Digi has 11.75 million Mobile Subscribers as of 4Q17

Digi reported its Fourth Quarter 2017 (4Q17) financial results yesterday. The Telco now has 11.75 million mobile subscribers at the end of 2017, down from 11.85 million subscribers it had in 3Q17.

As of December 2017, Digi has 8.66 million Internet subscribers (73.7%) with an average monthly data usage of 6.8GB. Some 72.7% (8.4 million) of the subscriber base are smartphone users of which 6.2 million are on 4G LTE. Digi sold 157k devices (including smartphones) in 4Q17, up from 120k in 3Q17.

There are 9.27 million prepaid mobile subscribers with an ARPU of RM34, as of 4Q17. Digi lost 190k prepaid mobile subscribers between October, November and December 2017. It said this is due to “a result of continued prepaid sim consolidation within the industry “. About 6.4 million prepaid users are Internet subscribers, representing 69.2% of the prepaid subscriber base.

Postpaid mobile subscribers now stand at 2.48 million, with an ARPU of RM78 (vs RM77 in 3Q17). Digi added 85k new postpaid subscriptions in the latest quarter.

Digi said it upgraded 4,100 sites (base stations) nationwide with 4G LTE, allowing subscribers to enjoy 4G connections more than 91% of the time and around 10Mbps, at 80% of the time. Digi said 4G LTE and LTE-A network coverage reached 87% and 55% of population backed by over 8,000KM of fiber network nationwide.

The self-care MyDigi app now serves 2.5 million users with an upsell transaction volume of 20.7 million, adding to total transactions of 63.1 million for 2017 .

Key Highlights- Digi in 4Q17:

• Service revenue grew 2.5% q-o-q, while y-o-y decline improved to 2.7%
• Postpaid revenue rose 4.1% q-o-q and 13.5% y-o-y to RM580 million supported by 2.5 million postpaid subscribers
• Prepaid revenue grew 1.5% q-o-q to RM933 million from 9.3% sequentially stronger prepaid internet revenue on the back of lower prepaid legacy revenues
• Internet revenue up 8.3% q-o-q and 21.3% y-o-y over an expanded 8.7 million internet user base
• OPEX to service revenue remained steady at 33.3%, reflecting good cost management and operational efficiency given continued network expansion and aggressive data traffic growth
• EBITDA (earnings before interest, taxes, depreciation and amortization) resilient at RM731 million or 44% margin while PAT levelled to RM360 million
• Ops cash flow remained healthy at RM561 million or 34% margin, from resilient EBITDA and accelerated network deployment in 1H 2017
• Final dividend of 4.6 sen per share or RM358 million, equal to almost 100% payout, delivering FY2017 dividends per share of 18.8 sen

Digi’s CEO Albern Murty said, “We made good progress implementing our strategy in 2017, with our strong operational and financial performance, underscored by high data traction, showing the continued vibrancy of our business in this highly competitive environment. This capped a year where we delivered solid results and shareholder returns of RM1.46 billion in dividends. Digi is well positioned for future growth, and continued sustainable shareholder and customer value creation. We enter 2018 with confidence founded on our investments in next-generation network and digital capabilities to capitalise on opportunities for growth – using technology to connect our customers to what matters most to them.”

Digi expects to improve service revenue growth development with EBITDA sustained at around 2017 levels leveraging on sustainable growth, disciplined cost management and innovating operational efficiencies. Digi’s 2018 guidance is as follows:

• Service revenue growth: flat-low single digit decline
• EBITDA: around 2017 level
• Capex to service revenue ration: 10%-12%