The Company has committed to invest up to RM900 million in capital expenditure this year, meanwhile Celcom plans to invest RM1.2 billion and Maxis RM1.3 billion mostly on 4G.
Digi has just released its first quarter earning for 2016, and the numbers look flat, admittedly the company declares tough environment due to market conditions and stiff competition for the impending result. For the quarter under review, the company’s service revenue was at RM1,560 million, a drop from 2015 of RM1,700 million with profits also taking a slight dip, earnings before interest tax depreciation and amortisation (EBITDA) stood at RM704 million against RM708 million last year.
In comparison, Maxis which released its financial result just a couple of week earlier, posted higher revenue but a massive drop in subscribers. The telco lost about 400,000 subscribers over the quarter and 1,000,000 over the year, however it chalked up higher sales of RM2,126 million with RM1,156 million in EBITDA. When liveatpc.com inquired about the loss, Morten Lundal CEO Maxis was not too concerned “there are always 3-5 million subscribers rotate and tend to move around due to promotional activities. Of course if you lose to many it will impact revenue, but the focus now for Maxis is back to getting the base with new postpaid and prepaid plans which we just launched”. Over 1 million customers have signed up their new MaxisOne postpaid plan.
Back to Digi, moving forward how will the old kid in the block perform for this year? Infrastructure on 4G LTE is the main concern, customers on the network are not to pleased with the roll-out for the longest of time. There are pockets of areas where the service level is still much to be desired, but Digi is not sitting on its laurels. Having just completed 73% of population coverage the company has 2.9 million on 4G while 7.9 million internet users.
Digi increased its LTE sites in Klang Valley, Johor Bahru and Kota Kinabalu, and grew its fibre network to more than 4,100km. The Company has committed to invest up to RM900 million in capital expenditure this year, meanwhile Celcom plans to invest RM1.2 billion and Maxis RM1.3 billion.
Digi’s Chief Executive Officer Albern Murty attributed “Our focus on network quality has enabled more customers to better enjoy our new innovative 360o internet offerings. We now have a stronger proposition for customers who would have never considered Digi’s services in the past given our solid history of providing competitive prepaid services, an area where we continue to remain resilient.”
The telco launched new prepaid and postpaid plans that gives more data quota to its customers and even free video streaming for popular channels including YouTube and iflix. Digi boasts to have higher segment of the youth market who are constantly connected and demand the best internet service, unfortunately this segment are also sticklers when comes to spending. Which is reflected in the Average revenue per unit,(ARPU) a measurement used to check on yield generated from per user, the yellow brand does not come close to the green brand, a clear indication the latter has stronger postpaid customers, which all three would like to have.
While Digi’s strategy to attract new customers worked, keeping them and ensuring the internet experience offered is of quality, more needs to be done. Gaining at the expense of another is not permanent if you don’t keep up to the customers demands, they will eventually leave to another operator who promises a better deal. And it also pointless if your base are not heavy consumers who just want to enjoy free deals, as this will not bode well to your bandwidth with higher traffic and leave long term customers with constant congestion.
