MNP a concern for DiGi despite attractive dividends

PETALING JAYA: Blue chip cellular operator DiGi.Com Bhd’s dividend yields continue to be attractive, and the company has proven to be resilient but the impact of the newly introduced mobile number portability (MNP) on its margins is a concern, analysts said.

The government recently introduced the MNP that allows mobile phone users to switch companies without changing their cellular numbers.

OSK Investment Research said DiGi had performed well in the past nine months compared with its peers despite the tough operating environment.

DiGi posted RM3.58bil in revenue for the nine months ended Sept 30 (FY08), up 12% from the previous corresponding period.

“DiGi’s nine-month results were in line with consensus and our expectations,” said OSK analyst Jeffrey Tan.

“We are encouraged by the continuing strong elasticity effect from its value positioning strategies, driving the decent sequential revenue growth.” he said.

Tan, who has a “buy” call on the stock, noted that a special 78 sen per share dividend had been declared by DiGi, in keeping with the company’s plan to return excess cash.

“Our FY08 (forecast) has been left unchanged, while FY09/10 forecasts have been trimmed by 1% to 2%.

“Hence, our target price falls to RM25.90 from RM26.30,” Tan said.

But DiGi remains OSK’s top choice for exposure to Malaysian telco stocks.

“We believe DiGi lacks catalysts despite a dividend yield of 8% as we are concerned about the impact of mobile number portability-led competition on its margins,” an analyst with CIMB Research said.

The CIMB analyst has a “neutral” recommendation on the stock with a 2008 target price of RM24 and RM27 for 2009.

DiGi chief executive officer Johan Dennelind had said the company remained cautiously optimistic of its growth momentum.

“Although we expect increased price competition to exert pressure on core tariffs and margins, we believe over time higher voice and advanced data usage will lead to continued revenue growth,” Dennelind said in a recent statement.

“We see opportunities to further generate revenues in the medium to long-term with the newly introduced MNP and the impending launch of our third generation mobile broadband offerings early 2009.” he added.

On the special dividend payout, Dennelind said: “The decision to proceed with the special dividend was taken in view of DiGi’s strong cashflow.

“This is also a logical step forward toward fulfilling our commitment to have an optimal capital structure.”

DiGi’s share price fell 5.86% to close at RM20.90 yesterday, which analysts attributed to poor market sentiment

URL: http://biz.thestar.com.my/news/story.asp?f...31&sec=business

I'm so frustated with the new security system implemented in Online Reload in OCS using credit card.

Registation requires verification. Add Number also needs that too. Verification means that DiGi CS needs to call for verification.

Previously, no such thing if I remembered correctly. DiGi is my 2nd number by the way and the receiption is pretty poor during office hours at my working place!

After great deal of hassle and tussle of getting registered with DiGi Online Reload vis OCS using credit card, it's getting more frustated now when I wanted to add new numbers to the enabled feature in OCS.

To add new number, I have to fax in a copy of my IC and credit card. My curiosity arises from the necessary of redundant documents which have been submitted earlier during registration.

The new Online Reload lower my rating on DiGi service!

This post has been edited by David83: Jan 2 2009, 08:55 PM

It's referring to 60-seconds charging block. Calls are charged in 60-seconds block; meaning

Call duration less than and up to 60 seconds: 1 block
Call duration between 61 and 120 seconds: 2 blocks

So on and so forth ...

U-mobile is only telco offering per second billing.

That is 36 cents/min.

DiGi uses 30-second block; meaning it'll be 18 cents per block.

No matter how, they still charge for your call. It depends on how they're charging you; i.e 30-second or 60-second block.

Charging block is basic measurement unit like SI unit - metre for distance/length, kg for mass and etc.

Let's say the call I made is 85 seconds.

According to 33 cents/min from Hotlink and Hotlink uses 60-sec charging block, I'll be charged for 2 blocks of 66 cents (2 blocks of 60-sec).

If using DiGi of 36cents/min with 30-sec charging block, I'll be charge for 54 cents (3 blocks of 30-sec).

That's why you need to understand your plan well.

I'm quoting some examples. They may not valid for your call plan.

Calls longer than 1 minute as per advertised rate will be charged using this simple equation: Used block x Rate per block

Of course you need to convert all the necessary information to fit into the equation.

Since this is DiGi thread, will use 30-sec charging block and 36cents/min (= 2 blocks) call rate to illustrate as an example:

1. Call made up to 30 sec: 1 block x 18 cents/block = 18 cents
2. Call made up to 1 min: 2 blocks x 18 cents/block = 36 cents
3. Call made up to 90 sec: 3 blocks x 18 cents/block = 54 cents

Odd examples:

1. Call duration is 24 sec: 24 sec is within 30-sec block, so 1 block x 18 cents/block = 18 cents
2. Call duration is 54 sec: 54 sec is using 2x30-sec block, so 2 block x 18 cents/block = 36 cents

There're just simple maths. Hope this could help.

This post has been edited by David83: Jan 3 2009, 10:23 PM

Different plan has different rate.

The general rate for DiGi prepaid is 36cents/min but its FnF rate is 15cents/min.

As I said earlier, you need to understand your plan well.

This post has been edited by David83: Jan 3 2009, 10:24 PM

DiGi prepaid has a full range of Super series plan. Personally, I think it's getting more confusing!

I prefer simplicity. That's why I'm still on Chat Plus plan.

Go to DiGi website and select accordingly either Postpaid or Prepaid.

D20 and D50 are referring to DiGi Postpaid plans.

Sure you don't prefer my answer. DiGi is my 2nd line and I seldom use it.

Don't get annoyed.

It depends on your usage. Postpaid usually has monthly commitment fee.

When happy first launched, it's not per second billing. They fine-tuned it later; few weeks after launch.

I have a hunch that balance update for DiGi prepaid is not as real time as compared to Hotlink or Xpax. There's a delay window time.

What're you trying to ask?

Seems like they have been pushing the date of launching 3G.