DiGi’s vision is to be a company that is always “Changing the

Game” by constantly pushing boundaries, defining new

standards, and ensuring continuous improvements in all parts
of business.

Their mission is “Deliver Internet For All as part of our

commitment to building a connected Malaysia - enabling
access to mobile internet services and applications by offering
customers the right combination of devices and value pricing,
as well as the best usage experience”.
In Malaysia Digi is known as a booming industry which bask
stability growing and virtually. DiGi operate in an industry in
Malaysia which is totally controlled by Malaysian authorities.
Aside that, almost all DiGi's business has fierce competition
either directly or indirectly with other contenders in the
industry. Examples of direct competition are with Maxis which
is a subsidiary of “Axiata” company, Celcom, and TuneTalk.
DiGi’s indirect competitions with companies like P1, TM,
Umobile and others.
DiGi is provides different services including post paid, prepaid, DiGi internet, DiGi
business, international services, mobile lifestyle and personal insurance coverage.
Post paid service gives an opportunity to its customers to enjoy and select several
types of call plans. This service allows customer to be connected with the things
that are important in their life or to be connected with their loved one. This service
also allows them to enjoy free SMS, MMS, and calls. This service allows customer
to enjoy it even though they are using prepaid services.
 According to analysts, DiGi.com Bhd. could face difficulty to exceed its revenue growth guidance if the
outlook for the telecom industry remains soft.
The research conducted by RHB indicates that despite the fact that DiGi wants to compete its competitors,
but environment still become an issue. For that reason to overcome its competitors, DiGi should rely on the
market condition. However, DiGi is still successful to challenge both Maxis and Celcom if comparing their
growth rate. To maintain its performance, DiGi has to follow market and continue its growth which was 4
percent to 6 percent in 2013 and the growth was 5 percent in the first half of 2013.
 MARKET COMPOSITION
Business Line Market Composition
Voice Services Main Rival

Fixed Line Telephone

Telekom, Maxis

Mobile Cellular Maxis, Celcom, UMobile

Data Services Dial-Up Internet Telekom, Maxis, Celcom

(Narrowband/
Wired Broadband) Maxis, Celcom, P1

Mobile Internet Telekom, Maxis, Celcom, P1, UMobile

FINANCIAL
Service revenue grew by 4.1% to RM6,131 million
(2012: RM5,891 million), benefiting from increased
usage on a larger HSPA+ enabled 3G network, and
improved network quality. This gain cushioned
the dilutive effects from mobile termination rate
(MTR) revisions in the year.
Service revenue from prepaid increased 5.2% year-
on-year, with significant 70.5% growth on internet
revenue as voice revenue remained flat at 0.7%
compared to the previous year.
Service revenue from postpaid improved 1.4%
year-on-year, aided by 27.7% growth in internet
revenue which substantially cushioned a 5.0%
voice revenue decline.
The favourable growth on internet
revenue and mobile internet subscribers
was an encouraging testimony to the
relentless focus on driving internet based
subscriptions and usage campaigns, aided
by the improved data network. The
availability of affordable smart phones
and tablets was an additional factor in
increasing internet take-up, especially
among prepaid subscribers. At end 2013,
the number of smart phone users on the
network stood at 38.1% (2012: 26.4%) of
the total subscriber base.
Data revenue grew by RM263 million to
RM2,104 million (2012: RM1,841 million),
comprising 34.3% of total service revenue.
 Internal environmental analysis

Internal factors of any firms are those factors

that can be easily controlled by such firm under
consideration.
Examples of such factors are Research and
Development (R&D), financials, marketing
strategies employed and reorganizations … etc.
Financial reports

 According to the annual report by DiGi, the company has

firmly worked to establish better team to build up in all services
to deliver high quality internet to subscribers.

 DiGi was capable of introducing new networks in order to

make future growth.

 DiGi is working hard to attract more customers to use its

internet network and become a leading company in this respect.

 Aside from that, the company planned and works on

delivering internet networks to all areas around Malaysia.
 Cont

 Also, the quality of the internet is another strategy of DiGi that

may attracts more customers if they try hard to perform the quality
of their networks through smart devices with lower price.

 DiGi Telecommunications SdnBhd's net profit for the third

quarter ended Sept 30, 2014 (quarter three) rose 8.52 percent to
486.92 million ringgit from 448.71 million ringgit a year ago.

