Malaysia mobile Telco, Digi.com Berhad reported its Third Quarter (3Q19) financial results last Friday.
According to Digi, a recent speedtest report (Ookla) in September 2019 reveals that “network performance significantly improved and ranked amongst #1 or #2 across 13 states in Malaysia with our customers enjoying an average data download speed of 30Mbps across 4G LTE and LTE-A network coverage.”
Ookla is the company behind Speedtest.net, a well known platform for Internet speedtest around the world.
Digi claims it has “Optimised spectrum and capacity for better and faster 4G network” but no further details were shared. 4G LTE and LTE-A coverage remains at 90% and 70% respectively, no improvement since June 2019.
Based on data sighted by MalaysianWireless, Maxis remains at the top for overall download speeds across Malaysia followed by Digi at second place and Celcom Axiata at third. MalaysianWireless is unable to publish the Ookla report due to confidentiality reasons at the time of writing as the report is not public.
As of September 2019 (3Q19), Digi has 11.33 million mobile subscribers compared to 11.36 million subscribers at the end of June 2019 (2Q19). Digi lost 34k mobile users between July, August, September 2019.
There are 8.34 million prepaid subscribers as of September 2019, down (-101k) from 8.44 million it had as of June 2019 (2Q19). Prepaid ARPU remains unchanged at RM29 since 1Q19. The Telco claims that “the prepaid market remained challenging with continued intense competition and aggressive entry level postpaid offerings,”
Postpaid customer base stood at 2.99 million, up (+67k) from 2.93 million (June 2019). Postpaid ARPU is higher (+RM1) at RM71 vs the previous quarter. Digi said Postpaid ARPU rose to RM71 “alongside expansion of subscriber base and ARPU uplifts from our existing postpaid customers, despite adversely challenged by intense competition in the entry level postpaid segment.”
There are now 9.36 million Internet subscribers representing 82.6% of the total mobile subscriber base. About 79.9% of these Internet subscribers are on prepaid and the remaining postpaid. Out of the total Digi Internet subscribers (9.36 million), some 8.7 million are using the Digi 4G LTE network.
Digi Internet users consumed an average 12.9GB data in 3Q19 compared to 11.4GB in 2Q19.
About 1.97 million subscribers does not use Digi Internet services.
The Telco reveals that 84.2% of the subscriber base are smartphone users. Digi sold 118k devices including smartphones in 3Q19 (vs 102k in 2Q19).
Key Financial Highlights (Y-o-Y), according to Digi:
| RM million | 3Q18 | 2Q19 | 3Q19 | Q-o-Q | Y-o-Y | 9M18 | 9M19 | 9M-9M |
| Total revenue | 1,600 | 1,509 | 1,549 | 0.8% | -2.4% | 4,835 | 4,620 | -4.8% |
| Service revenue | 1,475 | 1,451 | 1,464 | 0.9% | -0.7% | 4,442 | 4,356 | -1.9% |
| EBITDA | 750 | 752 | 725 | -3.6% | -3.3% | 2,293 | 2,200 | -4.1% |
| EBITDA margin | 47% | 49% | 46% | -2.1pp | -0.5pp | 47% | 48% | 0.4pp |
| PAT | 393 | 414 | 362 | -12.6% | -7.9% | 1,163 | 1,142 | -1.8% |
- Service revenue improved marginally with 0.9% q-o-q growth while y-o-y decline narrowed to 0.7%,
supported by 12.0% postpaid revenue1 growth and 10.8% internet revenue growth y-o-y - Prepaid revenue trimmed 11.4% y-o-y to RM740 million, with declines continuing to narrow as a result of the ongoing revenue mix shift from voice (45%) to internet (55%). This effect will drive more sustainable returns for the long-term, and stabilisation of this segment.
- OPEX remained flat y-o-y aided by non-recurring cost effects, in tandem with ongoing investments to expand network coverage and capacity to deliver solid customer experience in the quarter
- EBITDA traced to RM725 million or 46% margin and Profit After Tax (PAT) moderated to RM362 million or 23% margin; after accounting for fluctuations on non-recurring cost effects although underlying growth trajectory improved sequentially
- Ops cash flow remained solid at RM606 million or 39% margin after investing another RM119 million capex, as planned this quarter, with cumulative capex of RM548 million invested for network enhancements
- Net debt to EBITDA ratio healthy at 0.8 times while conventional debt over total assets trimmed to 13%, remaining within the Shariah threshold
- Declared third interim dividend per share of 4.5 sen or RM350 million, payable to shareholders on 19 December 2019
Digi’s CEO Albern Murty said, “We have stayed focused on delivering our strategy this quarter, and see that our efforts connect more Malaysians on our services. We will be persistent in providing affordable, widespread connectivity to more people and businesses while we run our business efficiently. Staying focused on introducing innovative products to market and making inroads into the B2B segment as part of our long-term growth.”
