Henrik Clausen, DiGi.Com CEO, shares with The Edge Financial Daily his strategies and dreams for the company.
One of Malaysia’s leading telecommunications player, DiGi.Com Bhd was incorporated in March 1997. With a history of product and service innovation, DiGi provides mobile voice, Internet and broadband services for the Malaysian market. It is part of Norway-based Telenor Group, a leading provider of telecommunications services worldwide with a strong footprint in central eastern Europe and Asia, and a leading Nordic position in mobile, broadband and TV services.
TEFD: What are the company’s competitive strengths and advantages?
Clausen: DiGi has always been known as an innovator, not only within our industry but broadly in Malaysia. We have a history of being game changers —in the way we work, in how we engage with customers, and in collaborating with other players and stakeholders to continuously raise the bar for the industry.
We have a strong perspective on where we need to go to grow our position as a leading mobile Internet and mobile broadband player in the coming years. We will continue to leverage on this innovative strength to ensure DiGi remains a strong forerunner in the industry.
One other key advantage is that we can realise the full value from being part of Telenor Group — a frontrunner in mobile network rollouts in leading markets, with considerable experience in commercialising new technologies, services and coverage.
Specifically, we are leveraging off the competencies and scale of the Telenor Group in rolling out our brand new network, leading the industry in terms of infrastructure sharing experience (tapping one of the first commercial LTE RAN sharing partnerships in the world in Sweden) and gaining from group-wide device sourcing agreements with key device manufacturers and reputable PC manufacturers. The latter enables us to secure the latest devices at the most favourable pricing levels ahead of competition.
What have been the major achievements of the company in the past four years?
Since 2006, we have steadily grown our customer base by 66% to close to nine million customers today. Within three years of launching our 3G broadband and Internet service, we have reached 50% population coverage and made our services available in all key market centres nationwide.
Today, we have 4.6 million customers actively using our mobile Internet and broadband services in their daily lives.
DiGi continues to perform well since 2007. Improved commercial focus and execution resulted in a compounded annual revenue growth in excess of 5% in the four-year period between 2007 and 2010. Our revenue had grown to RM5.41 billion in 2010 from RM3.65 billion in 2006 while profit after tax had increased to RM1.12 billion from RM805.7 million.
Cost-focus efforts continue to show positive results resulting in continuous margin improvement in the past four years. Cash generation remained strong and this augurs well for the company as we continue to expand our business and grow our network substantially going forward.
The company is also committed to become a leader in sustainable and ethical business practices; from our product offerings to the well-being of our employees and the development of the communities that we serve through our products and services.
Since 2005, the company has returned in excess of RM6.8 billion in cash to all our shareholders as a result of our strong capital discipline in ensuring that we generate strong operational cash flow to fund our investment activities. Long-term shareholders would have enjoyed total capital returns close to 300% since 2005.
What are the major challenges your company faced over the years and how did it overcome them? Is there anything else you would have done differently?
DiGi obtained its 3G licence in 2008, two years later than the other players. Despite this, we commercialised our 3G broadband service within a year in 2009. Although a latecomer into the market with less coverage than our competitors and fierce competition, DiGi’s market share in the mobile broadband market in terms of subscribers grew to 14% by the end of March 2011.
Today, we have 50% 3G population coverage and 4.6 million customers using our mobile Internet and broadband services. East Malaysia (Sabah and Sarawak) were among the first states where we launched our broadband service and today we have 25% to 30% new broadband customers here. We plan to have more than 60% 3G population coverage by 2012 and over 80% by 2015.
How is the company positioning itself within your industry? What are your strategies to grow or gain market share?
Our proposition of being the smarter choice for customers remains as we drive to make the Internet accessible to all Malaysians. We believe the Internet is for everyone and the potential is tremendous once Malaysians have a device in their hands together with affordable price plans and relevant services on both small and big screens.
As over 80% of mobile phone owners in Malaysia are non-smartphone users, we would like to make smartphones available to every user with a wider range of phones including Androids and lower the barrier of entry though smart bundling. As part of the Telenor Group, we are able to benefit from group-wide device sourcing agreements with key device manufacturers to secure the latest models at the most favourable price levels, ahead of competition.
To drive further adoption of mobile Internet, we are also looking to provide good user experience, working with local and international partners to push Internet communications and entertainment interface like Facebook SMS, DiGi-Foursquare app, DiGi-Opera Mini browser and our very own homegrown music service, DiGiMusic Play, for smartphone users and DiGiMusic Pluz for non-smartphone users.
Our ambition is to be a top data provider. We believe we are well-positioned to be the customer’s smarter choice with our brand new LTE-ready network which we have commenced and due to be completed in 2012.
