Digi Edit 2

DiGi telecommunication Sdn Bhd
Background of DIGI
DIGI telecommunication Sdn Bhd is a mobile service provider in Malaysia. It is
owned in majority by Telenor ASA of Norway with 49 percent. On 24 of March 1995,
Digi became the first Telco in Malaysia to launch and operate a fully digital cellular
network. Besides, in year 2004 DIGI were also the first to offer GPRS (2.5G) and
later they had offer EDGE (2.75G) in Malaysia. DIGI primarily uses the GSM 1800
band with the network code of 50216. Other than that, DIGI also has listed on the
Bursa Malaysia which under the infrastructure category. DiGi sister company, Pay
By Mobile Sdn Bhd deals with electronic financial services, while its subsidiaries are
DiGi Services Sdn Bhd (property holding, renting of premises) and Djuice.Com Sdn
Bhd (others related services).
DIGI is uses native dialling prefix identifier of 010, 016, 0143, 0146, as well as
0149 although with the implementation of mobile number portability mandated by
the Malaysian government this does not apply to subscribes who switched from their
old mobile service provider over to DIGI and at the moment switching to DIGI is free.
In term of product and service, DIGI Telecommunication has provided variety mobile
communication services such as voice under the prepaid plans and post paid plans,
SMS, data plans and services, international roaming, international calling card and
WAP services. The DIGI company also started a project that called happy and a
group of DIGI staff has been assign to handle this special project and provide a new
brand of Mobile Virtual Network Operators (MVNO) that also known as Happy
Prepaid. And currently in 2010 DIGI became the second operator in Malaysia to offer
the iPhone in month of April. (Wikipedia Foundation,Inc, 2001)
DIGi has offer the plans more cheaply compared to Maxis iValue plans, while the
price of iPhones sold are the higher than Maxis. Beside that, DIGI also be the first
telecommunication company in Malaysia that introduce Mobile Number Selection
service. And this service was implemented in 2008. This service can enable the
subscriber to choose their own number instead of following the traditional way of
purchasing a new SIM that has been pre assign fix mobile number. This kind of
service can encourage customer satisfaction since they feel that DIGI is provided
friendly service and close to them. (case study. DiGi telecommunication, 2009)
MGT 657
Page 1

Corporate Milestone
May 1995
1st digital cellular network in Malaysia
April 1996
1st digital cellular network in Sabah and Sarawak
Dec 1997
1st telecommunication company to be listed on Bursa Malaysia.
Dec 1999
1st telecommunication company to introduce an e-pay system.
June 2002
1st telecommunication company in Malaysia to GPRS
Aug 2003
DiGi becomes 1st to launch MMS
April 2004
DiGi launches Malaysia's 1st Prepaid Online Billing.
May 2004
Launch of DiGi's EDGE
Aug 2004
1st mobile to launch Mobile TV
Oct 2004
Flexi e-load and Talktime Transfer
Jan 2006
DiGi Flexi E-Load for Postpaid.
Aug 2008
DiGi announced Deep Green to reduce 50% Carbon
Dec 2009
DiGi launch 3G services
April 2010
DiGi offer iPhone 3G services.
MGT 657
Page 2

OBJECTIVE
DIGI long term objective is to create long tern shareholder value through providing
innovative, easy-to-use and best value telecommunications service in the Malaysian
market (DiGi company Sdn Bhd, 2010)
THE VISION AND MISSION STATEMENT
Vision
Enhancing communications to improve customers quality of life
At home, work and play
Mission
i
Customer
Provide customers with specific solutions to meet individual needs for
communications, connectivity, and access to information and security
ii
Concern for environment and society

Contribute to improving life in Malaysia
iii Concern for employee

Provide an environment where our employees can grow and be fulfilled
iv Shareholder
Provide superior returns to shareholders
MGT 657
Page 3

DIGI COVERAGE
MGT 657
Page 4

SWOT ANALYSIS
SWOT analysis is done in order to ensure that the company is able to compete in the
competitive global market since there are few companies nowadays that offer the
similar product and service. For instance, in case of DIGI this company need to
compete with CELCOM and MAXIS. Because of that, Digi has to ensure that they
have enough knowledge about their own strengths and weaknesses as well as
enough information on their close competitors. Digi should analyze the opportunities
and grab it as well before the opportunity become the threats to them when it have
been grab by the competitor. (DiGi company Sdn Bhd, 2010)
S - STRENGHTS
i
Strong Management Team
Successes of ones company cannot be achieve without cooperation and support

