WIder network: The 800MHz, along with Digi's existing 1,800MHz and 2,600MHz spectrums will enable it to better serve customers who are increasingly consuming video content.
PETALING JAYA: Digi.com Bhd’s move to analyse digital consumption behaviour, among others, is sensible and has potential to generate new revenue streams, according to a research house.
DiGi has embarked on analysing digital consumption behaviour to better understand its customer base.
CIMB Research, which is maintaining its Hold call on the stock with an unchanged target price of RM5.00, in a research note said the move would not only aid DiGi in terms of its own product design, but would also help to position it as a valuable partner for over-the-top-content (OTT) players, advertising networks and digital publishers to generate new revenue streams.
“We see this as a sensible approach (with minimal risk), leveraging its inherent assets (i.e. deep customer insights) to carve out a position in the digital value chain, though big contributions are unlikely in the near-term,’’ it noted.
The telco at the same time sees huge opportunity in the enterprise market as it is under-represented, and estimates the market’s worth to be RM1bil.
The research house added DiGi believes that it can service this segment now by leveraging on its better and wider network coverage (including new 4G-900MHz network), developing/offering useful and innovative ICT solutions (e.g. iFleet) and improving customer experience at all touch points to address the needs of premium enterprise customers.
“We maintain our Hold call and discounted cash flow (DCF) based target price of RM5.00 (weighted average cost of capital (WACC): 7.0%). Structurally, we see DiGi as a beneficiary of the market heading closer to network parity post 900MHz spectrum reallocation.
“However, we see subdued earnings in the near term given intense prepaid competition,’’ it noted.
DiGi also aims to deliver a better, faster and more convenient digital customer experience across all touch points, via MyDigi app for direct engagement (e.g. self-serve/anytime customer support, personalised offers, etc.), native in-app (e.g. YouTube) upselling at the right time to capture demand and a mobile sales app to accelerate expansion of touchpoints and new SIM activation.
Besides cost benefits, CIMB Research believe proper execution could lead to more effective sales/marketing and market share gains over time.
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