DiGi’s ROE came in at 286% in FY2015, compared with 301% in FY2014. In FY2012, it was 144%. DiGi’s weighted three-year ROE was the highest among BRC members this year. For the most part, DiGi’s high ROE can be attributed to the high dividend payout and capital return that kept its shareholders’ equity low.

Maintaining this level of performance, however, is not easy. Quite a lot has changed in the past one year, namely the price war that has broken out. Telecommunications companies have been throwing data at consumers and lowering prices in a bid to defend market share. This year, two new players joined the fray — Telekom Malaysia Bhd’s webe and YTL Communications Sdn Bhd’s YES 4G LTE services.

“It has been an interesting year. I have been with DiGi for a while (since 2002), so I know the challenges and the opportunities that are coming. It is an extremely interesting period to take up this challenge,” CEO Albern Murty told The Edge in an interview in May.

He has only been at the helm for slightly over a year and it has been one of the most challenging periods for the industry.

Against this backdrop, DiGi has been able to defend its subscriber base. For the second quarter ended June 30, its subscribers grew 4.5% to 12.347 million. However, its average revenue per user (ARPU) fell from RM45 to RM42 amid stiff competition. Hence, service revenue slipped by a marginal 2% year on year to RM1.557 billion.

Nonetheless, DiGi made some impressive gains in the postpaid segment, which grew 10% to 1.95 million subscribers. It still has the smallest postpaid segment among the incumbents, but is quickly closing that gap. At the same time, DiGi’s prepaid subscriber base grew to 10.39 million, up 3.5% y-o-y. However, prepaid ARPU fell from RM38 to RM34 in the same period due to stiffer competition.

“There were two choices — one is we just defend, but that is not what we did. We went out there and innovated,” Murty said.

Moving forward, his strategy is to monetise DiGi’s digital services. It is a vision that is supported by the company’s 49% Norwegian shareholder, Telenor.

The goal is to increase the share of digital services revenue from 30% currently to 50%. DiGi’s advantage is that it can lean on Telenor to do so. Telenor has its own technology arm, Telenor Digital, which has been actively acquiring tech companies. For example, Telenor earlier this year acquired Prabhu Money Transfer Sdn Bhd, a licensed money services business based in Malaysia.

On a positive note, DiGi this year was also awarded additional spectrum after the recent re-farming exercise. It was allocated the 900MHz and 1,800MHz bands for 15 years. However, full implementation will only come next year. But for shareholders, this will not boost earnings and subsequently, dividend payouts in the near term. DiGi’s stagnant revenue growth is likely to continue until the telecoms industry consolidates and competition eases.

Interestingly, one way for DiGi’s share price to rise further is additional interest rate cuts by Bank Negara Malaysia, as it allows for more yield compression. For the time being, that seems to be the main short-term catalyst for the stock.