Malaysia-based mobile operator Digi reported a decline in profit for Q4 2019 due to increased network and marketing expenses, as a drop in prepaid sales offset wider service revenue growth.

Net profit fell 6.6 per cent year-on-year to MYR353 million ($86.7 million), which it attributed to higher network investments and marketing costs associated with drives around post-paid contracts and device bundles.

Service revenue was flat at MYR1.49 billion, with solid growth from post-paid and digital offsetting declines from prepaid and interconnect.

In a statement, Digi said: “We close 2019 with good momentum, delivering steady financial and operational performance by having executed well on our five-year strategy. Moving forward into 2020 and the era of 5G, we remain focused on driving sustainable growth, efficiency and digital transformation for our customers, as we upgrade our network to deploy next-generation technologies.”

Numbers
Post-paid sales increased 9.6 per cent to MYR731 million, with internet and digital revenue up 9.9 per cent to MYR933 million, accounting for 64.9 per cent of service revenue. Prepaid revenue fell 9.7 per cent to MYR736 million as its mix continued to shift from voice to data.

Subscriber numbers were mixed, with post-paid up 9 per cent to 3.03 million and prepaid down 6.8 per cent to 8.25 million. The operator closed 2019 with 8.9 million 4G subs versus 7.9 million in Q4 2018.

Post-paid ARPU rose 1.4 per cent to MRY72, while prepaid was flat at MYR30. Monthly data usage per user jumped to 13.8GB from 9.9GB.

The operator said its total 2019 capex of MYR753 million, (13.3 per cent of service revenue), supported the expansion of its LTE-A network to 72 per cent of the population from 65 per cent in 2018.

Its 2020 guidance forecasts service revenue to be flat or dip by a low single-digit, while capex will remain at the same level as 2019.