Mobile phone operator DiGi.Com Bhd - the company behind the ever popular DiGi Yellow Coverage Man - expects competition to remain stiff next year, and expects further pressure on prepaid tariffs.
It has yet to see any impact on new entrants, such as U Mobile.
I met up with the CEO Johan Dennelind last week and following are the excerpts of the Business Times interview:
Q: Have you seen any impact on new entrant?
Dennelind: I have seen a lot of adex (advertising expenditure) and share of voice, but I have seen very little impact on the revenue market share, none basically. If you count SIM cards, yeah, maybe it's noticeable. But, so far very much according to what I expected. It is very hard (for the new entrants) to come into the market, which currently has three very strong players, and many positions have been taken.
Q: What can investors expect from DiGi next year? Will there be weaker earnings?
Dennelind: We have our guidance, and that still stands, which is clearly in these days, it is a very tough guidance, I must say.
Q: Is it true that DiGi is the number one player in terms of foreign worker market segment?
Dennelind: Probably. We are well close related with great value for money.
Q: Lately, your rivals lowered call rates, one on the prepaid segment while the other on the foreign worker segment, what is DiGi going to do about it?
Dennelind: We'll fight for the value proposition day and night. If someone slashes rates, we will make sure that we stay competitive. We won't let go of that.
Q: Do you see price wars in 2009?
Dennelind: We don't have price war. But I expect continuous price pressure. I hope we avoid price war.
Q: What's the difference between price war and price pressure?
Dennelind: Price war is when you completely deteriorate the market and everybody undercuts on a big scale. That's not good for the consumers, not good for the operators, consumers will get bad quality eventually, because you trigger a lot of traffic. And the operators will not be able to sustain the quality of service in eroding margins. I hope we can be rationale about it, which we have been.
It has yet to see any impact on new entrants, such as U Mobile.
I met up with the CEO Johan Dennelind last week and following are the excerpts of the Business Times interview:
Q: Have you seen any impact on new entrant?
Dennelind: I have seen a lot of adex (advertising expenditure) and share of voice, but I have seen very little impact on the revenue market share, none basically. If you count SIM cards, yeah, maybe it's noticeable. But, so far very much according to what I expected. It is very hard (for the new entrants) to come into the market, which currently has three very strong players, and many positions have been taken.
Q: What can investors expect from DiGi next year? Will there be weaker earnings?
Dennelind: We have our guidance, and that still stands, which is clearly in these days, it is a very tough guidance, I must say.
Q: Is it true that DiGi is the number one player in terms of foreign worker market segment?
Dennelind: Probably. We are well close related with great value for money.
Q: Lately, your rivals lowered call rates, one on the prepaid segment while the other on the foreign worker segment, what is DiGi going to do about it?
Dennelind: We'll fight for the value proposition day and night. If someone slashes rates, we will make sure that we stay competitive. We won't let go of that.
Q: Do you see price wars in 2009?
Dennelind: We don't have price war. But I expect continuous price pressure. I hope we avoid price war.
Q: What's the difference between price war and price pressure?
Dennelind: Price war is when you completely deteriorate the market and everybody undercuts on a big scale. That's not good for the consumers, not good for the operators, consumers will get bad quality eventually, because you trigger a lot of traffic. And the operators will not be able to sustain the quality of service in eroding margins. I hope we can be rationale about it, which we have been.
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