from the other member. As a result, strong management team plays an important
role in a company since it can ensure the company are strong enough to face any
threats and problem that occurred in the industry. And fortunately, Digi have that
strength that enables the Digi Company to sustain and maintain in the competitive
telecommunication industry. The management team of Digi works harder and
smarter for the purpose of achieving the companys aim and target. Each of them
gives more focus on each of the task that given to them in order to ensure that the
task can be done on time and give the great impact and result towards the company.
ii
Effective Communication
The effectiveness of the communication can be dividing into two which are inside
and outside of the company. Inside the company means that the communication
among the companys member, meanwhile outside the company means how the
company communicate with the customer in term of the products and services
offered. Digi can be considered as a company that has good communication either
among it staff as well as with it customer. For instance in 2001, Digi willing to spend
about nine million in advertising in order to communicate and inform it product and
service to the customer as well as to position it in the mind of the customers.
Effectiveness in communication can be a measurement of the company success
MGT 657
Page 5

since it can create more customers and also create high motivation and loyalty
employees.
iii
Loyal Customers
In business, each of the company is trying to have their own loyal customer and
same goes to Digi. This is because once the company able to have the loyal
customer, it is harder for another competitor to switch them to use competitors
product or service. Since Digi has customers that being loyal to the company, Digi
has to ensure that these kinds of customers are loyal forever. Instead of difficulties
faced by competitors to switch them towards their product or services, loyal
customer also can bring good image of the company. The customer become loyal
when they are satisfied with the product or service offered to them, and as a result
they will tell the others about their satisfaction.
iv
Men
Digi has applied the flexible working hours for its employee. Besides, the company
also provides care for the employee health and environment. Digi want to make its
employee feel secure works with them and work in the happy environment. Other
than that, Digi also provide continuously improvement in order to develop the talent
management by providing training and development program
v
Market
In term of market, Digi has entered the market of mobile broadband and mobile
network service provider. Digi also has expanded it market by using electronic
commerce or E-commerce that we knows this kind of market are having wide
coverage and enable Digi to attract customers globally. Furthermore, Digis go to the
market strategy base on LAS likely average speed-promised customer enjoy stable
mobile internet connection.
MGT 657
Page 6

W WEAKNESSES
i
Number of Staff Needed
Since Digi become bigger and bigger company and also has bigger market share,
the company need to hire more staff in order to give efficient and effective services
to the customer. The company have to increase the number of the staff, so that the
management can reduce the number of task that delegate to each staff. It can
ensure that each of the staff can put more effort and focus to each of the staff if they
do not have to do much works.
ii
Start up Cost is high
The high cost that incurred during start up the company is part of the weaknesses of
Digi. The company have to bear high cost as compared to the profit that they can
gain. In the other words, the profit that they gain is not enough to cover the start up
cost that had incurred. The company does not profitable enough for this time and
have to work harder if they want to stay long in this industry. Digi must have to come
out with excellent strategies in order to cover the cost and quickly can make a profit
for the company.
O OPPORTUNITIES
i
Emerging markets and expansion abroad
Digi has emerged the markets and plan to go abroad. Digi as well has made
collaborative effort with Celcom Axiata in order to explore the potential of network
sharing and to explore the new markets either locally and globally. The plan enable
the Digi to have large opportunity to expose it product and service in international
market and for sure enable the company to gain more profit.
ii
Products and services expansion
To be the a well established company, Digi has set few of the strategies and one of
that is product and service expansion. Dig has launched the DIGI LIVE Tour, which a
nationwide platform to cultivate the interest in music, sports and arts and focus
customer is at all aged. Product and service expansion that done by Digi giving them
more opportunity to retain and attract more customers since Digi is available
MGT 657
Page 7

everywhere with many choices of plan offered as well as great service offered to the
customer.
iii
Higher Living Standard in Malaysia
Most Malaysian nowadays is able to afford at least one mobile (service provider) and
broadband. Digi can grab this opportunity to increase the sale of it products.
T THREATS
i
Competition
The competition become a threat to Digi because it need to compete with the
establish telecommunication company such as Celcom and Maxis. These two
companies are well known company and have strong market share. Besides they
already have lots of the loyal customer and difficult for Digi to compete. Celcom itself
is one of the worlds largest telecommunication companies, with more than 160
million of customers across 10 Asian markets. Both of the company also have strong
strategies in order to sustain and maintain in the telecommunication industry. For
instance, Celcom has boasts the widest national 2G and 3G networks, that covering
over 98 percent of the population. Currently, it is the largest mobile broadband and
corporate services provider. Celcom is now moving towards integrated multi-access
and multimedia services, in line with evolving technologies and consumer behaviour
in Malaysia.
ii
Network and System Failure
The company is highly dependent on the technology such as key systems availability
and uninterrupted network service in order to provide excellent service to its
customers. Prolonged system downtime or network outages may severely affect
customer experience and company revenue besides not meeting regulatory bodies
requirement. The company continually works towards improving the availability of
these key systems and network elements to ensure good customer experience and
to exceed requirement set by regulatory bodies.
MGT 657
Page 8

iii
Malaysian Government discourage cell phone usage among school kids
Since the Malaysian government is discouraging the cell phone usage among the
school kids, it is become threat to Digi because kids are part of the best target
market. Kids actually have high power of influencer toward their parent, once Digi
able to influence kids to use the product or service, Digi able to increase the number
of customer as well as profit. (Wikipedia Foundation,Inc, 2001)
MGT 657
Page 9

