Digi announced that it now has 11.25 million mobile subscribers as of March 2019 compared to 11.66 million as of December last year. The Telco reported its First Quarter 2019 (1Q19) financial results on Monday.
As of the latest quarter, Digi lost 409k mobile subscribers between January, February and March 2019. In comparison, the Telco lost just 87k mobile subscribers in the whole of 2018.
A huge number of Digi prepaid subscribers have either ported to another Telco or terminated their mobile number. The Digi prepaid subscriber base are now down to 8.4 million (1Q19) from 8.86 million subscribers it had at the end of December 2018 (4Q18). It lost 459k prepaid subscribers during the 1st 3 months of this year.
Early last month, a number of Digi Dealers threatened to boycott the sale of Digi SIM cards and prepaid top-ups. It is learnt that the prepaid margin has been cut drastically to 3.2% from the initial 6%, effective March 1.
Pictures of retailers showing “No to Digi” and “Digi products temporarily not available” at their stores have gone viral on social media.
Digi has since said that they have resolved the matter with the dealers.
ARPU for prepaid dropped to RM29 (1Q19) from RM30 in 4Q18.
Digi said it added 50k new postpaid mobile subscribers between January-March this year. There are now 2.86 million postpaid subscribers versus 2.8 million as of 4Q18.
APPU for postpaid remains stable at RM71, unchanged since 4Q18.
Out of its 11.25 million subscribers, more than 2.2 million (20%) mobile subscribers did not use any Digi Internet plans in 1Q19. There are 9 million (80%) mobile Internet subscribers out which 8 million are on 4G LTE.
Digi’s mobile Internet customers consumed an average 10.2GB in 1Q19 compared to 9.9GB in 4Q18.
The latest data indicate 81.4% of its mobile subscriber base are smartphone users (vs 79.6% in 4Q18).
The Telco revealed that it sold less devices in 1Q19 with 88k units compared to 122k devices in 4Q18.
Digi 4G LTE coverage now stands at 89% (no improvement since September 2018, 3Q18) while LTE-A coverage increased 2% to reach 67%.
The MyDigi app monthly active users climbed to 3.2 million with 21.0 million upsell transactions for the quarter on the app.
Digi 1Q 2019 Financials:
| RM million | 1Q19 | 4Q18 | Q-o-Q | Y-o-Y |
| Total revenue | 1,509 | 1,674 | (9.9%) | (7.4%) |
| Service revenue | 1,441 | 1,482 | (2.8%) | (2.8%) |
| EBITDA (boi) | 723 | 740 | (2.3%) | (6.7%) |
| EBITDA margin | 48% | 44% | 3.7pp | 0.5pp |
| PAT | 366 | 378 | (3.2%) | (5.2%) |
Key Highlights (Y-o-Y), according to Digi:
- Service revenue at RM1,441 million fuelled by solid postpaid and internet revenue growth
- First interim dividend of 4.3 sen or RM334 million, payable to shareholders on 28 June 2019
- Internet revenue grew 13.3% y-o-y to RM862 million
- Postpaid revenue1 grew 13.5% y-o-y to RM671 million over a larger 2.9 million subscriber base
- Prepaid revenue moderated to RM769 million; more importantly, prepaid subscriber mix shifted to 52% internet vs. 48% voice base setting the foundation for sustainable growth for the future
- OPEX reduced 0.4% y-o-y from solid efficiency initiatives, opex to service revenue healthy at 35.2%
- EBITDA stood at RM723 million or 48% margin
- Profit After Tax (PAT) at RM366 million with 24% margin
- Ops cash flow moderated 6.6% y-o-y but improved 8.8% q-o-q to RM555 million or 37% margin due to investments in IT and network upgrades
- Net debt to EBITDA ratio healthy at 0.8 times while conventional debt over total assets steady at 21%, well within the Shariah threshold
In the quarter, the company invested RM168 million capex for IT and network capacity upgrades, fibre network expansion, and deployment of Network Function Virtualisation (NFV). Network population coverage now stands at 4G LTE: 89% and LTE-A: 67% supported by 8,500km of fibre network.
Digi’s CEO Albern Murty said, “We have focused on building a strong postpaid portfolio and wide range of internet offerings to give customers full control over their digital experience. We also made strategic decisions to shift the subscriber mix and channel strategy for our prepaid business to drive growth from internet uptake and reduce dependency on legacy voice services. Despite market competition, we are positioning Digi for long-term growth by improving prepaid sustainability, driving further postpaid growth, investing in our network, and creating digital platforms to add value for customers while executing a disciplined strategy focused on growth, efficiency and digital transformation.”
