Table of contents

Executive summary2
Background3
Trends of DiGi3
PEST analysis..4-6
Politic
Economic
Social
Technological
Event beyond control 6
Government Service Tax (GST)
Whistle blowing
SWOT analysis....6-8
Strengths
Weaknesses
Opportunities
Threats
Cost leadership...9
Differentiation...9-10
Recommendation10-11
Conclusion ...11
References 12

Executive summary

DiGi is one of the best mobile service providers in Malaysia with promising cheap rate,
and data package. In this report, we will write about a general and competitive environment of
DiGi present position and to focus on analysis of industry regarding whether its performing
above or beneath desire. By these analysis and suggestions are going to help DiGi with solution
and avoid failure if such circumstance will happen. First, we will give brief background of
company and we will do a PEST analysis, followed by a SWOT analysis of the company. One of
the objectives of the report is to provide important proposal that can help or enhance their current
circumstance so they will operate more accurate in the future and make changes accordingly.

Background
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DiGi Telecommunications Sdn.Bhd is known as Mutiara Telecommunications Sdn.Bhd. The

company was formerly known as Mutiara Telecommunications Sdn Bhd and changed its name to
Digi Telecommunications Sdn Bhd in January 1999. Digi Telecommunications Sdn Bhd is a
mobile service provider based in Malaysia. DiGi is a mobile communication company that
engaged in the establishment, maintenance and provision of telecommunication and related
services. The company was founded on 24 May 1995 and headquartered in Shah Alam,
Malaysia. Besides that, DiGi is the first telecommunication industry to launch and operate a fully
digital cellular network in Malaysia. So, Digi can be getting more market share on Malaysia to
compete with others competitors. Digi has provided a variety of mobile communication services
including Voice under their prepaid plans & postpaid plans, SMS, data plans and services,
international roaming, international calling card, WAP services and so on.
2

Trends of DiGi

The company implements unique sales strategy to focus on spreading its distribution channels
and brand name through the nation by creating huge network of traditional way such as dealers
and touch points. It has own more than 10,000 dealers and over 31000 touch points so far and
alternate channels consist of convenient stores , electrical chain stores , modern hyper and
supermarkets and other channels such as 7-eleven ,99 speedmart , Giant , Tesco , Sen Heng etc.
Digi still works on other way to enhance suitable and effective touches points to be a
telecommunication company which always close by its consumer lifestyle. (www.digi.com.my)
Their network which is supported by strong own build network complemented by 3G Ran Share
and 2G domestic roaming covering 95% population of Malaysia. This strategy boost its network
rollout and enabled the company to reach their coverage around the nation within very short of
time. Digi is still spreading and improving its network infrastructure in order to provide quality
voice and service to consumer. According to (Chris Lewis, 2009), by 2020, Digi will have more
than 20000 sites comprised of 3G and 4G LTE home network 3G Ran share and 2G domestic
Roaming sites.

PEST analysis

3-1

Politic

Strong Malaysian Government support: In 2007, Malaysian government has set to achieve 50%
Malaysian household with both wired and wireless mobile broadband penetration by the end of
2010. In order to aid service providers further, the government rolls out supplies of broadband
infrastructure and services throughout Malaysia. Plus, they also aggressively generate continuous
demand in 3 aspects which are awareness, attractiveness and affordability.
Malaysian Government discourages the usage of cell phone among school kids: In the year of
2006, Malaysian government banned the usage of cell phone among kids in nationwide school
even included the fully residential schools. The decision was taken after many groups especially
parents and teachers expressed their concern that allowing the handheld tool to be used by
students while in schools could lead to a lot of problems such as affecting student's performance
in class.
3-2 Social
Influx of foreign worker: Traditionally, Maxis and Celcom have neglected to provide mobile
services for this segment on the assumption that foreign workers are unable to afford them. DiGi
entered this full of opportunity yet neglected segment after discovering that these migrants were
willing to pay for communications to connect with their loved ones back home if they were
offered affordable packages without any extras and make it their stronghold. Foreign workers are
important in expanding Malaysia's economy as they are the ones who willing to work for long
hours but only receiving minimum pay. Foreign workers will be willing to work in Malaysia if
they could contact their loved ones and family anytime with low cost.
Higher standard living among Malaysians: Malaysians are able to enjoy the high-tech tele
communication provided. Whether it is to be in touch with their loved ones or family.
Communications has improved skills and knowledge among the Malaysian citizens.