 Revenue for the period rose 3.32 percent to 1.76 billion ringgit
from 1.70 billion ringgit a year ago.
 marketing strategies

 To attract more customers, in 2010 DiGi conduct

studies on Malaysian and they realized that with any
promotional sales they will be loyal so Spend 1 ringgit and
call rates drops to 0.12ringgit (12 cents) for the remaining
day to all Malaysian networks.

 At the end of 2006, DiGi re-launched its brand

campaign after 18 months of absence with Yellow
Coverage Fellow (or more officiously called, YCF) through
a series of television commercials.
 Cont

 Forbes which ranks world companies has listed DiGi

among the best and the most innovative company for 2014 with
99 others; however, DiGi was the only telecom company in Asia
in the list.

 Among Asian companies in all sectors, Japan comes first

with 8 companies while China as the second Asian country
comes after Japan with 6 companies. In the list India has 5
companies and Malaysia, Singapore and Indonesia follows Japan
and china with only a single company.
 DIGI RESTRUCTURING PROGRAM

 DiGi Telecommunications SdnBhd, the country's third-

largest mobile operator, has undergone a group restructuring,
which see changes in roles for two key executives and the
creation of a new position, as part of its next phase of
transformation to boost future growth.

 Looking ahead, we believe the key changes that we are

putting in place will enhance the way we go-to-market,
strengthen our overall ability to deliver on our 'Internet For All'
mission and lead our employees through the next phase of our
evolution.
ANALYSIS ON COMMUNICATIONS
MARKETING MIX
 Product

 In Malaysia, telecommunication providers offer a wide range of

services from the basic 2G voice call services, short messages,
multimedia messages, caller ringtones and video calls. Clearly all
telecommunication providers offer the similar products therefore
there are very little products differentiation can be drawn.

 The trend in telecommunication technology is moving to 3G,

3.5G currently. 4G services will be introduced to Malaysian market
by early 2011.
 price

 All telecommunication players provide same services with

slight differences in prices that does not exceed ceiling price
determined by Ministry Of Communication Malaysia.

 Maxis, DiGi and Celcom, the three major players in

Malaysia, creatively market the same services with different
packaging.

 Malaysian telecommunication industry is in healthy stage

and providers have relatively higher margin to survive despite
the saturation of market penetration.
 Place

Customer Service Outlets

 Selangor having the largest share of subscriber base
accounting to 24.7 percent.

 Johor has the second largest share of subscriber (13.7 percent).

 and followed by Kuala Lumpur (9.7 percent).

 The statistic still apply for now as Klang Valley (consist of

Selangor and Kuala Lumpur) has the biggest population and most
developed area in country due to the strategic locations.
 cont

Signal Coverage

All telecommunication players claim they have best coverage

within Malaysia and international roaming however there is no

formal report published to rectify the claims. General user

experience concluded that Maxis has strong coverage in urban area,

Celcom has good coverage in rural area and DiGi has the worse

coverage.
 Promotion

 Due to little differentiation in products and pricing, 3

major telecommunication players in Malaysia, namely Maxis,
Celcom and DiGi, have constantly introduce new promotions to
excite the Malaysian market.

 Malaysia is one of the largest export nations worldwide and

is ranked 28th out of 121 countries by “Global Enabling Trade
Report 2009” which published by World Economic Forum.

 Malaysian had 48 billion ringgit FDI in 2008, but dropped

to 4.2 billion ringgit in 2009 due to economy down turn.
External factors include those factors that go beyond the
control of organizations,
these have being summarized and acronym into PEST
while some authors referred it to as PESTEL. These
include Political condition, Economic, Socio-Cultural,
Technology, Environment and Legal factors.
 Telecommunication providers need to improve the
network service to ensure best network quality is
provided to customers. Therefore it is crucial to identify
strategic locations to build telecommunication towers for
strong signal coverage throughout Malaysia.

 In November 2013, DiGi expanded the Challenge into

its fifth year. Local mobile developers are now creating
apps from more than 2,500 ideas received by the
Malaysian public, and winners will continue to receive
relevant market support from DiGi and its program
partners.
 Political

 In Malaysian, the government has strong control on the

total economy sector. It is not a freely expose to generous
society and usually the government rules are set up to safeguard
local based indigenous corporations.

 Using 3G license as example, TM (used to own by

government in 90s), Celcom (subsidiary of TM) and Maxis were
awarded with 3G licenses whereas DiGi whose major
shareholder is TeleNor from Norway vanished the bid.
 Economic

 Malaysia’s Gross Domestic Product in 2009 was 679,687 Million ringgit and
183,364 million ringgit in 2010.

