Digi reported its Third Quarter 2017 (3Q17) financial results today revealing that it now has 11.85 million mobile subscribers.
About 72% of its subscribers or 8.54 million are mobile Internet users consuming an average 6GB in 3Q17 (5GB in 2Q17). 69% of these users or 5.7 million are on the 4G LTE network. Some 71% Digi subscribers are smartphone users.
Despite its large base of Internet users, some 3 million Digi Prepaid subscribers and 246,000 Digi Postpaid users are not active on Digi’s mobile Internet network.
Digi lost 178k mobile subscribers between July 2017 to September 2017, it had 12.03 million subscribers in 2Q17. There are now 2.4 million postpaid subscribers and 9.46 million prepaid subscribers. It lost 281k prepaid users but added 103k new postpaid users in the same period.
Commenting on the decline of its prepaid subscriber base, Digi said “While prepaid market conditions remained challenging, exacerbated by declining legacy prepaid voice and messaging services, our focus on accelerating prepaid internet growth and solidifying our Malaysian subscriber base resulted in stabilised prepaid revenue quarter-on-quarter at RM919 million while year-on-year decline narrowed.”
Digi’s Prepaid ARPU during the quarter was RM32, postpaid at RM77.
It sold some 120k devices in 3Q17 including smartphone and tablets. Monthly active MyDigi users grew to 2.2 million while the volume of upsell transactions during the quarter surpassed 17.7 million.
The Telco’s 4G LTE coverage footprint now stands at 87% nationwide and 49% for the LTE-A network. Digi says it continues to offer a consistent average Internet speed of 10Mbps, 80% of the time. It invested an additional RM152 million in capex (capital expenditure) for the quarter to intensify LTE 900Mz sites deployment and nationwide network expansion for 4G LTE. It claims to have the widest LTE-A network coverage nationwide.
Key Highlights according to Digi:
| RM million | 3Q17 | 2Q17 | Q-o-Q | 3Q16 | Y-o-Y |
| Service revenue | 1,476 | 1,453 | 1.6% | 1,554 | -5.0% |
| EBITDA | 727 | 717 | 1.4% | 775 | -6.2% |
| EBITDA margin | 46% | 46% | Steady | 48% | (1.6pp) |
| PAT | 385 | 359 | 7.2% | 438 | -12.1%) |
- Service revenue increased 1.6% (Q-Q) sequentially to RM1,476 million primarily due to our all-time high postpaid revenue, stabilised prepaid revenue, and overall internet revenue growth
- Internet revenue grew 15.6% y-o-y and 8.3% q-o-q to RM690 million from an expanded internet subscriber base of 72.0%, who more than doubled their average data usage this year to 6Gb each
- Postpaid revenue rose 13.9% y-o-y and 3.9% q-o-q to RM557 million, uplifted by a 30.9% y-o-y growth in postpaid internet revenue to RM326 million
- Prepaid revenue stabilised, growing 0.2% q-o-q to RM919 million, backed by solid prepaid internet revenue growth of 8.7% q-o-q and 4.6% y-o-y to RM364 million
- OPEX to service revenue remained steady at 33.5%, well managed amidst network expansion and data traffic growth
- Earnings before interest, tax, depreciation and amortisation (EBITDA) strengthened 1.4% q-o-q to RM727 million or 46% EBITDA margin, supported by sequentially stronger service revenue and efficient cost management
- Profit After Tax (PAT) climbed 7.2% q-o-q to RM385 million while PAT margin stood healthy at 25%
- Ops cash flow increased 17.8% q-o-q to RM575 million or 37% margin, the strongest level in the last four quarters on the back of stronger EBITDA and efficient capex management
- Declared healthy third interim dividend of 4.9 sen per share equivalent to RM381 million, payable to shareholders on 22 December 2017
Digi’s CEO Albern Murty said, “This was a strong quarter for us, reflecting that we have been disciplined to execute well against our business priorities to deliver earnings growth, steady margins with lower expenses. These results were driven primarily by organic growth from our strategy for the past several quarters, centred around providing customers a quality experience on the best 4G Plus network, complemented by great value offerings.”
“New and existing customers are drawn to our services that put them in full control of their digital experiences. In this quarter, we have enabled customers the #FreedomToInternet with our new line-up of Digi Postpaid Family plans that offer multiple SIMS for one account, our online exclusive Postpaid IFINITE plans with limitless internet and calls, and new enterprise business offerings. We feel confident, from these past months, that we are on the right track and that our strategy is yielding results. We will continue our investments in technology, product innovation and a refreshed retail and self-serve experience for our customers, while progressively digitising our business in our ambition to be a preferred digital partner for all Malaysians and businesses alike.”