3-3 Economics
Offering lower price packages: As economic downturn or during recession, Digi always offer the
lowest price compared to its two competitors which are Maxis and Celcom. Therefore, even in
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the worst economic position, Digi will not lose its market share but more users are switching to
Digi for its attracting benefits.
The world is now borderless where by economic openness and growing interdependence
between countries had spur on increase in movements of people, goods and services.
Increasing in Malaysia's GDP: The communications and multimedia industry contributed 6.1%
in term of revenue to Malaysia's GDP. While in 2009, this industry generate about RM40 billion.
For 2nd Quarter of 2010, the communication sub-sector registered 8.4% growth, mainly
attributed to greater usage of cellular, broadband and 3G services. (Chris Lewis, 2009)
3-4 Technology
Nowadays, the technology is widely recognized as a part of organization and industry. Besides
that, only the technology can be give more benefit in the telecommunication sector. Technology
significantly improved many industries with their facility and simplicity. It can give various
facilities and convenience to their users. Technology is the most important aspect in
telecommunication industry; technology is playing a vital role in this industry. It helps the
industry to attract more customers with many technological facilities. The most recent
technology is 3G and 4G this kind of technology all released in telecommunication sector. We
also know as Digi broadband, which provides users with mobile internet which able to upload
pictures, watch videos, and video conference on their mobile phone.
Besides that, government also influences the industry in developing the new technology on
telecommunication sector. In order to support the plan of Vision 2020, Malaysia's government
had issued "The National Telecommunications Policy" for the 1994-2020 periods. According to
Pusat Maklumat Rakyat (2010) states that the policy formulated to ensure that the growth
of telecommunications services and its use of technology support national development as well
as national aspirations. The telecommunications sector in Malaysia is the fastest growing sector
and it growing rapidly with the invention of the latest equipment and technology. So, The
national telecommunications policy provide guidelines for the development of the
telecommunications sector in Malaysia as it faces future challenges and support the attainment of
the objectives of Vision 2020

Event beyond control

4-1 Government Service Tax (GST)

When government implemented GST on 1st April, it will affect all organization around Malaysia
including telecommunication companies. It is the uncontrollable event that Digi couldnt handle
itself due to implementation of GST, the company had to change its rules regulation and price.
The impact is quite dramatic for many operators. We have seen some dealers give up and close
shop. (Tuck, 2015).
4-2 Whistle blowing
DiGi is committed to the highest standard of integrity, openness and accountability in the
conduct of its businesses and operations. It aspires to conduct its affairs in an ethical, responsible
and transparent manner (community.digi.com.my).WHISTLEBLOWER is a policy to provide an
avenue for all employees of DiGi and members of the public to disclose any improper conduct in
accordance with the procedures as provided for under this policy and to provide protection for
employees and members of the public who report/make such allegations. In order to solve
internal force of Whistle blowing, the company has made it to public and put it in their official
website so anyone can made report against it if that person witnessed some action on the work
field in return company will investigate report and take proper action afterwards.
5 SWOT analysis
5-1 Strengths:
-Major International Backer
DiGi telecommunications is 61% owned by Norway's Telenor, while local company Berjaya
Group owns a further 20% and the remainder of the company publicity listed. The international
backer enables DiGi to stronger since foreign investors can bring advanced technology and huge
amount of funds to build the brand.
-Embrace Mobility