INDUSTRIAL ANALYSIS FOR DIGI
PORTERS FIVE FORCES
Generally, Porters 5 Forces provide a good, simple yet powerful, a framework for
developing an understanding of the competitive forces within DiGis industry that
influence its pricing decision. Great competitive forces put more pressure on it while
weaker competitive forces subdue the pressure.
The Porters Five Forces Model
Threat of New Entrants

In general, telecommunications is not an easy entry industry despite the rumors of
easy award of 4G spectrum of new entrants. Several barriers are recognized:
1. 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 strict requirements and procedures.
MGT 657
Page 10

2. High Capital Investment:
Other than expensive license, DiGi also required high fixed costs and
spend relatively large on network equipment and to maintain
development. It might reach a few billion Ringgit Malaysia.
3. Advance Technology
The advanced technology required in telecommunications industry not
only incurred high capital investment but also need professional
knowledge and skills likes human resources to ensure success in the
industry. It is not easy to copy or imitate.
Threat of Substitute Products

DiGi is operates through two business lines which is Voice and Data Services. Mild
threats of substitute products for both of the business line are recognized:
1. Voice Services:
Many traditional and modern substitute such as letter, fixed home line
telephone, fax and email. Then, broadband Internet services which
enable faster and always on connection to the worldwide web, offer
more promising growth potential. In addition, the pressure on the very
low cost to use the phone calling internet or communicate through
online messenger had threatened the mobile service industry. The
attractive of internet services making it more affordable to masses.
2. Data Services:
This data services is focusing more 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.
MGT 657
Page 11

Industrial Rivalry
Malaysia mobile market is oligopoly nowadays after the consolidation in 2003. The
telecommunications industry has also been undergoing gradual liberalization since
1985, when Telekom, the Malaysian government-dominated enterprise, granted a
number of licenses to private sector telecommunication operators. Gradually, the
industry witnessed more competition in various segments of mobile, fixed line and
telephony services, and the functioning of the sector became more transparent.
Early 2010 seems to favour Celcom when at the 2010 Frost & Sullivan Malaysia
Telecoms Awards, Celcom triumphantly clinched 3 awards at the 2010 the much
coveted 'Service Provider of the Year' (2nd consecutive year), 'Broadband Service
Provider of the Year' Award and 'Mobile Service Provider of the Year' Award thus
further reaffirming its strength as one of the market leader. Yet, 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 successful maintaining their
place in Malaysia Top 10 Advertising high spenders list from Jan June 2010 as
shown:
MGT 657
Page 12

Other expected development in 2010 (dub the broadband year for Malaysia) will be
plenty of new devices and packages flooding the market place, and the possibility of
fixed broadband players stealing some market share from wireless players. For
example, Telekom is expected to deliver its HSBB in some areas even if it is for trials
(launch UniFi on 24th March with free trial until 30th June 2010).
Then, Maxis re-enter the fixed broadband market in a way that surprise many. Time
dotCom a company many say is history will re-emerge while YTL, which has
been grossly overselling its WiMAX 4G idea, sizzle the market with a grand entry in
July. And there is Tune Talk which is eager to eat into every operators customer
base with its smashingly cool pricing. Just to be in the game, U Mobile managed to
launch its broadband service known as XFone at the 11th hour of 2009.
Bargaining Power of Supplier

Generally, 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. The factors that contributing
to these is recognized:
1. Limited Supplier:
DiGi networks utilize standard GSM equipment which is available from
a limited number of suppliers. Previously, most of the GSM equipment
for DiGis mobile network operations are purchased from large
international companies that increase the size of supplier power such
as Motorola, Siemens, Ericcson and Trisilco Folec, and DiGi maintains
close working relationships with key network equipment suppliers. As
there are relatively very few suppliers in this market, DiGi have limited
choices.
Since Siemens is now a sub-contractor of Motorola for network
switching systems. DiGi left with two main suppliers: Ericcson and
Trilsilco Folec. Thus, the bargaining power of those suppliers becomes
stronger.
MGT 657
Page 13
2. High Switching Cost:

As DiGi cannot manufacture in-house, the other viable options which is
third 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. In addition, such a supply structure usually means lower
control on the delivery schedules and may cause component shortages
due to manufacturing process issues. Any persistent shortages in
supplies due to capacity issues or manufacturing process issues would
increase the price of manufactured products. If a company is not able
to source required components in adequate quantities, this would affect
its business operations and margins. In the future, DiGi believes that
comparable equipment and support will be available from other
established suppliers.
Bargaining Power of Customers

