Retailers cry foul over commission cuts by Digi

04 Mar 2019 / 21:54 H.

PETALING JAYA: Digi.com Bhd’s move to cut the commission rate by a whopping 50% has sparked anger among the retailers who threatened to boycott the sale of Digi SIM cards and prepaid top-ups.

It is learnt that the prepaid margin has been cut drastically to 3.2% from the initial 6%, effective March 1. The notice was issued on Feb 28.

Pictures of retailers showing “No to Digi” and “Digi products temporarily not available” at their stores have gone viral on social media.

Some retailers claimed that the commission cuts have exert pressure on their business due to the low margins.

Attempts to reach Digi were unsuccessful.

For the fourth quarter ended Dec 31, 2018, Digi’s prepaid revenue fell 12.6% year-on-year (yoy) and 2.4% quarter-on-quarter (qoq) to RM815 million, along with weaker non-internet prepaid subscriber base and moderated average revenue per user of RM30.

Its prepaid internet subscribers climbed up to 6.7 million while internet revenue increased 2.8% yoy and 2.5% qoq to RM409 million or 50.2% of prepaid revenue, although challenged by intense data price competition and abundance data offers in the market.

Meanwhile, non-internet prepaid revenue traced lower due to a combination of moderating demand for legacy voice and messaging services coupled with steady conversions to postpaid.

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