 The GDP growth rate is 8.9 percent for quarter two in 2010, GDP growth for
Malaysia was forecasted to be 6.2 percent growth year on year.

 Overall Malaysian economy is resistant towards the world economy turmoil and
telecommunication players are not impacted.

 There are signs of strong growth for Malaysia domestic market with the recent
announced 10th Malaysia Plan as well as the New Economic Model.

 With the strong economy growth, there is no doubt for telecommunication

industry to continue to experience growth despite market saturation.
 Social and Cultural

 Malaysia is a multi-cultural, multi-religious and multi-racial

country. There are diversity of races and colors in Malaysia. people
speaks different languages. Majority of Malaysians are Malay who
speaks Bahasa Malayu.

 More than 80 percent of Malaysians are young, IT-oriented

and there are persistent signs of population moving into cities.

 This would means customers of telecommunication industry

are closely interacted, well informed, and refuse to accept anything
but latest information of everything.
 The socio-cultural factors can effects on telecommunication
industry and used to impact on DiGi.
 cont

 Telecommunication industry players need to serve the

customer population which is demanding and know about their
rights. However, telecommunication players also face misuse of
services by irresponsible customers.

 Malaysia is unique when it comes to races because despite

the local population, thousands of foreign workers from
different angels of the world are working in the country.

 DiGi has to attract those foreign workers to use its services

because they are a big number in market economy and should
be taken into consideration.
 Technological

 There are new challenges known as network development and

optimization in telecom industry.

 The network subscription created traffic congestion.

 There are different prices in telecommunication and as well as

different products come to the market.

 If the services is not smart and fast, customers are not likely to
use your services, but due to their dissatisfaction, they choose
another service provider.

 The current technology in telecommunication are mostly GSM

based and 3G technology is comparatively immature in Malaysia.
 DiGi was successfully minimized the impacts of this problem
and abide by 49 percent of the foreign policy.

 To get in touch and serve customer well, DiGi introduce

Synovate Views Cast Customer Satisfaction Measurement (CSM).

 According to DiGi allows them to evaluate overall service

performance, call center functions and individual staff every day.

 Synovate Views Cast have made non stop, real-time tracking of

effective performance for DiGi a practical reality, enabling DiGi to
continually observe and develop their service.
 ANALYZING TELECOM INDUSTRY USING
MICHAEL PORTER’S FIVE FORCES

According to Michael Porter, the external environment of any

industry is affected by five forces which are the bargaining power of

supplier, bargaining power of consumer, barrier to new entry,
availability of substitute products, and competition among rivalry
among competing firms.
In Malaysia, telecom industry experiences the five forces at different

rate. Starting with the most intense force which is competition among
rivalry firms, DiGi faces severe competition among firms like Maxis,
Celcom, Tune Talk, Umobile and so on.
The nature and extent of the competition relevant to an
organization or DiGi itself are determined by the
structure of the competitive forces of the industry.
 Threat of New Entrants

• License: Every potential entrant will need to obtain a license

through MCMC. However, it is somewhat difficult and expensive to
get an approve license due to MCMC‟s strict requirements and
procedures.
• High Capital Investment: Other than an expensive licence, telcos
also required high fixed costs and spend relatively large on network
equipment and to maintain development.
• Advance Technology: The advanced technology required in
telecommunication industry not only incurred high capital
investment but also need professional knowledge and skills (human
resources) to ensure success in the industry. It is not easy to copy or
imitate.
 Threat of substitutes

DiGi operates through 2 business lines: Voice and Data

Services. Mild threats of substitute products for both of the
business lines are recognized:
•Voice Services (mainly mobile): Many traditional and
modern substitutes – letter, fixed home line telephone, fax
and email. The
pressure on the very low cost to use the phone calling
through internet or communicate through online messenger had
threatened the mobile service industry. The attractiveness of
internet services making it more affordable to the masses.
•Data Services (focusing on broadband): Consumers have
become more demanding in quality broadband service and
this create an opportunity for new entrants to provide a substitute
product for consumers in lower price or better performance than
the existing ones.
 Bargaining power of the
organization’s buyer

Information technology increase the bargaining power of

buyer and high availability of information makes it easier
for customers to valuate sources of materials about
telecommunication. There are many alternatives product
such as fax, email, and internet which enhance the
bargaining power of buyer to the mobile service provider.
Customer also becomes more demanding of high speed
broadband (which is less costly but yields wider coverage)
and after sale service, creating a relatively high
competitive industry.
 Bargaining power of the
organization’s suppliers