Information technology increase the bargaining power of buyer and high availability
of information makes it easier for customers to evaluate 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 yield wider coverage and after sale service, creating a relatively high
competitive industry. As a consequences, the intense rivalry among mobile and
broadband service providers only benefit the consumers who can enjoy lower price
broadband and mobile services, and eventually making then more powerful hence,
low switching cost.
MGT 657
Page 14
STRATEGY OF DIGI.COM BHD

DiGi used 4 possible types of strategies which are: (Chan King Hooi, 2010)
1. Market penetration
2. Market development
intensive strategies
3. Product development
4. Forward integration
vertical strategies
The first 3 is known as intensive strategies while the last one is from of vertical
strategies however it is only focuses on deliberation of intensive strategies.
1. DiGis Intensive Strategies Market Penetration:
As simplified by the figure, market penetration seek to increase market

share for existing products in existing markets through greater marketing
effect that encourage more usage and spending among consumers.
In the 1st half of 2010, DiGi had invested heavily on advertising to promote
their product and successfully maintaining their place in Malaysia Top 10
Advertising high spenders list from Jan June 2010 making it viable for
them to do so budget wise.
MGT 657
Refer to the chart below:
Page 15

DiGis Existing Markets and Products with their potential Market
Penetration Strategies:
Existing Products
Existing Markets
Voices Services:
- Fixed and mobile telephony (9prepaid, postpaid,
internet)
Data Services:
- Dial-up mobile and broadband internet, messaging
Market Penetration
1. Increase customer rewards
2. Provide consistent good services to existing customers.
Increase Customer Rewards
1. Malaysian Digital Native

Mostly youth below 24
years old who are
technologically driven and
savvy.
2. Business Entity
3. Foreign Workers
4. Malaysian General Public
1. Malaysian Digital Native:

- Plenty of mobile application, offerings and outdoor
gathering in hot button of youth lifestyle areas
(gaming, sports, music, movie, TV show, internet,
weather forecast, pictures messages and etc).
2. Business Entity:
- Business monthly business call plans depending on
size of business, budget and average call volume,
some package even combine unlimited internet
(data plan), broadband (business solution),
enterprise and immediate family members.
3. Foreign Workers and Malaysian General Public:
- Prepaid offered that voice rate of rate of 12 cents /
minute nationwide to ALL networks and SMS rate
of 1 cent (DiGi to DiGi only) when daily usage
reaches RM1; talktime transfer, GPRS, EDGE
(Enhanced Data rates for Global Evolution), flexi eload (top-up)
- BonusLink Points based on monthly usage bill for
postpaid mobile and broadband.
- Family plan.
Provide Consistent Good Services
1. Customer Support:
- Corporate website (information on mobile and
others frequently used question, technical chat
fuction online and by phone.
- Nationwide centre, specialized store, service
countries and dealers (prepaid and postpaid)
- Concept store equip with Simbioz sustem (DiGi
360o
MGT 657
Page 16

2. DiGis Intensive Strategies Market Development:
As simplified by the figure above, market development is the term used in

introducing existing products to new markets can be new geographic
areas or currently underserved communities (DiGi recognized two sources
of new markets : potential or new foreign workers and rural communities).
Supporting Factors Market Development:

-
According
to
Malaysian
Communications
and
Multimedia
Commission (MCMC) back in August 2007, cellular coverage area

was 95% (Peninsular) and 77% (East Malaysia).
-
May 2010 national populations coverage for cellular improved to

94% (MCMC, 2010).
MCMC under USP target to reach 97% national population

coverage for cellular by 2012.
Rural, suburban, low cost housing areas and tourist spots (high
foreign worker patron during public holiday) are a few areas that
need broader access to communication infrastructure although
affordability is low.
As a USP, DiGi is entitled to claim certain qualified expenses from

the MCMC in relation to USP projects.
In June 2010, DiGi and Celcom on signed
a Memorandum of
Understanding (MoU) on infrastructure sharing at both company

(DiGi and Celcom) and group level (Telenor and Axiata) benefiting
DiGi on access to Celcoms well publicized whole Malaysian
coverage.
MGT 657
Page 17