DiGi has re-introduced the brand values to the Malaysia market place after Morten Lundal joined
DiGi by focus the energies on the market place, the customers and the competition. The
management of DiGi launched new concepts that enabling companies to embrace mobility and
Malaysians to communication over distance without being concerned about costs and offer the
customers to take a step forward in using mobile communications. The low rate calling brings
competitive edge to DiGi, as well as brings benefit to customers.
-Strong Growth on Postpaid
DiGi announced a 50.32% rise in terms of postpaid service. It is because DiGi offered attractive
postpaid plans, including DiGi Family Plan which main line is free to call, SMS, and MMS with
sub lines. (Malaysia Telecommunications, 2009)
-High Reputation
DiGi brand awareness is increased gradually among customers. Not only does DiGi carry out
distinctive marketing activities to attract market share, but also its corporate social responsibility
(CSR) impressed in peoples' minds. In 2007, DiGi won the Prime Minister's CSR award for best
overall CSR program in Malaysia since DiGi emphasized on a clear commitment to CSR, which
goes beyond policies and financial and legal obligations.
5-2 Weaknesses
-Lags behind Rival Operators
Until the first quarter in 2009, despite DiGi had a good performance over the year, it still lags
behind rival operators in the market. According (Malaysia Telecommunications, 2009), Maxis
still the leader in the telecommunications market of Malaysia, which holds about 42% market
share compare to DiGi's 25.4% market share. It indicated that competitors' strong marketing
strategies occupied the market share and maintained the customer loyalty, such as global alliance
in Celcom, customer loyalty program in Maxis.
-Regional Presence by Competitors
Maxis and Celcom always build their strong regional presence while DiGi is not able to grab the
market share from the rival operators successfully. For example, Celcom has a strong customer
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relationship in the Penang, Kuala Lumpur and so on. Based on the strong customer loyalty, it is
difficult to change the customers' mind for DiGi.
-Weak Cash Flow
According to the annual report, the cash flow remains lower at the end of 2008 compared with
the previous year, but it still positive. A weak cash flow showed that DiGi will have a tough
period in the future since when 3G service launch in the market, it would cost a lot of money to
promote the service.
5-3 Opportunities
3G Service
DiGi spent about RM 150 million in the development of 3G network over a three years period
(IDC, 2008). In Sabah and Penang, DiGi customers can receive 3G network in 2009 as well. The
trend of 3G services become more and more popular, and the competitors have launched the
program already and the impact for DiGi is positive.
Network Development

Nokia Siemens Networks (NSN) was awarded a GSM network expansion contract by DiGi. The
network expansion will be placed in the Klang Valley region in 2009 (IDC, 2008). Based on the
agreement, NSN will provide maintenance and further support services to improve network
efficiency and enhance quality of service in the next three years.
Mobile TV Services
Thanks to 3G and 4G LTE, people can use mobile phones to do everything. Mobile TV can
provides visual effects to customers, and the TV channels can be locally and international.

5-4 Threats
Strong Competitors
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Maxis and Celcom are the first 3G license holders in Malaysia, and both of them launched the
3G service in 2005, and Maxis collected about 7000 subscribers while Celcom picked up more
than 5,000 subscribers in the first week of operations. Thanks to the successful operation on 3G
service, Celcom decided to invest RM1.5 billion in 2010 and Maxis invest to plan to achieve
80% on 3G coverage by 2014. (Malaysia Telecommunications, 2009)
Although postpaid subscriber had the trend of increase in DiGi, the prepaid market also went up
and acquired 26.82% market share. However, the prepaid market share brought instability to
DiGi and the company cannot attract customers all the time.
Service & Product Overview
DiGi provides telecommunication services to customers, which categorized into prepaid,
postpaid communication service. Furthermore, DiGi brings internet and personal insurance
services to customers as well. With regard to products of DiGi, DiGi carries out DiGi Music,
DiGi Games and DiGi Rewards