• The telecommunications industry in Malaysia is dependent

on imports for majority of its network components as most of
the equipment cannot be sourced locally resulting in high
bargaining powers of suppliers.
• High Switching Cost: As DiGi cannot manufacture in-
house, the other viable option – 3rd party manufacturing
contracts may post complexity with terms covering cost,
quality, and use of intellectual property; and switching
between contract manufacturers may therefore be a more
costly process.
 The intensity of competition/rivalry
among existing competitors

Nowadays, Malaysia mobile market is oligopoly. Within the

industry, together with Telekom, Maxis, Celcom and DiGi continue
to compete on differentiation of products and services through
improvement and introduction of new innovative features –aspects
such as call rates, package price and so on. They try to gain
competitive advantage through low call rate and price. Each of
them also invests a lot on advertising to promote their product
internal factors as well
external factors
(strength and as (opportunities and
weakness) threats)

that can affects the operation of any organization


1- Launching of 3G
broadband services for PC
and introduction of 3G
service for phone in 2009.
3-the dividend payout
2- DIGI began ratio was 97% of
upgrading its network earnings, exceeding its
of 5,000 network sites minimum 80% payout
to LTE. commitment.

4-Focusing on strengthen
the overall ability to
deliver “internet for all”
service and leading
employee through the
next phase of evolution.
5- 4% to 6% growth in
revenue and betide
margin at 45% this
FY14.
 6-RM900 million 8-DiGi has
in capital 7-pro-actively sufficient
9- expenditure of and capacity and
improvement which a sizeable
thoroughly better service
on customer proportion will be
and service testing our quality now that
used to strengthen
quality. its network has
the quality and quality of
reach of its been fully
service.
network. modernized.
WEAKNESS
1- DiGi failed to achieve it's goal
and not only its LTE network
coverage is the smallest in the
country at the moment, it was the
last telecom to launch 4G in the
country.
2-There are
4-Management
many details to 5-DiGi’s 6-Digi
said it is making
clarify such as 3-challenges inability to
progress on its has the
prerequisites,
when it proposal to set deal with call
operational up a business worse
comes to drop rate of
limitations, trust, but
coverage
clarity on
capital declined to 8%and 7.78%
licenses and management commit a dropped call in rural
specific
governance rates. areas.
timeline.
1- The first 2-one of the 3- award
digital mobile leading from Forbes
communications operators in has
service offering the prepaid innovation
in Malaysia. segment. company.
4- obtained a 3G 5- exempted from the need to
spectrum license with comply with the 30%.
all of its rights and Bumiputra equity condition
benefits via a transfer imposed by the Foreign
from TIME. Investment Committee.
6- Prime Minister of Malaysia
announced that up to 70%
foreign equity would be
allowed for individual class
Network Facilities Provider
(NFP) and Network Service
Provider (NSP) licenses.
8- 2×10 MHz of the 2600
MHz spectrum was
allocated to DiGi for the
provision of LTE-related
services.
7- 11.0 million mobile
subscriptions and the
estimated mobile
penetration.
9- booming industry
which enjoy stability
growth and virtually all
the firms in it are doing so
well.
 10- encouragement by government
the industry to invest more in
telecommunication infrastructure.