DiGis New Market to Existing Product with their Potential Market Development
Strategies:
Existing Products
Voices Services:
- Fixed and mobile telephony (9prepaid, postpaid, internet)
Data Services:
Dial-up mobile and broadband internet, messaging
New Market
Market Development
1. Provide myriad international services.
2. Continuously pursue USP obligation by providing access to basic
telephony communication to districts designed to DiGi.
Provide myriad international services
Potential or New Foreign Markets:
Potential or New
Foreign Market
Rural
Communinties
International Direct Dial (IDD) prepaid and postpaid with rates as

low as 13 cents/minute for call to both mobile and fixed line
recipients around the world.
Offer a few special rates package:
- Prepaid long distance savers plan for foreigners from Saudi
Arabia and UAE.
- Cakap-cakap (from 9pm 9am) for foreigners from
Pakistan, Vietnam, Nepal, and Indonesia.
- Cakap-cakap lagi (from 12am 2pm) for foreigners from
India and Indonesia.
- International Calling Card (Chartz and Desher Kotha).
When roaming abroad (eg; back in home country or anywhere on
Earth) no charges when receiving SMS but sending it at low flat
rate of 99 cents.
RM1.50 per International SMS.
In-flight mobile services.
Continuously pursue USP obligation by providing access to basic

telephony communications to districts designated to DiGi
Rural Communities:
MGT 657
Up to 2010, DiGi had provided 6000 household fixed lines and 300
payphones to 7 under-served districts in Malaysia.
DiGi was provisioned 13 Community Broadband Centre (CBC) site
in various areas in Malaysia (Sarawak, Johor, Melaka, Kelantan,
Terengganu, Pahang) under USP.
- Up to April 2010, DiGi had officially launced CBC in Landu
(Sarawak) and Kampung Teriang Besar (Johor)
- Lundu CBC is equipped with facilities that include 20
dekstop computers connected to DiGis Turbo 3GTM
network with a minimum speed of 2Mbps and others
gadgets such as printer, scanner, copier machine as well as
an LCD projector.
Page 18

3. DiGis Intensive Strategies Product Development:
As simplified by the figure above, product development seeks to increase

sales and profit by improving and modifying present products or services
or developing new ones for its existing markets.
This is especially important in the era whereby global consumer multitask

with their mobile device.
MGT 657
Page 19

DiGis Existing Markets to New Products with their Potential Product
Development Strategies
New Product
Existing Markets
Voices Services: combine postpaid and prepaid for family packages

Data Services: smartphone (Blackberry, HTC, iPhone), Android apps,
MiFi, DiGiREMITTM
Personal Accident Insurance
Product Development
Joint venture with handheld mobile providers to include latest
technologies and internet function into mobile.
Stand ahead of the competitors and encourage consumers to switch to
DiGi with the slogan ITS TIME TO CHANGE TO DIGI
Produce new and tech savvy product to prevent going outdated
Malaysian Digital Native:
overnight.
1. Malaysian Digital
Native
Mostly youth below 24
years old who are
technologically driven
and savvy.
2. Business Entity
3. Foreign Workers
4. Malaysian General
Public
Tie up with Apple Inc for the rights to distribute iPhone 3G, 3Gs and
4s.
Partnering HSBC Credit Card and Guess to lure potential iPhone
owner with DiGi Plan through 24 months Easy Payment Plan plus a
free GUESS iPhone casing.
Open Android apps for wider away of phones.
Bring to Malaysians Huawei portable wireless router MiFi (Mobile
WiFi Device) that can have 5 different WiFi (eg: combination iPad,
iPod Touch, iPhone, Blackberry and laptop or netbook) enabled
devices to connect to the internet simultaneously.
Business Entity:
Offer Blackberry Solution with help from Research in Motion (RIM)
Foreign Workers and Malaysian General Public:
MGT 657
Partnering Citibank to allow subscribers to transfer funds via SMS up

to RM5000 from Malaysia to Indonesia, Bangladesh, and the
Philippines in a secure manner direct debit their local banks in the
beneficiarys country or cash pick-up at designated agents.
Partnering AIG to entitled subscribers with > 3 months tenure
Personal Accident Insurance coverage via SMS activation.
Encourage other service provider users (mobile, smartphone) to
switch to DiGi manu rate plans while retaining the original number
at no extra cost (DiGi is absorbing it)
Offer DG Family that allows combination of prepaid and postpaid
as supplementary line.
Page 20

DiGi BCG Matrix
The following BCG matrix classified 4 DiGis SBU (prepaid and postpaid, fixed
telephony, smartphones and mobile/wireless broadband) into 4 quadrants that
consists of Question Marks, Stars, Cash Cows and Dogs.
DiGi BCG Matrix Justifications and Strategies
This justifies section on DiGi BCG Matrix by quadrant and also looks at possible
strategies to handle the respective SBU.
QUESTION MARKS: MOBILE/WIRELESS BROADBAND (DATA SERVICES)
relative market share: LOW
As highlighted before, DiGi was having the smallest market share in 2009
since it is need to compete with the largest competitor such as Celcom and
Maxis. As part of that the market is also getting crowded with many new
entries in 2010 such as Time dotCom, YTL, U Mobile and Tune Talk.
MGT 657
Page 21
market growth rate: HIGH

there are high market growth in question mark because of rising penetration
rate of broadband subscribers (per 100 household) which are 4th Quarter of
2009 = 31.7%, 1st Quarter of 2010 = 34.5%, and 2nd Quarter of 2010 =
37.5%
Malaysian government give their support
through National Broadband Initiative (NBI) which aims to achieve 50%

