TELCO operator M1's net profit for the first quarter declined 6.9 per cent year on year to S$42.5 million due to higher upfront customer acquisition costs.

Revenue for the three months ended March 31, 2016, was down 12.6 per cent to S$257.6 million, from S$294.8 million one year ago.

The company's earnings per share were down 7.2 per cent to 4.5 Singapore cents, compared to 4.9 Singapore cents a year ago.

M1's service revenue remained stable at S$203.4 million while free cash flow increased 90.8 per cent to S$64.1 million.

Fixed services revenue grew 26.4 per cent to S$24.5 million and now accounts for 12 per cent of service revenue. The increase was driven by growth of 9,000 residential and corporate fibre customers in the quarter, bringing its base to 136,000.

During the quarter, M1 also added 13,000 postpaid customers and 1,000 prepaid customers, bringing the total mobile customer base to 1.94 million as at March 31. Monthly postpaid churn improved to one per cent, compared to 1.1 per cent in the preceding quarter.

Average postpaid smartphone data usage was 3.3 GB (gigabytes) per month in first quarter of 2016, up from 3.2 GB per month a year ago. Average prepaid data usage grew to 1.3 GB per month, up from 0.8 GB per month a year ago.

Mobile data contribution increased 11.8 percentage points year on year to 53.1 per cent of service revenue.

Based on current economic outlook and barring unforeseen circumstances, M1 estimates stable performance for the year 2016.