DiGi: The Smart Choice

DiGi.Com Berhad (DiGi) is listed on the Bursa Malaysia stock exchange and is part of the Telenor telecommunications group. In 1995, DiGi commenced operations by launching fully digital GSM 1800 services. At the time, these were the first digital mobile services in Malaysia. DiGi has continued to be the foremost provider of innovative telecommunication services and is committed to connecting all customers in Malaysia to reliable, high-speed internet. DiGi also seeks to build a business that is financially sustainable and environmentally responsible.

Ole Martin Gunhildsbu has been chief technology officer at DiGi since January 2008. He has much experience in various technology management positions in the telecommunications and IT industries. He talked about DiGi’s challenges, business strategy, and collaboration with ZTE.

Q: What is DiGi’s market position in Malaysia?

A: I think DiGi is very well positioned in the mobile market in Malaysia. We started on a small scale and encountered several challenges when Telenor Group took DiGi over. Now DiGi ranks third in Malaysia and is not far behind Celcom and Maxis. In certain segments, DiGi is almost the leader. In Malaysia, there are three big operators, each of which has differences in terms of revenue and customer market share. DiGi has secured about 37% of the mobile market.

Q: Over the past two years, DiGi has promoted its mobile service packages at the youth market rather than the corporate market. How will the youth market contribute to the overall growth of DiGi?

A: Yes, DiGi has targeted the youth market in its business strategy. We are known for providing affordable offers, and we want to maintain that reputation while moving strong into the youth market and data market. However, broadly speaking, we have all kinds of internet services that we wish to extend to as many users as possible throughout Malaysia. The youth market is an interesting place to start.

Q: How is your network modernization progressing?

A: Telenor Group has been strategically modernizing its network, and in several markets we have used a single vendor. Of course, you are kind of stuck with a single vendor if anything goes wrong, but there are also many opportunities to create synergies with a single vendor. For example, we know the end-to-end progress of the project and can build a strong long-term partnership.

With ZTE, we can see the end of network modernization. It has been struggle for DiGi and ZTE, but we are seeing the ends of network modernization. We still have lots to do in this market, and we are still a little bit behind Celcom and Maxis when it comes to 3G coverage. LTE is also going to be very important in our future.

Q: Will DiGi stick with a single-vendor strategy?

A: No. We won’t limit ourselves to a single vendor but nor will we rule out the idea either. If we can establish a good partnership and get good deals, we will consider it. Many other companies do not enter into single-vendor arrangements, but we may again in the future. I think our approach is more pragmatic. It’s impossible to have a single-vendor strategy if you are a standalone business: you can only do it if you are a group. If a vendor does not deliver in our market, they are often considered by other business units in the group.

Q: Are there any restrictions or controls (e.g. cyberspace security) by MCMC that present a challenge to DiGi offering good customer plans?

A: Cyber security doesn’t necessarily present a challenge in this way, but one of the main challenges is providing the best possible solutions to our customers. This means we must provide the best, most secure products and also provide wide coverage. Our customers are also concerned that their data is safe with us. Ensuring the customer comes first is definitely our main objective.

Q: What challenges did you encounter working with ZTE?

A: We had to change every one of DiGi’s portable networks, and certain technologies were not ZTE technologies. Currently, 85% of the networks have been transferred to ZTE technology. I think the major challenge was not to affect customer experience during the swapover. When things go wrong, the customer is immediately affected.

Q: Is MCMC monitoring quality of service?

A: Not only MCMC; I think customers are more and more concerned about QoS and take it much more seriously than they used to. They expect more from the operator, and we need to accept that the customer comes first. We want to ensure that our services improve each year. I’m working towards modernizing our whole network so that DiGi is much more competitive moving forward into the data age.

Q: Telenor has launched 4G services. Has Telenor shared its 4G experiences with DiGi?

A: Over the past several years, we have been rolling out LTE services in certain Nordic countries. We have a very strong market and technical community within the Telenor group, and we all exchange experiences. We make sure all our people are moving across different countries to leverage experiences. 

Q: What’s your opinion of ZTE contribution to DiGi as a single vendor for D’Nemo project? What do you think about the skills and competencies of ZTE staff?

A: I think ZTE products are definitely competitive, but ZTE still needs to improve in terms of project planning, management, and rollout.

There have been some challenges in the relationship between DiGi and ZTE, and we have also changed the way we are working a little. Some of the things that ZTE were supposed to be responsible now fall back to DiGi. We have found a better way to work together, and the project is progressing quite smoothly. ZTE has only been in the international market for a few years, and even though it is catching up fast, there is a lot of ground to cover. I think ZTE knows its shortcomings very well and knows where it needs to improve. If ZTE is able to really study and learn from different projects—not only those it has undertaken in Malaysia but also in Hungary and Pakistan—I think ZTE’s future will be bright.

Q: Considering market competition and uncertain economic growth in Malaysia, would DiGi collaborate with ZTE again?

A: Sure. However, ZTE must first prove it can step up gradually in terms of its service competencies and areas of service. Regardless of some of the criticisms I have of ZTE, I still think there are good prospects for collaboration between ZTE and DiGi.

Q: Are Malaysian employees becoming more expensive? Is this a reason DiGi seeks foreign expertise?

A: At the moment, I don’t think local labor costs are really an issue for us. Compared with European operators, we have high operation costs but manageable labor costs. Our strategy is not to do simple, repetitive stuff, such as maintenance that the vendor could do. We believe the vendor has skills and competencies that we don’t have. For example, we have a vendor that delivers services to more than one operator in Malaysia, and this vendor has skills that we don’t have. So we are trying to strike a balance between providing operator services and outsourcing managed services to vendors. DiGi will continue to work with vendors that have particular skills and competencies that we require at the time.