Malaysian
household (both wired and wireless mobile) broadband
penetration by the end of 2010.

challenge for DiGi
DiGi have a intention to increase mobile/wireless market share quickly so that
it might become Stars and eventual CashCows or it will become Dogs. This
kind of intention becomes the big challenge for DiGi company in order to
become well established the company globally.
strategies
The strategies that DiGi can done such as:
invest RM350 million for mobile broadband expansion as part of its plans to
improve its infrastructure
market penetration: increase customer rewards and provide consistent good
services to existing customers
- plenty of offerings and outdoor gathering in hot buttons of youth lifestyle
areas (gaming, sports, music, movie, TV show, internet, weather forecast,
games etc)
- various monthly broadband (business solutions) depending on size and
budget of business entity
- BonusLink points based on monthly usage bill for postpaid broadband
subscribers
MGT 657
Page 22

market development: build CBC for rural communities in various areas in
Malaysia (Sarawak, Johor, Melaka, Kelantan, Terengganu and Pahang)
product development: bring to Malaysians Huawei portable wireless router
MiFi (Mobile WiFi Device) that can have 5 different WiFi (eg combination:
iPad, iPod Touch, iPhone, Blackberry and laptop or netbook) enabled devices
to connect to the Internet simultaneously
STARS: SMARTPHONES (DATA SERVICES)
relative market share: HIGH
we do not have the exact figures disclose but relatively, DiGi is having a high
market share for smartphones as they are selling Malaysian favourites (refer
pie chart and table below): RIMs Blackberry, Apples Iphone and Googles
open-source Android operating system phones such as Samsung Galaxy S,
HTC Legend, HTC Desire, Sony Ericsson Xperia 10 and Motorola Milestones,
amongst others. And smartphones had contributed to the DiGi fast-growing
mobile Internet market.
MGT 657
Page 23
market growth rate: HIGH
Even though the percentage ownership of smartphones is still low but its
popularity is rising rapidly. Besides,the potential market for mobile Internet
(through smartphones) is large as there are more
million of mobile
phones in use in Malaysia which is more than 10 times the estimated number
of laptops and netbooks owners as of 2nd Quarter of 2010.
challenge for DiGi
DiGi want to maintain or strengthen dominant positions of smartphones as

Stars because it is DiGi best long run opportunities for growth and profitability
plus growing it into Cash Cows. It also can contribute the increasing of profit
to DiGi.
strategies
The strategies in STARS that DiGi can adapt as follows:
market penetration: increase customer rewards and provide consistent good

services to existing customers
- various data-centric packages to cater to the growing number of mobile
Internet (smartphone) users
- reduce fees to replace standard SIM card with Micro SIM
MGT 657
Page 24
market development: aggressively push sales of smartphones

- encourage other service provider smartphone to switch to DiGi many rate
plans while retaining the original number at no extra cost (DiGi is absorbing it)
- invest RM100 million over the next 3 years in Perak and Sarawak to expand its
mobile internet services footprint beyond 5 key market centres (Klang Valley,
Penang, Kota Kinabalu, Ipoh and Kuching)
product development: joint venture with handheld mobile providers to
include latest technologies and internet function into mobile.
CASH COWS: PREPAID AND POSTPAID (VOICE SERVICES)
relative market share: HIGH
DiGi market share for prepaid and postpaid is relatively high up to 2nd
Quarter of 2010 as shown in pie chart below. However, DiGi do not disclose
exact figures for its prepaid and postpaid subscribers (voice services) but
lump it together with broadband customers.
market growth rate: LOW
The phenomenon on declining voice revenue is an occurrence worldwide but

it is expected to remain as the main revenue earner. The mobile voice
revenue is expected to grow by 6% annually until 2013.
MGT 657
Page 25
challenge for DiGi
So, DiGi maintain its prepaid and postpaid strong position for as long as
possible as Cash Cows since it was yesterdays Stars to finance
mobile/wireless broadband (Question Marks) and Smartphones (Stars)
strategies
The strategies adapted:

