Digi reported its First Quarter 2018 (1Q18) financial results today. The mobile operator has 11.76 million mobile subscribers as of 1Q18 (vs 11.75 million subscribers in 4Q17). Active Internet subscribers now stand at 8.61 million, lower compared to 8.66 million users it had in 4Q17.
Digi has 2.57 million Postpaid subscribers, up from 2.48 million subscribers it had in 4Q17. It added 91k Postpaid subscribers between January, February and March 2018. Despite the increase in Postpaid subscriber base, its Postpaid ARPU dropped to RM77 in 1Q18 from RM78 in 4Q17.
During the quarter, Digi said it continued to “register positive take-ups” from Digi Postpaid Family RM150 and RM250 plans from both new and existing customers.
There are now 9.19 million Prepaid subscribers as of 1Q18. The Telco lost 80k Prepaid subscribers in the quarter. It had 9.27 million Prepaid subscribers in 4Q17. Prepaid ARPU was at RM32 (vs RM34 vs 4Q17). Digi said the drop in Prepaid subscribers and its ARPU was due to “continued impact from prepaid to postpaid conversions.”
As of March 2018, Digi’s 8.61 million active Internet subscribers are consuming an average monthly data usage of 7.2GB per user.
About 73.6% of Digi subscribers are smartphone users where some 6.6 million these users or 77% are 4G LTE users. Digi said 67% of Internet data traffic via its mobile network are supported on 4G-LTE and LTE-A.
Digi sold 137k devices including smartphones in 1Q18 (vs 157k in 4Q17).
In 1Q18, Digi invested RM181 million capex or 12.2% of service revenue to expand 4G LTE and LTE-A network footprint to 88% and 57% respectively, and over 8,200KM of fiber network nationwide
Similar in 4Q17, the self-care MyDigi app still has 2.5 million active users users however upsell transaction volume dropped to 19.2 million in 1Q18 compared to 20.7 million in 4Q17.
Key Highlights of 1Q18 according to Digi:
| RM million | 1Q18 | 4Q17 | Q-o-Q | Y-o-Y |
| Service revenue | 1,483 | 1,513 | (2.0%) | 0.7% |
| EBITDA | 741 | 731 | 1.4% | 4.2% |
| EBITDA margin | 46% | 44% | 1.9pp | 1.2pp |
| PAT | 352 | 360 | (2.2%) | (5.6%) |
- Service revenue grew 0.7% y-o-y to RM1,483 million on the back of solid postpaid growth and stronger data monetisation from prepaid
- Internet revenue surged 22.5% y-o-y and 1.9% q-o-q to RM761 million over an 8.6 million active internet subscriber base, each using an average 7.2Gb of data a month
- Postpaid revenue grew 13.7% y-o-y and 1.9% q-o-q to reach RM591 million, from rising postpaid internet revenue contributions of RM368 million
- Prepaid revenue trimmed 6.4% y-o-y and 4.5% q-o-q to RM891 million; with yearly and sequential decline narrowing aided by stronger prepaid internet revenue contributions despite continued levelling of legacy prepaid revenues
- Earnings before interest, tax, depreciation and amortisation (EBITDA) strengthened 4.2% y-o-y and 1.4% q-o-q to RM741 million or 46% margin
- Profit After Tax (PAT) moderated to RM352 million due to higher depreciation while PAT margin remained at 22%
- Healthy first interim dividend of 4.9 sen per share or RM381 million, payable to shareholders on 29 June 2018
- 2100Mhz spectrum band re-issued for a tenure of 16 years until 1 April 2034 for a one-time fee of RM118.4 million and fixed annual fee at RM50 million per year
Digi’s CEO Albern Murty said, “We managed to improve margins and returns, with earnings driven by the strong uptake momentum of our internet and digital services offerings across our postpaid, prepaid, enterprise and new digital businesses. Our sharper focus in delivering innovative range of products, services and solutions enabled us to provide better value and experience in meeting our customers’ internet needs. This is supported by the sound investments we have made to accelerate the strategic deployment of our spectrum portfolio to improve the quality, performance and capacity of our 4G Plus network, while cost discipline and operational efficiencies have and will continue to be part of the way we create value.”
