New Digi plans shows mettle to meet competition head-on

KUCHING: Digi.Com Bhd (Digi) is currently the first incumbent celco to meet direct competition from webe head-on with its latest Digi Postpaid 80 Infinite and Digi Postpaid 150 Infinite, analysts observe.

According to AmInvestment Bank Bhd (AmInvestment Bank), Digi has unveiled two new postpaid plans - Digi Postpaid 80 Infinite and Digi Postpaid 150 Infinite – which come with unlimited internet quota and are exclusively offered via the celco’s online store for sign-ups and upgrades from existing plans for a limited period up to June 24 this year.

“Following webe’s unlimited internet quota plans at RM79 per month on offer since last year, Digi is currently the first incumbent celco to meet its direct competition head-on,” the research firm said. AmInvestment Bank expected U Mobile Sdn Bhd, which competes in the same affordable market segment, to follow suit soon.

“This development further exacerbates the already highly intense price struggle amongst the mobility sector,” it added.

While management refrained from giving prospective merger and acquisition ( M& A) comments, AmInvestment Bank viewed industry consolidation as another possible option to secure a stronger market position.

The research firm noted that compared to Maxis Bhd’s net debt/earnings before interest, tax, depreciation and amortisation (EBITDA) of two-fold and Axiata Group Bhd’s 1.1-fold, Digi’s low gearing levels position coupled with its proactive funding strategy and Telenor support are likely to allow the group to offer the most competitive bids for new spectrum and potential corporate acquisition.

“However, such likelihood ultimately hinges on pricing and management control, which have proven to be significant obstacles in past proposals,” AmInvestment Bank said.