Telco sector still steadfast despite ongoing challenges
KUCHING: Digi.Com Bhd ( Digi) projects that while market conditions are expected to continue to be challenging, there are still opportunities for growth within the telco sector.
According to its chief executive officer Albern Murty, from an industry perspective, Digi expects market conditions to continue to be challenging, contributed by a variety of factors from intense competition and changing consumer sentiment to forex among others.
“Having said that, we’re a strong believer that there are still opportunities for growth within the sector, if we are relentless in keeping the momentum we’ve build coming into 2017 on these fronts: growing postpaid and prepaid market share while defending core service revenue streams by digitising customer experiences, drive stronger data adoption and monetisation, and remaining solid on managing our cost structures well,” he said.
At the same time, Digi is also focusing on building new digital revenue streams, whether through creating standalone digital businesses, acquisition and investments, digital partnerships or building and monetising digital platforms for the core business.
To date, Digi has invested in a select few startups, working to seize more opportunities in the financial services and Internet of Things ( IoT) verticals, and the upcoming deregulation of other industries also presents opportunities to offer more M2M services to new customers.
“We will be able to share more on this front in the coming months; products and services that we are excited to offer customers and believe will enable them digitally,” Murty revealed.
Murty highlighted that being part of Telenor, one of the world’s major mobile operators shaping digital globally, is a significant advantage for Digi.
Having said that, we’re a strong believer that there are still opportunities for growth within the sector, if we are relentless in keeping the momentum we’ve build coming into 2017 on these fronts: growing postpaid and prepaid market share while defending core service revenue streams by digitising customer experiences, drive stronger data adoption and monetisation, and remaining solid on managing our cost structures well. Albern Murty, Digi CEO
“Leveraging their experience, scale, and transfer of innovation among the 13 markets in the Telenor network means our customers certainly stand to benefit from the innovations we will bring quickly from other markets, including those from Telenor’s acquisition of New York-based Ad Tech company Tapad, and licensed money services business Prabhu Money Transfer in Malaysia.
“These investments will also certainly strengthen our digital play,” he said.
For the foreseeable future, Murty noted that opportunities for growth in Digi’s sector will still center around connectivity and data.
Digi has built a strong foundation to capture these new digital opportunities with the widest 4G+ network footprint nationwide, digitisation of the group’s core business and having invested in new capabilities to support growing digital demand.
“From which, we will be able to monetise data through organic, and global- scale digital innovation and partnerships in tandem with Telenor, and actively pursue new business opportunities in adjacent verticals on mobile to create and drive continuous growth for the business.
“We are at the centre of the new wave of digital disruption, and I am confident, with our solid history in moving fast and smart to adapt to changing landscapes that we can take a strong position as a preferred digital partner for our customers,” he stressed.
All in, Digi have set itself as a strong foundation to capitalise on the opportunities 2017 presents, and looks forward to a year of driving steady performance outpacing the industry, with improved efficiencies and sustainable returns. This is guided by the 2017 guidance for Digi’s service revenue and earnings before interest, tax, depreciation and amortisation ( EBITDA) margin of around 2016 level, in comparison to the actual 2016 figures of RM6.23 billion and 45 per cent, respectively.
Additionally, the 2017 guidance for Digi’s capex to service revenue ratio is 11 per cent to 13 per cent, compared to actual 2016 figures of 12.5 per cent.