FLAT GROWTH
But telco confident of converting more prepaid subscribers to postpaid, says CFO
STIFFER competition and the challenging market environment will impact Digi.Com Bhd’s earnings this year.
STIFFER competition and the challenging market environment are expected to result in Digi.Com Bhd posting a flat growth in service revenue for the financial year ending December 31, 2019.
Chief financial officer Inger Gløersen Folkeson said the company was seeing room for growth in the conversion of prepaid customers to postpaid, adding that Digi’s postpaid subscribers made up 25 per cent of the total.
“We will be driving the service revenue growth through the prepaid to postpaid conversion,” said Folkeson after Digi’s annual
general meeting, here, yesterday.
Digi had 11.3 million subscribers as of March 31.
She said earnings before interest, taxes, depreciation and amortisation was likely to be a low single-digit growth due to higher efficiency in sales and distribution channels and digitalisation.
“We are improving our processes and revamping the technology operating model, sales marketing processes and others to drive down our costs,” she added.
On its capital expenditure, Digi is allocating between 11 and 12 per cent of its capex-to-service revenue to be used for network capacity and other improvements.
They include improvement to the coverage and modernisation of network function virtualisation and information technology infrastructure to support MyDigi app capabilities and others.
Its 4G LTE (Long-Term Evolution) population coverage now stands at 89 per cent and LTEAdvanced at 67 per cent. They are supported by 84,000km fibre optic network.
Last year, Digi had set aside RM685 million, or 11.6 per cent, for capex -to-service revenue.
For the first quarter, the company’s net profit dropped 11.6 per cent to RM341.5 million from RM386.11 million a year ago , as prepaid service revenue and number of subscribers in the segment slipped.
Revenue slipped to RM1.51 billion from RM1.63 billion.
Prepaid service revenue fell to RM769 million from RM891 million while the number of subscribers was lower at 8.4 million against 9.19 million previously.
Despite lower group net profit and revenue, Digi declared a dividend of 4.3 sen per share, payable on June 28.