DiGi to invest up to RM900 million in 2014 to boost coverage

SHAH ALAM, Mar 7, 2014: DiGi.Com Bhd has allocated up to RM900 million as capital expenditure for its mobile service operator, DiGi Telecommunications Sdn Bhd, to further expand and strengthen its network position in 2014, said its chief operating officer Albern Murty.

“This spend will be invested to increase our high-speed packet access (HSPA) and 3G coverage to 86% of population coverage, growing our LTE footprint up to 1,500 sites, as well as expanding our fibre network,” Albern told the press conference after launching DiGi’s new network and internet offerings here yesterday.

The RM900 million capex is the largest amount being allocated in recent years, he added.

In the past two years, Albern said, DiGi has invested about RM1.5 billion in capex to modernise its network and expand its coverage footprint nationwide, in order to grow its mobile internet customer base further and to address the high data usage needs with 4G LTE services.

The network transformation plan saw DiGi swapped every electronic part in more than 5,500 sites with new equipment, expanded its HSPA and 3G network to more than 80% population coverage, as well as increased its own and jointly built fibre network to more than 3,200 kilometers nationwide.

In total, DiGi provides mobile voice, data and internet services to 11 million customers in Malaysia, out of which 6.7 million are mobile internet users.

Claiming to be the fastest growing mobile internet service provider in the country, DiGi saw its internet revenue grow by 47.5% to RM1.2 billion. Internet revenue contributed 20% to DiGi’s total service revenue of RM6.1 billion.

Recapping the guidance for 2014, Albern said DiGi aims to deliver revenue growth of 4-6%. Besides, the group also hopes to sustain its earnings before interest, taxes, depreciation and amortization (Ebitda) margin, as well as increase the capex to revenue ratio slightly while maintaining a healthy operating cash-flow margin.

Meanwhile, Albern said DiGi is still evaluating the setting up of a business trust at both the board level as well as the management level.

“We won’t be able to provide any updates yet and we have no further comment for now. We are exploring on it and we have to see how we would actually do the business trust,” he said.

According to CIMB Equities Research, DiGi may adopt a business trust structure that enables it to unlock its cash per share by 40 sen to 60 sen.

On the merger and acquisition deal with Green Packet Bhd’s stake in WiMax operator Packet One Networks (M) Sdn Bhd (P1), Albern said DiGi is always interested in looking out for different opportunities and potential partnerships.

It was reported by a local business newspaper that Green Packet will reveal the successful buyer of P1 soon, while the shortlist of prospective buyer includes DiGi.com, YTL Power International Bhd and Telekom Malaysia Bhd.

Albern however declined to confirm or deny the the news report.

On another note, chief marketing officer Christian Thrane said the strength of DiGi’s new network allow the company to take a holistic approach in innovating products that fit its customers’ usage patterns and making these products easily accessible across the country.

DiGi has on yesterday launched two new internet offerings, a weekly prepaid mobile internet package and a postpaid smartphone plans. Going forward, the company will also focus on delivering affordable device and service offerings to drive internet uptake.

The weekly package for prepaid users has a price range of RM3, RM5 and RM7, while the new DG SmartPlan has a choice of RM50, RM78, RM108 and RM148 a month.