Digi expects flattish service revenue growth in 2019

Digi is back in the Securities Commission

KUALA LUMPUR: Digi.Com Bhd is looking to grow its postpaid subscriber base through prepaid conversion, as it expects a flattish year-on-year service revenue growth for 2019.

Speaking after the group’s annual general meeting, Digi chief financial officer Inger Gløersen Folkeson said the flattish service revenue growth expected this year was mainly due to a 33% year-on-year lower interconnect rate. 

Essentially, the interconnect rate is paid by another service provider to Digi, when calls between two different service providers are made. 

Currently, the interconnect rate is 1.96 sen per minute, a decline from 2018’s rate of 2.92 sen per minute.

As of March 31, 2019, Digi has 11.3 million subscribers.

Postpaid subscribers make up 25% of Digi’s customer base.

For 2019, Digi has allocated a capital expenditure of an estimated 11% to 12% of its capex-to-service revenue ratio, earmarked for network capacity and improvement as well as coverage improvement and modernisation.

The capex guidance does not include spectrum payments.

In 2018, Digi spent RM685mil on capex, which made up to 11.6% of its capex-to-service revenue ratio.