With network modernisation, we will have the best network in Malaysia capable of delivering high-speed broadband and next generation services with the introduction of a portfolio of bandwidths to market using smart network capabilities. Our LTE-ready network will ensure faster rollout of best-in-class broadband services to more Malaysians through larger coverage and enable us to deliver substantially higher speeds at affordable prices.
We are also modernising our entire IS/IT platform to deliver a complete high quality Internet and content experience, that will enable more effective integration of third party services to customers, businesses and developers, enabling advanced charging, and billing of data and content services.
On top of this, we are embarking on network collaboration with Celcom deemed as one of the most ambitious telecom partnerships in Asia; sharing of sites and backhaul transmission to ensure both parties are able to carry higher traffic volumes. The ultimate aim of all these initiatives is to ensure our customers continue to enjoy the highest standard of service from DiGi
What are your company’s plans for the future, short-term and long-term? What are your plans to compete in the increasingly globalised environment?
Making the Internet available for all Malaysians is part of our commitment to build a connected Malaysia. Our strategy is to make smartphones more accessible to every user with a wider range of phones across all platforms, and lowering barrier of entry though smart bundling.
Since our launch of 3G in mid-2009, we have proved our ability to grow the mobile broadband market by increasing our subscriber market share to 14% as at end-March 2011 despite a late start, less coverage than the competitors, and fierce competition. We have also shown our commitment to East Malaysia where we took 25% to 30% of new broadband customers despite a late start and substantially lower coverage.
Our tradition has been to provide innovative data pricing for customers, while always ensuring the highest quality of service. This is evidenced in our continuous promotions for Internet access at minimal cost through single sign-on service offering for seamless access to multiple devices, as well as bundling of complementary services such as WiFi.
Combining availability of device and good usage experience is key to accelerating adoption. We are striking the right partnerships and working with partners here and abroad to bring content and applications to customers.
The key priorities in the short to medium term are to expand the mobile Internet and broadband revenue base. We hope to achieve this by differentiating and growing our business in key segments; leveraging on the success of our cost focus initiatives to ensure good margin development going forward, as well as optimising network collaboration and modernisation to strengthen competitiveness. We aim to keep delivering strong returns to our shareholders.
What is your dream for the company? How would you like to see it in 10 years’ time?
My ambition is for DiGi to be the enabler of connectivity, be it voice or Internet, for every Malaysian. With the best network infrastructure, efficient processes and right talent pool, I am confident we are capable of becoming the leading mobile Internet provider in Malaysia.
This article appeared in The Edge Financial Daily, December 27, 2011.
One of Malaysia’s leading telecommunications player, DiGi.Com Bhd was incorporated in March 1997. With a history of product and service innovation, DiGi provides mobile voice, Internet and broadband services for the Malaysian market. It is part of Norway-based Telenor Group, a leading provider of telecommunications services worldwide with a strong footprint in central eastern Europe and Asia, and a leading Nordic position in mobile, broadband and TV services.
TEFD: What are the company’s competitive strengths and advantages?
Clausen: DiGi has always been known as an innovator, not only within our industry but broadly in Malaysia. We have a history of being game changers —in the way we work, in how we engage with customers, and in collaborating with other players and stakeholders to continuously raise the bar for the industry.
Clausen: We have a history of being game changers.
We have a strong perspective on where we need to go to grow our position as a leading mobile Internet and mobile broadband player in the coming years. We will continue to leverage on this innovative strength to ensure DiGi remains a strong forerunner in the industry.
One other key advantage is that we can realise the full value from being part of Telenor Group — a frontrunner in mobile network rollouts in leading markets, with considerable experience in commercialising new technologies, services and coverage.
Specifically, we are leveraging off the competencies and scale of the Telenor Group in rolling out our brand new network, leading the industry in terms of infrastructure sharing experience (tapping one of the first commercial LTE RAN sharing partnerships in the world in Sweden) and gaining from group-wide device sourcing agreements with key device manufacturers and reputable PC manufacturers. The latter enables us to secure the latest devices at the most favourable pricing levels ahead of competition.
What have been the major achievements of the company in the past four years?
Since 2006, we have steadily grown our customer base by 66% to close to nine million customers today. Within three years of launching our 3G broadband and Internet service, we have reached 50% population coverage and made our services available in all key market centres nationwide.
Today, we have 4.6 million customers actively using our mobile Internet and broadband services in their daily lives.
DiGi continues to perform well since 2007. Improved commercial focus and execution resulted in a compounded annual revenue growth in excess of 5% in the four-year period between 2007 and 2010. Our revenue had grown to RM5.41 billion in 2010 from RM3.65 billion in 2006 while profit after tax had increased to RM1.12 billion from RM805.7 million.
Cost-focus efforts continue to show positive results resulting in continuous margin improvement in the past four years. Cash generation remained strong and this augurs well for the company as we continue to expand our business and grow our network substantially going forward.
