No comment on GST for now, says DiGi

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KUALA LUMPUR (April 13): DiGi.Com Bhd’s officials declined to comment on issues related to the Goods and Services Tax (GST) on prepaid reload coupons, before the completion of a survey to determine the pricing format consumers favour.

“There is no update so far and I do not wish to comment on it ahead of the survey. It is also a sensitive period for us now, as we are going to release our (financial) results soon,” DiGi’s chief marketing officer Christian Thrane told pressmen, after the launch of the group’s collaboration with Telekom Malaysia Bhd (TM)’s Internet Protocol television (IPTV) HyppTV today.

Earlier this month, the Malaysian Communications and Multimedia Commission (MCMC) made it clear telecommunication companies’ (telcos) prepaid services are subject to GST, and that telcos will conduct a survey to determine the pricing of the services.  

For example, a RM10.00 reload could be RM10.60 (RM10 reload plus 6% GST added) or RM10.00 (RM9.43 reload plus 6% GST added).

This followed an uproar among consumers, after telcos increased their top-up voucher or reload coupon price by 6% after the GST kicked in on April 1.

This prompted four major telcos, namely DiGi (fundamental: 1.55; valuation: 2.1), Celcom Axiata Bhd, Maxis Bhd and Umobile Sdn Bhd, to offer consumers who reload RM5 and above, an additional value higher than the 6% GST in the form of free minutes and text messages for three months from April 3.

As at market time 2.35pm today, DiGi was trading three sen or 0.48% lower at RM6.22 apiece.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)