product development
- maintaining prepaid and improving postpaid momentum by offering handset
bundles
- DG Family package allows combining prepaid and postpaid as supplementary
line
- Happy prepaid37 east coast edition (Kelantan and Terengganu) targeting value
seekers that mainly use their mobiles to just make calls and SMS
retrenchment
- eliminate DiGi Prepaid Campus package
- eliminate paper billing for postpaid subscribers
DOG: FIXED TELEPHONY (VOICE SERVICES)
relative market share: LOW
The market share of DiGi low since it was having tiny market share in 2009.
This is maybe cause by the DiGi coverage that most of the people claimed it
is not too good as Celcom and Maxis.
market growth rate: LOW
Almost stagnant penetration rate of fixed line telephone subscribers (per 100
householders) such as in 4th Quarter of 2009 = 43.9%, 1st Quarter of 2010
= 44.0%, 2nd Quarter of 2010 = 44.0%. The fixed-line voice revenue is
expected to decline 4% annually until 2013.
MGT 657
Page 26
challenge for DiGi
DiGi have avoid or maintain fixed line telephony which is weak internal and
externally as Dogs Cash if there is some profit since expensive turn-around
plans usually do not help the DiGi company to survive in the competitive
telecommunication industry.
strategies
retrenchment is strategy suggested for DiGi since it can ;

- eliminate fixed line telephony
- continuously provide payphones and household fixed lines as part of obligation
to provide access to basic telephony communications in rural community districts
designated to DiGi under Universal Service Provision (USP)
MGT 657
Page 27

LESSON
As human being, we need to always learn from the experienced and any situation
that happen among us. We have to adopt it and make it as guidance for us in our life
either for our personnel life or in our jobs. This is same goes for the case of Digi
which there are lots of lesson that we can learn and knows. One of that is, from this
case we learn to be brave if we are going to jump into business especially for the
competitive industry. In case of Digi for example, it is shows that how the company is
brave enough to do business in telecommunication lines since we all knows that this
kind of industry that have strong competitors who compete in the industry. The
company are brave enough to take a risk once they are decided to jump into this
industry and they are confident that they able to experienced and faced the risky
condition in telecommunication industry.
Other than that, from the case we also can learn on how to interpret of something or
situation. This is because; Digi is trying to interpret the current situation in industry
especially in term of market. Digi. Interpret the market for the purpose to set the
accurate strategy that being use in order to sustain and expand the business. Digi
also are braver enough to do the 4 strategy in maintaining and boost their business
and market share even though it involves a large cost. For example when Digi
decide to invests 9 million on the advertisement to communicate with the customer.
Also with the hope that they can increase their market shares.
Besides that, we also can see that we need to be more careful when we want to
choose something or decide something. for instance in Digis case, they always need
to review and renew all of the decision that they have make and take to ensure that it
is applicable for the time being. Before making the decision to used the 4 strategies,
Digi have go through a lot of research to make sure that the strategy is suitable for
them to use to compete in the industry.
MGT 657
Page 28

BENEFIT
We can get a lot of benefit from this case for example we are able to gain more
knowledge especially about the telecommunication industry. From this, we can know
how these telecommunication companies are compete to each other and how they
set the strategy for the purpose to sustain and maintain their own company. Second
benefit is we also able to know about how the company nowadays adapt with the
technology to maintain its competitive advantage. From this case, we can see that
Digi is trying harder to stay competitive in the market by adapting the new
telecommunication technology such as the edge, 2G, 3G and others. Digi also is
trying to win the market share by investing a large sum of amount in the advertising
to communicate with the customers. Thirdly, from this assignment, we can also see
that it is important for the company to practice strategic management to make sure
that the company can achieve the vision and mission statement very well. The
mission and vision statement is very important to the company to make sure that
they are always staying in the purpose of their business. It also important to make
sure that the employee can always review the mission statement to make them
remember what is the target of the company. Besides that, when the company is
practicing strategic management it also can ensure that the company can run
smoothly with more efficient and effective ways. Last but not least, this assignment
also make us become close to each other since we need to communicate and
discuss this case in order to do the best for this assignment. We also learn on how
to be more tolerate as well as being more responsible among group member.
Toleration between group members is the most important things because it can unite
the group member. On the other hand it also make the task given can be done easily
with happy felling.
MGT 657
Page 29

RECOMMENDATION
We have three recommendations for this company which is for the functional
strategy, corporate strategy and also business strategy. (Ching, 2010)
Functional Strategies:
Bring in competent human capital with new blood, intensive training to present
staff, and increase recruiting experienced local and overseas talent. Digi must
increase the skill of the employees to improve their performance. Digi can hire
fresh graduate to fulfill the job vacancy in the company because Digi can
exploit new idea from them. Digi must upgrade their contribution to the society
and environment by focusing and improving Digi Supply Health, Safety,
Security and Environment Assurance program. For example Digi can provide
the assurance program their valued customer by charging RM1 on their bills.
With this charge they can provide the health insurance to cover any injured.
Digi also can improve and increase efficiency and capacity of service to
attract and retain more customer. Digi can further improvement for consistent
good services in terms of customer support, corporate website, FAQ,
nationwide centers, specialized store, service counters, dealers.
Business Strategies
Digi can increase more capacities in their biggest market share, especially
metropolitan areas like Kuala Lumpur. It is because the opportunity for the
company to have more usage on the service is bigger in the metropolitan
area. Besides, Digi also can set up their owns R&D center and developers
program to help provide better value added services to Digi users. With their
own R&D center Digi can create new idea and package different from its
competitor. Moreover, Digi has to expedite their broadband coverage to whole
Malaysia since currently the broadband coverage monopolize by Celcom. As
whole the most important things to be done by Digi is to increase their
coverage in Peninsular Malaysia compatible with East Malaysia.
MGT 657
Page 30

