Digi has 12.03 million Mobile Subscribers as of 2Q17, 9k 4G LTE sites

Digi reported its Second Quarter 2017 (2Q17) financial results recently. The mobile operator now has 12.03 million mobile subscribers compared to 11.78 million in 1Q17. The Telco added 254k mobile subscribers between April to June 2017.

Out of 12.03 million mobile subscribers, some 9.74 million are Prepaid subscribers with an ARPU of RM32. Digi added 151k prepaid subscribers in Q2. It had 9.59 million prepaid subscribers as of Q1 (4Q16: 10.2 million).

For Postpaid, Digi added 103k subscribers in Q2. It now has 2.29 million postpaid subscribers with an ARPU of RM78. The Telco had 2.19 million postpaid subscribers in 1Q17 (4Q16: 2.1 million).

There are now 8.31 million active Internet subscribers, representing around 69.1% of its total mobile subscribers. It has 5.3 million mobile subscribers on 4G LTE.

Some 68.6% of its subscribers are smartphone users. Digi said monthly active users on MyDigi mobile app have grown to 2.0 million with over RM13 million up sell transactions made during the quarter.

The Telco sold 150k devices in 2Q17 (1Q17: 108k).

At end 2Q 2017, Digi’s 4G LTE and LTE-A network coverage reached 86% and 45% of the population nationwide (measured at the lowest signal quality of -110dBm), supported by 9,000 LTE sites and 8,000 km of fiber network. The company said it invested additional upfront capex of RM229 million to accelerate LTE 900Mz sites deployment.

Digi Quarter 2 Financials:

Key Highlights (Y-o-Y), according to Digi:

• Resilient service revenue of RM1,453 million on the back of stronger sequential postpaid growth and stabilising prepaid operations, supported by stronger subscriber and ARPU development
• Internet revenue grew 13.3% from last year  and 2.6% q-on-q from a larger active internet subscriber base of 69.1% and 68.6% smartphone adoption
• Postpaid revenue surged 8.9% y-o-y and 3.1% q-o-q to RM536 million, on the back of robust postpaid internet revenue contribution of RM302 million
• Prepaid revenue moderated to RM917 million; with significantly improved q-o-q decline that narrowed to 3.7%, backed by a broader 9.7 million subscriber base and 3.7% y-o-y growth in prepaid internet revenue
• Earnings before interest, tax, depreciation and amortisation (EBITDA) strengthened q-o-q by 0.8% to RM717 million with a 1.0pp increase in EBITDA margin at 46%
• Profit After Tax (PAT) traced to RM359 million while PAT margin stood healthy at 23%
• Healthy second interim dividend of 4.6 sen per share or RM358 million, payable to shareholders on 29 September 2017

Digi’s CEO Albern Murty said, “While this continued to be a challenging quarter for the industry, we have delivered resilient performance to sustain healthy margins and returns, with earnings driven by the strong uptake momentum of our internet and digital services offerings in both our postpaid, prepaid, enterprise businesses, and most recently, our IoT business. What’s behind our performance is our #FreedomtoInternet range of offerings that delivers great value in meeting our customers’ entertainment and roaming needs, and we have stayed focused on delivering on the quality of those live digital experiences on our stronger, more robust network, retail and self-serve touchpoints.”

“Operational excellence remained a core priority for the quarter to ensure long-term sustainable growth, to drive market resilience while delivering relevant affordable services to customers. Importantly, the business delivered resilient EBITDA with 46% margin and sound improvements in cost efficiency, while seeing uplifts in customer base and steady ARPUs.”

The company declared 4.6 sen per share dividend, equivalent to almost 100% dividend payout.

“Our newly minted LTE 900Mhz network will be a significant game-changer for us, enabling our customers to enjoy stronger indoor coverage and better network capacity in delivering what is most important to our customers to fuel future growth,” concluded Albern.