DiGi’s RM900mil capex bet on 3G and LTE

• DiGi to grow its HSPA+ 3G coverage to 86% from the current 80%
• Launches two new offerings to leverage strong mobile Internet momentum

MALAYSIA’S No 3 mobile operator DiGi.Com Bhd will be investing up to RM900 million (US$275 million) in capital expenditure (capex) this year, the bulk of which will be used to widen its third generation (3G) and Long Term Evolution (LTE) network coverage.
 
Last month, DiGi declared its 2014 capex will be more than last year’s. However, it did not reveal the actual figure.
 
“This [RM900 million] will be invested towards increasing our HSPA+ 3G coverage to 86% population coverage (versus 80% population coverage now), growing our LTE footprint to 1,500 sites and expending our fibre network,” chief operating officer Albern Murty told a media briefing in Shah Alam on March 6.
 
He however did not disclose how many LTE sites DiGi has right now.
 
At RM900 million, the capex it is significantly lower than what DiGi’s rivals Maxis Bhd and Celcom Axiata Bhd have committed to invest.
 
Digital News Asia (DNA) recently reported that Maxis is looking at a RM1.1-billion (US$336-million) capex this year, while Celcom has a capex plan of not more than RM1 billion (US$305-million).
 
However, when looking at capex per subscriber basis, DiGi is spending RM81 per subscriber on capex, as compared with the RM85 per subscriber for Maxis and RM76 per subscriber for Celcom. (The amount is derived after taking the 2014 capex and divided it by its 2013 subscriber base).
 
Quiet on P1 deal
 
When asked if the company is in talks or keen to acquire Green Packet Bhd subsidiary Packet One Networks (Malaysia) Sdn Bhd (P1), Albern maintained its position that the company does not comment on speculation.
 
However, he said that the company is always open to ideas of collaborations.
 
“We are continuously looking at different options and opportunities. However, we can’t comment on any specific company,” he said.
 
Currently, the market is speculating that DiGi, YTL Group and Telekom Malaysia (TM) are amongst parties keen to take over beleaguered P1. There were also news reports that suggest that TM and DiGi are the front-runners in such a deal.
 
Although Albern declined to reveal whether DiGi sees the need to add more bandwidth to the 2600MHz spectrum (by virtue of an acquisition or via a spectrum-sharing exercise), he stressed that the company is committed to expanding its LTE coverage with its existing 2x10MHz bandwidth of the 2600MHz spectrum.
 
New plans unveiled
 
During the briefing, DiGi also unveiled two new offerings for its mobile subscribers: A weekly prepaid mobile Internet package and new smartphone plans.
 
With the new prepaid offering, existing and new prepaid customers can now enjoy unlimited Internet surfing and social messaging by subscribing to a weekly package that costs between RM3 and RM7.
 
For RM3, customers get unlimited social messaging on WhatsApp and WeChat, as well as unlimited Internet surfing via Opera Mini. For RM5 to RM7, customers get 100 MB and 250MB of data quota (excluding Opera Mini) respectively.
 
DiGi’s postpaid plan is somewhat similar to its prepaid offerings, offering unlimited Internet surfing via Opera Mini. Besides that, the postpaid plan – which comes with the commitment options of RM50, RM78, RM108 and RM148 a month – is also bundled with free Norton Mobile Security protection for customers.
 
[RM1 = US$0.30]
 
“The idea of unveiling these plans and packages is that there are many market segments in this space,” said DiGi chief marketing officer Christian Thrane.
 
“We have the savvy mobile Internet user, who may find our postpaid plans or the RM7 weekly prepaid plan attractive.
 
“We also have a big group of casual surfers, those who surf once a week or so, as well as a big group of people who are still not Internet users. So, the RM3 or RM5 plan may be suitable for them,” he added.
 
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