates inclusive). This is provided that theresultant aggregate cash distribution payable to the shareholder pursuant to the sharereduction shall be adjusted by rounding down any fractions of a cent to the nearest cent,where applicable.

MobileOne Ltd. (M1) (Singapore: MONE)