The company is also committed to become a leader in sustainable and ethical business practices; from our product offerings to the well-being of our employees and the development of the communities that we serve through our products and services.
Since 2005, the company has returned in excess of RM6.8 billion in cash to all our shareholders as a result of our strong capital discipline in ensuring that we generate strong operational cash flow to fund our investment activities. Long-term shareholders would have enjoyed total capital returns close to 300% since 2005.
What are the major challenges your company faced over the years and how did it overcome them? Is there anything else you would have done differently?
DiGi obtained its 3G licence in 2008, two years later than the other players. Despite this, we commercialised our 3G broadband service within a year in 2009. Although a latecomer into the market with less coverage than our competitors and fierce competition, DiGi’s market share in the mobile broadband market in terms of subscribers grew to 14% by the end of March 2011.
Today, we have 50% 3G population coverage and 4.6 million customers using our mobile Internet and broadband services. East Malaysia (Sabah and Sarawak) were among the first states where we launched our broadband service and today we have 25% to 30% new broadband customers here. We plan to have more than 60% 3G population coverage by 2012 and over 80% by 2015.
How is the company positioning itself within your industry? What are your strategies to grow or gain market share?
Our proposition of being the smarter choice for customers remains as we drive to make the Internet accessible to all Malaysians. We believe the Internet is for everyone and the potential is tremendous once Malaysians have a device in their hands together with affordable price plans and relevant services on both small and big screens.
As over 80% of mobile phone owners in Malaysia are non-smartphone users, we would like to make smartphones available to every user with a wider range of phones including Androids and lower the barrier of entry though smart bundling. As part of the Telenor Group, we are able to benefit from group-wide device sourcing agreements with key device manufacturers to secure the latest models at the most favourable price levels, ahead of competition.
To drive further adoption of mobile Internet, we are also looking to provide good user experience, working with local and international partners to push Internet communications and entertainment interface like Facebook SMS, DiGi-Foursquare app, DiGi-Opera Mini browser and our very own homegrown music service, DiGiMusic Play, for smartphone users and DiGiMusic Pluz for non-smartphone users.
Our ambition is to be a top data provider. We believe we are well-positioned to be the customer’s smarter choice with our brand new LTE-ready network which we have commenced and due to be completed in 2012.
With network modernisation, we will have the best network in Malaysia capable of delivering high-speed broadband and next generation services with the introduction of a portfolio of bandwidths to market using smart network capabilities. Our LTE-ready network will ensure faster rollout of best-in-class broadband services to more Malaysians through larger coverage and enable us to deliver substantially higher speeds at affordable prices.
We are also modernising our entire IS/IT platform to deliver a complete high quality Internet and content experience, that will enable more effective integration of third party services to customers, businesses and developers, enabling advanced charging, and billing of data and content services.
On top of this, we are embarking on network collaboration with Celcom deemed as one of the most ambitious telecom partnerships in Asia; sharing of sites and backhaul transmission to ensure both parties are able to carry higher traffic volumes. The ultimate aim of all these initiatives is to ensure our customers continue to enjoy the highest standard of service from DiGi
What are your company’s plans for the future, short-term and long-term? What are your plans to compete in the increasingly globalised environment?
Making the Internet available for all Malaysians is part of our commitment to build a connected Malaysia. Our strategy is to make smartphones more accessible to every user with a wider range of phones across all platforms, and lowering barrier of entry though smart bundling.
Since our launch of 3G in mid-2009, we have proved our ability to grow the mobile broadband market by increasing our subscriber market share to 14% as at end-March 2011 despite a late start, less coverage than the competitors, and fierce competition. We have also shown our commitment to East Malaysia where we took 25% to 30% of new broadband customers despite a late start and substantially lower coverage.
Our tradition has been to provide innovative data pricing for customers, while always ensuring the highest quality of service. This is evidenced in our continuous promotions for Internet access at minimal cost through single sign-on service offering for seamless access to multiple devices, as well as bundling of complementary services such as WiFi.
Combining availability of device and good usage experience is key to accelerating adoption. We are striking the right partnerships and working with partners here and abroad to bring content and applications to customers.
The key priorities in the short to medium term are to expand the mobile Internet and broadband revenue base. We hope to achieve this by differentiating and growing our business in key segments; leveraging on the success of our cost focus initiatives to ensure good margin development going forward, as well as optimising network collaboration and modernisation to strengthen competitiveness. We aim to keep delivering strong returns to our shareholders.
What is your dream for the company? How would you like to see it in 10 years’ time?
My ambition is for DiGi to be the enabler of connectivity, be it voice or Internet, for every Malaysian. With the best network infrastructure, efficient processes and right talent pool, I am confident we are capable of becoming the leading mobile Internet provider in Malaysia.
This article appeared in The Edge Financial Daily, December 27, 2011.
