Slugfest: Maxis vs Digi in Q3 2016: Page 3 of 4

Profitability:
 

It appears that both Maxis and Digi were able to grow their earnings significantly during the third quarter, despite the intense competition that are affecting their topline.

During the period, Maxis third quarter and nine months net profit jumped by 19.76% and 18.72% to RM503 million and RM1.51 billion, respectively.

Meanwhile, Digi's third quarter rose 10.53% at RM438.38 million, however, nine months profit declined by 6% at RM1.26 billion.

Besides growing their net profit, both companies were also able to improve their Ebitda (earnings before interest, tax, depreciation and amortisation) margin signficantly.

Subsciber base:

Based on the table above, it showed that how much Digi has changed over the years. More than a decade ago, Digi was the third biggest mobile operator in the country with a market share of approximately 25-27%. Today, it leads the market.

A big part of the company's success in securing the pole position in the overall subscriber base is due to its efforts in growing the prepaid business. Between third quarter 2016 and third quarter 2015, Digi managed to increase its prepaid susbcriber base by 370,000. In contrast, Maxis loss 890,000 prepaid subscribers during the same period.

While Maxis' prepaid subscriber is one a declining trend, the company seems to be encouraged by the traction they are seeing on Hotlink FAST. The new prepaid service was rejuvenated in April this year, after the company offered its users free 8GB of data per month for life. (2GB per weekend).

Today, the company has more than 1 million Hotlink FAST users. It added that the prepaid service managed to attract higher value prepaid Internet users, as its mobile Internet ARPU (average revenue per user) is 20% higher than the market.

Next page: Capital expenditure (who's spending more on the network?)