Digi has recorded another stellar quarter in revenue despite tough market environment, the company in its latest filing recorded revenue of RM1.56 billion. Earnings improved for the quarter at 4.4% to RM735 million against Q1 2016 of RM704 million or a 44% margin anchored by solid growth in postpaid and stronger data monetisation efforts.
Digi’s postpaid service revenue registered a record growth of 9.8% year-on-year and 6.1% quarter-on-quarter while its postpaid subscriber base strengthened 10.3% year-on-year to almost 2.0 million subscribers. Postpaid internet subscribers increased to 1.6 million, representing 81.7% of the company’s postpaid subscriber base and contributed to higher postpaid internet revenue of RM239 million (Q1 2016: RM207 million). Despite challenged by the industry’s aggressive internet quotas and heavy discounts, Digi’s postpaid ARPU strengthened to RM82 over a larger subscriber base
Digi’s CEO Albern Murty said, “In spite of intense competition in the industry, we continued to build a strong postpaid portfolio by delivering relevant smart plans and digital services on a high-quality 4G LTE network, and innovations that put customers in charge of their digital experience. Customers have full control in managing their accounts, deciding on their own internet usage or sharing with others, and more at their fingertips. This comprehensive proposition has unlocked growth opportunities for us with postpaid customers who are increasingly confident we can deliver this kind of value to them.”
During the quarter, the company intensified its network service quality and coverage, where its 4G LTE and 4G LTE-A network footprint now stands at 76% and 34% of the population nationwide respectively. This has resulted in higher usage of internet services among customers, with increased data traffic to 27% on its 4G LTE network compared to 6% a year ago. Active internet subscribers rose steadily to 8.0 million, representing 64.5% of total subscriber base alongside an increase in smartphone adoption to 62.0% while 4G LTE subscribers grew 395,000 to 3.3 million. This fuelled internet revenue to increase to 36.1% of total service revenue for the quarter.
The company has been focused on digitising and fueling innovation within its core telco business to propel organic growth while developing new capabilities to unlock opportunities in the adjacent digital ecosystem.
According to Albern, a key part of digitising its core business is revolutionising the entire customer experience across its touchpoints. “We plan to have 80% of our customer interactions through digital channels by 2020; where each offering or service will be mobile-first, easy to use, fast, personalised and relevant to the individual customer no matter where or how they engage with us.
“We have begun building these innovations into our robust self-serve MyDigi app, which puts our customers in complete control of their accounts from not only paying for their own but friends and family bills to enabling roaming services, and more recently with our mobile service agent app that has eased customer registrations at retail stores to 20 seconds per transaction. We will focus on introducing more of these innovations in the next few quarters to continuously improve on the quality of our customers experiences.”
While enabling growth from its core business, the company also made notable progress in building new capabilities to begin exploring digital opportunities beyond telco with the formation of Digi-X. The new division is mandated to create standalone digital businesses, develop new business streams through acquisitions and investments, deepen digital partnerships and footprint in the startup ecosystem, and build and monetise digital platforms for the core business. The establishment of Digi-X was a major move in Digi’s digital playbook, and the company plans to take giant leaps forward in this area in months to come.
