Digi reported its fourth quarter 2015 (4Q15) financial results last Friday. The Telco closed the year with 12.1 million (12,125) subscribers up from 11.7 million subscribers in 3Q15.
It added 450k subscribers in the quarter. Digi now has a higher number of prepaid subscriber base at 10.3 million (10,285) from 9.9 million (9,899) in 3Q15. There are now 1.84 million postpaid subscribers.
Postpaid ARPU is at RM80 (down from RM81 in 3Q15) while prepaid ARPU is unchanged at RM38 for the last three quarters.
About 76% of Digi Postpaid subscribers are smartphone users, while 78% (1.44 million) are Internet users. There are 6 million prepaid Internet users.
Overall, Digi has close to 7.5 million Internet subscribers representing 61.9% of its total subscriber base. Some 19% or 2.3 million of its Internet subscribers are 4G LTE users.
Digi sold 102k smartphone and devices in the quarter. 59.2% of its total subscribers are smartphone users.
LTE-Advanced (LTE-A) population coverage is currently at 28.8% nationwide, likely measured at the lowest signal quality at -110dBm. The new LTE-A network is now available in key market centres such as Klang Valley, Penang, Perak, Kuantan (Pahang), Johor Bahru, Kota Kinabalu (Sabah) and Kuching (Sarawak). Digi’s LTE-A network has a theoretical download speed of 150Mbps
As for the 4G LTE network, Digi said it provides “consistent high quality” network with 80% of the coverage within -100dBm signal quality. Digi’s 4G LTE network covers more than 65% of the population coverage nationwide, measured at the lowest signal quality of -110dBm.
In the final quarter of 2015, the company’s postpaid internet revenue rose 14.5% while postpaid service revenue strengthened 3.4% year-on-year. Similarly, prepaid internet revenue grew 9.7% from last year to RM338 million on the back of higher prepaid internet penetration at 58.9%.
Albern Murty, CEO of Digi said, “We have kept focused on delivering a strong network and quality customer experience across the board. In particular, we placed equal emphasis on expanding coverage and access to our network, and on the consistency and quality of our services. This made it significantly important to densify our network and overlay a large number of sites to dual band, 1,800Mhz and 2,600Mhz, to ensure customers experience high-speed internet consistently with improved outdoor and indoor coverage wherever they are. The overlay also enabled us to offer 4G LTE-A to customers, and provide greater capacity and capabilities for us to support next-generation services that our customers are increasingly consuming.”
“With customers in mind, we diversified and improved our range of innovative digital services, offering them worry-free data access and giving them more good reasons to use the internet. These included the best music streaming with Digi Music Freedom, access to on-demand entertainment with iflix, free photo cloud storage on Capture, direct-billing on Google Play Store, self-service transactions on its MyDigi apps, among many more offerings,” said Albern.
Service revenue for the quarter remained resilient at RM1,587 million on the back of stronger demand for Digi’s 4G-LTE enabled smartphone bundles and incremental subscriptions from sim-only packages across postpaid and prepaid services although challenged by intense price competition. Earnings before interest, tax, depreciation and amortisation (EBITDA) and profit after tax (PAT) leveled to RM701 million and RM382 million in the quarter as a consequence from “strong competition, elevated cost from weak Malaysian currency and higher cost from high speed data network expansion”.
Moving forward, Albern said Digi will remain focused on growth and “value creation”, with growth coming from its existing telco business, and driving data momentum from current and new digital services and verticals.
“We have an ambition to be our customers’ favourite partner in digital life, and will continue building on our robust foundation to drive future internet revenue. With a strong emphasis on customer experience, our focus in 2016 will be to enable easy enjoyment of next generation services and advanced, innovative digital applications for our customers with competitive smart device bundles and plans made widely available through our network of service touchpoints in stores or online. Our leadership position on 4G LTE, capturing data growth and monetisation of data from different digital verticals will be key to driving our business forward,” said Albern.
Digi invested an additional RM288 million in Capex in Q4 2015, with a cumulative investment of RM904 million (FY15) as planned to support its aggressive 4G LTE and 4G LTE-A network deployment nationwide. It plans to maintain its 2015 Capex level in 2016 to continue driving internet growth.
Digi announced that it will pay a fourth and final net dividend of 4.9 sen per ordinary share equivalent to RM381 million or 100% payout ratio to shareholders on 25 March 2016. A total of 22.0 sen dividend per share or an equivalent to RM1,711 million has been declared for the full year 2015.