Malaysia’s third largest mobile player Digi.Com (Digi) reported a small drop in its profit for Q1 due to the expiry of a tax benefit, but double-digit growth in data revenue helped offset the continued decline in voice revenue.
The operator’s net profit fell 1.2 per cent to MYR479 million ($133.6 million) during the quarter as a result of the absence of a tax benefit from a year ago. Its EBITDA margin dropped to 43 per cent from 45 per cent in Q1 2014.
Overall revenue for the quarter was up 4.2 per cent to MYR1.79 billion. Voice revenue declined by 6.8 per cent to MYR916 million, but data revenue expanded 17.7 per cent and now accounts for 42.3 per cent of service revenue, up 5.6 points from the same period last year.
Digi CEO Albern Murty said the company has made significant improvements in its network performance and coverage and now offers a wider range of affordable smartphones bundles, including choices under MYR200.
Digi, which has a 26 per cent market share, expanded its 3G coverage to 87 per cent of the population, while boosting its 4G footprint to 33 per cent population coverage, Murty said.
The operator added 270,000 subscribers to expand its user base to 11.7 million. Mobile internet users increased by 30.6 per cent to 6.6 million. Smartphone ownership of its user base rose to 53.2 per cent from 38.4 per cent a year ago. Nearly 20 per cent of smartphone users have LTE-enabled devices.
Blended ARPU was down 2 per cent to MYR46, while prepaid ARPU dropped nearly 5 per cent to MYR39.
The increased demand for smartphone bundles boosted the cost of goods and services by 7.2 per cent to MYR551 million.
Murty said Digi plans to keep capex at the same level as last year — MYR904 million — to continue driving internet growth. Q1 capex expanded 6 per cent to MYR463 million from a year ago.
Its guidance for the full year forecasts low- to mid-single-digit revenue growth and EBITDA margins to be maintained at last year’s level.