Corporate Social Responsibility :
Digi has to increase its corporate social responsibility. For example they can
sponsor educational program, sport program, and health program to
strengthen Digi brand. (Ching, 2010)
MGT 657
Page 31

CONCLUSION
As a conclusion, Digi has done the best effort to gain profit and stay competitive in
the market. Digi also has done the best to show its competitive advantage to put it
company in the same rank as it competitor which are Celcom and Maxis. Digi try to
show how it concern enough to it customers by claim and make a promised to the
customer that they are always the best choice for customer in the telecommunication
product and services. Digi want the customers have experienced the exciting
telecommunication products and services with them. As a result they plan to
modernise the network such as infrastructure to improve the service given to the
customers as well to drive the cost efficiency.
MGT 657
Page 32

REFERENCES
(2009). case study. DiGi telecommunication. United State: www.sugarcrm.com.
Chan King Hooi, e. (2010). Retrieved november 20, 2011, from www.slideshare.net:
www.slideshare.net/jonathanleong/digi-group-v-presentation-20110109
Ching, K. Y. (2010, January 7). GSM Shaping Leaders. Retrieved November 12,
2011,
from
Slideshares:
http://www.scribd.com/doc.40379775/DiGi-strategies-
management
DiGi company Sdn Bhd. (2010). annual report. Malaysia: DiGi SDN BHD.
Wikipedia Foundation,Inc. (2001, november 18). Retrieved november 26, 2011, from
www.wikipedia.org: http:en.wikipedia.org/wiki/DiGi-Telecommunications
MGT 657
Page 33

Digi Edit 2

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Digi Edit 2

Uploaded by

Copyright:

Available Formats

DiGi telecommunication Sdn Bhd

DiGi telecommunication Sdn Bhd

1st digital cellular network in Malaysia

1st digital cellular network in Sabah and Sarawak

1st telecommunication company to be listed on Bursa Malaysia.

1st telecommunication company to introduce an e-pay system.

1st telecommunication company in Malaysia to GPRS

DiGi becomes 1st to launch MMS

DiGi launches Malaysia's 1st Prepaid Online Billing.

Launch of DiGi's EDGE

1st mobile to launch Mobile TV

Flexi e-load and Talktime Transfer

DiGi Flexi E-Load for Postpaid.

DiGi announced Deep Green to reduce 50% Carbon

DiGi launch 3G services

DiGi offer iPhone 3G services.

DiGi telecommunication Sdn Bhd

THE VISION AND MISSION STATEMENT

Concern for environment and society

iii Concern for employee

DiGi telecommunication Sdn Bhd

DiGi telecommunication Sdn Bhd

Strong Management Team

Successes of ones company cannot be achieve without cooperation and support

DiGi telecommunication Sdn Bhd

DiGi telecommunication Sdn Bhd

Number of Staff Needed

Start up Cost is high

Emerging markets and expansion abroad

Products and services expansion

DiGi telecommunication Sdn Bhd

Higher Living Standard in Malaysia

Network and System Failure

DiGi telecommunication Sdn Bhd

Malaysian Government discourage cell phone usage among school kids

DiGi telecommunication Sdn Bhd

The Porters Five Forces Model

Threat of New Entrants

DiGi telecommunication Sdn Bhd

Threat of Substitute Products

DiGi telecommunication Sdn Bhd

DiGi telecommunication Sdn Bhd

Bargaining Power of Supplier

DiGi telecommunication Sdn Bhd

2. High Switching Cost:

Bargaining Power of Customers

DiGi telecommunication Sdn Bhd

STRATEGY OF DIGI.COM BHD

1. DiGis Intensive Strategies Market Penetration:

As simplified by the figure, market penetration seek to increase market

Refer to the chart below:

DiGi telecommunication Sdn Bhd

1. Malaysian Digital Native

1. Malaysian Digital Native:

DiGi telecommunication Sdn Bhd

As simplified by the figure above, market development is the term used in

Supporting Factors Market Development:

Commission (MCMC) back in August 2007, cellular coverage area

May 2010 national populations coverage for cellular improved to

MCMC under USP target to reach 97% national population

As a USP, DiGi is entitled to claim certain qualified expenses from

In June 2010, DiGi and Celcom on signed

Understanding (MoU) on infrastructure sharing at both company