Lower handset sales sent telco M1's operating revenue slumping in the fourth quarter.

Operating revenue was at $307.9 million for the three months to Dec 31, down 11.1 per cent from a year earlier.

Net profit came in at $43.6 million, down 2.1 per cent.

But full-year earnings rose 1.5 per cent to $178.5 million, lifted mainly by higher handset sales that offset flat mobile services revenue and falling international calls revenue.

Operating revenue for the 12 months was up 7.5 per cent to $1.157 billion.

Revenue from fixed services grew 21.7 per cent to $85.9 million over the year, but was not enough to lift total services revenue, which fell 1.1 per cent to $822.3 million.

M1 added 15,000 post-paid customers in the fourth quarter, bringing its total post-paid base to 1.2 million users.

About 74 per cent of M1's post-paid customers were on tiered data plans that come with smaller data allowances. About 21 per cent of them busted their data caps.

The average subscriber used 3.3GB of data last quarter.

Mobile data contribution to service revenue rose from 35.6 per cent in 2014 to 46.3 per cent last year.

Last year, M1's average revenue per post-paid user was $61.70, down from $62.40 in 2014.

The telco's full-year earnings per share was 19.1 cents, up from 18.9 cents in 2014.

Net asset value per share was 44.1 cents as at Dec 31, up from 42.4 cents as at the end of 2014.

M1 has recommended a final dividend of 8.3 cents per share, bringing its total dividend to 15.3 cents per share for last year. This represents a payout ratio of 80 per cent on net profit, the official minimum stipulated in the telco's dividend policy. In 2014, M1 paid a total dividend of 18.9 cents per share, or a 100 per cent payout ratio.

"For 2015, the board believes the 80 per cent payout is appropriate. We took into consideration the uncertain economic outlook, the upcoming spectrum auction and the investments required to complement our core businesses," said chief commercial officer Lee Kok Chew over a conference call after trading hours yesterday.

Chief executive Karen Kooi said: "It's not a cut in dividend policy as such." She added that M1 also has to foot a bill of $64 million in September for spectrum rights it acquired in 2013.

The upcoming airwave auction will be closely watched by the market, as Singapore's authorities have said they will set aside premium frequency bands for a new telco to enter the market.

Ms Kooi said: "The framework is not yet issued, we think it might be end of the first quarter. In past experience, the auction usually takes place six months before the expiry of the spectrum licence, so based on that we can only estimate it should be around a September time frame."

Earnings were posted after trading hours. The counter closed up a cent at $2.61 yesterday.