Cost leadership

DiGI has achieved the low cost in telecommunication industry compare to other competitors and
target its product and services in the market by offering reasonable monthly package and cheap
call rates which goes without saying that the company implements cost leadership strategy in
order to gain distinct advantage from competitors. However, it has been successfully
implemented in their current operation and DiGi is the cheapest telecommunication provider in
Malaysia with high reputation among its customers.
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Differentiation

It is focus strategy that certain company develop or enhance its new product and service in order
to make different from other competitors one of the differentiation strategy of DiGi is Blackberry
internet plan is the cheapest among its competitors which is the unique offer made by the
company among blackberry users as a result, customer who uses blackberry will definitely
convinced its deal and purchase this offer. Another differentiation strategy is unlimited internet
service provided by DiGi to customer can watch their favorite TV program everywhere they go.
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It is an improved service of DiGi that cooperation with YouTube to provide customer with fast
and reliable internet speed. At the end, this offer will give benefit and give an edge to the
company to lead telecommunication industry.
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Recommendation

DiGi one of the leading telecommunication companies held the responsibility to continuously
serve the customers and cater their needs and demands that grows over a period of time. This is
necessary for DiGi to emerge as the top telecommunication in the country and to outlast many
competitors in the market. The quality exist should not limit to the service produced but must
extend to all of the related factors. Such practicing will ensure DiGi is recognized being capable
of providing and offering the best services which others yet to make available. Therefore, to
achieve such objective in the future, DiGi needs to make consideration on the issue that required
some improvement where necessary. The following are few suggestions which DiGi can
implement.
"It is a matter of organization and structure."
A group consist of a leader and few members can be assigned to the departments exist in the
company to assess the employees performances. The team should not only scout on the way they
carry out their job but at the same time, list the problems and challenges that the employees
encounter while performing their job. If the trouble discovered is with the working environment,
equipment or system, then the team should report to the unit responsible to solve the issue raised
to the ground. However, if the problem is rise from the employee itself, whether the particular
employee is lack of skills and training or is not competence enough for the job, then a
replacement or further training is necessary. Through this approach, the company is able to deal
any management issues effectively in relatively shorter time.
One of the important aspects of business is the customer. As service provider DiGi's job does not
end at point of selling the products to the customer, but the real job begins when customer need
the assistants of the manufacturer. So, to shorten the gap between the customer and the
manufacturer, DiGi probably can organize a session with customers in many regions yet more
frequently. This session is expected to take place in any events. This session is aimed to listen to
the customer's complaints, service reviews, expectations, suggestions and feedbacks. This creates
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a better understanding between the customer and the company, the appointed staff able to hear
from the customer itself, which later can be redirected to the company for better outcome.
The organization culture is also an asset or a weapon to compete in the market. Customers
always 'TRUST' the big company which have good reputation and corporate culture.
Advertising is very crucial for the information and the message to reach the intended customers.
Communicating ground refers to markets that are equally accessible to both of you and your
competitor. There are no natural barriers to entry and it is not difficult to get the consumer's
attention as they are not committed to anything. Therefore, definite advertising strategies are
needed to market the goods or the services. DiGi may have utilized all known methods to
publicize, from pamphlets to online advertisements but that does not guarantees the information
has reached to and comprehends by everyone. So to maximize the spread of the info, the
company may come up with advertisement in different languages, widely from printed materials
to online sources.
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CONCLUSION

Through this assignment, there are several key success factors of DiGi Company. First of all,
innovative of DiGi invented wide range of services that win the customers long term supports.
As DiGi scope of services can offer many varieties so they are able to be one of the leader in the
market. Also, DiGi are leading the market for years because of good management skill and
strong structure of the company. Well communication between the top level management and
lower manage including the first line staff enable them to be clear about their missions and
visions of the company. This will stimulate passionate behavior of the staffs in their working life.
Furthermore, the quality of the service is also one of the key factors of success in DiGi
Company. It has invested resources on research and development that gives improvement on
their current services accordingly. So, DiGi could not be easily attacked by competitors and
always ahead of them

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