KUALA LUMPUR: Digi.Com Bhd is expecting another a flat growth in its service revenue for the financial year ending December 31, 2019 amid stiffer competition and a challenging market environment.
Chief financial officer Inger Gløersen Folkeson said the company only sees room for growth in service revenue in the conversion of prepaid customers to postpaid, adding that Digi’s postpaid subscribers makes up 25 per cent of the total subscribers.
"We will be driving the service revenue growth through the prepaid to postpaid conversion,” she told reporters after Digi’s annual general meeting here, today.
Digi has a total of 11.3 million subscribers as of March 31, 2019.
Inger said for earnings before interest, taxes, depreciation and amortisation (EBITDA), the company is expecting a low single-digit growth due to higher efficiency in sales and distribution channels and digitalisation.
"On operational efficiencies to drive down our costs, we are continuously improving our processes as well as revamping the technology operating model, sales marketing processes and others,” she added.
Digi is allocating 11 per cent to 12 per cent of its capital expenditure (capex)-to-service revenue which will be used for network capacity and improvement.
This also include coverage improvement and modernisation in terms of network function virtualisation, IT infrastructure to support MyDigi app capabilities and others.
In the first quarter ended March 31, 2019, Digi has invested RM168 million capex for IT and network capacity upgrades, fibre network expansion and deployment of Network Function Virtualisation.
Its 4G LTE population coverage now stands at 89 per cent, LTE-A at 67 per cent and supported by 8,400km of fibre network.
Last year, Digi set aside RM685 million or 11.6 per cent for capex -to-service revenue.
Digi's first quarter net profit decreased 11.6 per cent to RM341.5 million, from RM386.11 million recorded in the same quarter a year ago, as prepaid service revenue and number of subscribers in the segment dropped.
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 in the segment was lower at 8.4 million versus 9.19 million.
Despite lower group net profit and revenue, Digi declared a dividend of 4.3 sen per share for the first quarter, payable on June 28.
