Digi supports “buy RM10, get RM10” formula

PETALING JAYA - Digi.Com Bhd supports the government's decision to come up with a "buy RM10, get RM10" mechanism for prepaid reloads in relation to the Goods and Services Tax (GST), said its CEO Albern Murty (pix).

"GST as you know, the minister has made an announcement few days ago on the way forward for GST. We are fully supportive of the minister's plans and we're working with the minister to ensure that we are able to work with his plans moving forward," he told reporters after its AGM yesterday, and declined to speak further on the matter.

Earlier this week, Communication and Multimedia Minister Datuk Seri Ahmad Shabery Cheek said consumers can enjoy the purchase of prepaid reloads with the formula "buy RM10, get RM10", as it is "what the people want".

He said the stand would be forwarded during a meeting with heads of telecommunication companies before it is taken to the Cabinet for a decision.

The minister, who was tasked by Prime Minister Datuk Seri Najib Abdul Razak with handling the issue, said the sale of prepaid reloads would be done based on the current price, namely, with the additional 6% GST, until the matter has been decided upon.

Digi has a total of 11.7 million subscribers as of its first quarter ended March 31, 2015 (Q1), of which 9.9 million are prepaid users. Its prepaid segment contributes 70% to total revenue, with RM39 average revenue per user as of Q1.

This year, the company expects low single digit service revenue growth and has maintained its capital expenditure (capex) at RM904 million. Last year, service revenue growth was at 3.3%.

"More than RM900 million was invested in network and IT to support the 'Internet for all' ambition and to make sure that we are able to offer mobile broadband internet to more and more Malaysians. We will continue to invest approximately the same amount in 2015," said its CFO Karl Erik Broten.

He said part of the capex will be spent on expanding LTE coverage, with an aim to increase population coverage from 32% as of end-2014 to 45% by end-2015.

"Digi has a strong balance sheet and very low level of debt, we have no problem funding our expansion with just the cashflow generated from our operations. We of course have different credit facilities that we can optimise at any time," he added.

"For shareholders, we had solid returns last year. We managed to have dividends close to 100% of our profits," he said, adding that its share price appreciated 23% last year.

Digi's share price closed 0.5% lower yesterday at RM6.01 with a total of 15,009,400 shares traded.

In Q1, Digi's net profit fell 1.2% to RM479 million from RM485 million a year ago while revenue rose 4.2% to RM1.79 billion from RM1.72 billion a year ago. - Sundaily