11- broadband internet has been expanding strongly in

recent years and by early 2014 had reached a
remarkable 67% household penetration.
12- interim tax exempt dividend of 6.2 sen per
share equivalent to RM482 million or 99.4%
payout ratio to shareholders to be paid on June
6, 2014.
13- DiGi
remains its 14-impending 16- CIMB
Research opined
top pick with goods and 15- DiGi that DiGi will
a buy call services tax still do
and RM5.85 (GST) continues relatively well
target price, implementati to gain with continued
due to well on could be a market share
gains, driven by
execution potential market
its 3G coverage
and business boost to its expansion to
trust earnings. share.
86%.
potential.
17- The 20-
18- DiGi will
research house
also be the telecomm--
expects DiGi 19- less risk unication
biggest
to outperform
beneficiary of
its Malaysian
the ability to of network industry to
telco peers in continue to
pass on the 6% congestion experience
terms of
GST to prepaid
revenue and
earnings
users as it has in the longer growth
the highest mix despite
growth over term.
of prepaid market
the next three
revenues. saturation.
years.
 3- The re-farming
2- relatively of the low- 4-
1- Fierce
static frequency compounds
competition 900MHz and
industry issued by the
either 1800MHz
growth for spectrums Malaysian
directly or
around ten announced by the Communicati
indirectly Malaysian
years ons and
with other Communications
evidence of a and Multimedia Multimedia
competitors
shrinking and Commission Commission
in the (MCMC) may
subscriber (MCMC) to
industry. lead to reduced
base. ownership. DIGI.
 7- Prediction
5- The
by analyst of 8- telecom are
reallocation of
900MHz and
6-telecomm- DIGI possibly still facing
unication facing to headwinds in
1800MHz for
players also exceed its monetizing
reframing was
revenue data effectively
a negative face misuse of growth alongside the
surprise and services by guidance if the cannibalizatio
this may lead irresponsible outlook for the n of short
to reduced
ownership by
customers. telecom message
industry service.
the big three.
remains soft.
9- Due to the multilingual culture, telecomm-unication carriers need extra effort to
please all customers.

10-anticipated operational challenges and are expected to resume their cost

management initiatives.
11-fined by government 11 times amounting to M480,000 relating to complaints on
calls.

12-strong control on the total economy sector.

13- DIGI whose major shareholder is Telenor from Norway loose the bid for 3G
license.

14- increasing challenge in telecommunication industry is network

development and network optimization.
TOWS analysis is similar to SWOT analysis
but this analysis is used to device future
strategic plan for a company.
Both SWOT and TOWS analysis uses
internal factors and external factors for their
analyses.
The TOWS analysis table is divided into 9 parts.
Generating Strategies using TOWS TABLE
First part is left empty while the second column, third
column on the first row contains Strength and
Weakness. The second row first column and the last row
consist of opportunities and Threat.

We combine the best fit using DIGI

Strength, Weakness
&
Opportunities, Threat
we generate the following strategies:
 S-O Strategies
Instead of distributing all the profits
earned to shareholders, some part
should be kept behind, invest it on latest
technology to improve service quality,
also engage in CSR to create more
awareness in face of competition
(S2, S3, S4, S7, S8, O3, O4, O5, O6, O8, O9,
O10)
Product and Service Awareness through
CSR
W-O Strategies
Innovating friendlier products and
services on promotional basis to attract
and retain existing customer in face of
booming and fierce challenging
competition in telecom industry
(O2, O3, O8, O9, W2, T4, T7)
Product innovation
 S-T Strategies W-T Strategies

DIGI needs to improve its

Penetrate the market by investing more
in R&D to know the market needs and
management so that they can really

engage in a More aggressive marketing focus on how to compete effectively

and promotional packages should be and efficiently in the market
done to attract more customers in
present market and engaging in CSR to
win customers’ loyalty

(W3, W4, W5, W6, T2, T3, T4, T6, T7)

(S3, S4, S5, S6, S9, T4, T7­)

Market Penetration
Last but not least

STRATEGY
RECOMMENDATIONS
 Generating Grand Strategy for DIGI to follow

From the TOWS analysis four major

strategies were generated but this
needed to be merge into two distinct
strategies.
(S-O Strategy)
Instead of distributing all the profits earned to
shareholders, some part should be kept behind, invest
it on latest technology to improve service quality, also
engage in CSR to create more awareness in face of
competition.

Product and Service Awareness through CSR.

(W-O Strategy)

Innovating friendlier products and services on

promotional basis to attract and retain existing
customer in face of booming and fierce challenging
competition in telecom industry.

Product Innovation.
(S-T Strategies)

Penetrate the market by investing more in R&D to

know the market needs and engage in a more
aggressive marketing and promotional packages
should be done to attract more customers in present
market and engaging in CSR to win customers’ loyalty.

Market Penetration.
W-T Strategy

DIGI needs to improve its

management, so that, they can really
focus on how to compete effectively and
efficiently in the market.
 In order to generate two strategies
from the four already generated
strategies:-
Strategy 1 and Strategy 3 will be merge
together:
While,
Strategy 2 and Strategy 4 will be
merged together:
 Merging
Strategy 1 and
3
 Merging
Strategy 2 and
4
THANKS PROH. HIM MELMAN

“Thanks for helping us to trust in ourselves, we

Learned so many things from you during this

Semester, so it’s an honor for us to have such lecturer”

FOR YOUR ATTENTION AND
FOR AND TIME
TIME