Digi expects revenue to remain flat on competition

KUALA LUMPUR: Digi.com Bhd expects its revenue to remain flat this year as competition in the telecommunication industry intensifies.

The company said that it would also be focusing on growing its Internet revenue including its the e-wallet and Internet of Things (IoT) services this year.

“On the topline growth, we expected it to be flat or a lower digit decline for this year as we expect the competitive environment to continue.

“However, we expect our margin to remain as a result of the continuous efforts to reduce operational expenditure,” chief financial officer Nakul Seghal told reporters after Digi’s shareholders meeting here yesterday.

For the first quarter ended March 31, Digi posted a 3.5% increase in profit to RM386.11mil from RM373.11mil a year ago.

Revenue for the quarter rose by 0.7% to RM1.63bil driven by Internet services.

Nakul said that the firm strategy of expanding its Internet revenue has been fruitful, which saw a double-digit growth in the first quarter of 2018.

In the first quarter, its Internet revenue grew by 22.5% to RM761mil with more than 8.6 million active Internet subscriber base, each using an average of 7.2GB data a month.

“We want to grow our Internet revenue, which is a more sustainable business for us going moving forward,” he said, adding that that Digi.com is increasing its effort to developed its fintech services including e-wallet and IoT.

“It is not profitable yet, but we need to gain traction and we believe that this would increase our presence in the small and medium-sized enterprises segment, which has been a segment that we are least represented in the past,” Nakul said.

On the 700 megahertz spectrum tender, Nakul said that Digi has applied for the band and that it hoped to get it as it is part of the group’s growth plan in the Internet segment.

“The low band spectrum is important as you get into data-centric to capture growth opportunity in the future.

“That is probably something that is on the horizon in the next few quarters,” he said.

He pointed out that the Digi group has a good mixed of low and high band spectrum.

Shares in Digi closed 14 sen higher to RM4.74 yesterday.