It’s been over a year since DiGi lost its bid for a 3G license for the second time.

Today, DiGi is has a 3G license in hand, thanks to Time dotCom which bought the 3G license for RM50 million, did nothing with it, then sold it to DiGi for RM654 million and now that license is being put to good use as DiGi said it’s on scheduled to roll out the 3G network, earliest towards the end of this year or early next year.

What does DiGi have in mind? According to reliable sources, DiGi is studying the current market carefully and with Mobile Number Portability currently available, DiGi hopes to grab as many 3G customers from the others as it can.

In the past, DiGi has had a hard time offering better mobile coverage compared to its competitors, especially since the GSM 900 MHz frequency used by its competitors has from 2 to 3km longer range than GSM 1800Mhz used by DiGi.

While higher frequencies such as 1800MHz have higher data carrying capacity than 900MHz, hence higher bandwidth, due to the laws of physics, the power of higher frequency radio signal declines faster with distance traveled through the atmosphere.

While it may be a simple matter to increase base station transmission power to achieve longer range, it’s not as simple to increase the transmission power of mobile phones so they can reach the base station, especially considering their battery life and the radiation effect on users.

So GSM 1800 networks require more base stations to cover a given area than GSM 900, making it less cost effective for GSM 1800 operators to provide coverage especially of sub-urban or outlying areas with lower population densities compared to urban areas.

Through mergers and acquisitions, DiGi’s two competitors had each acquired a GSM 1800 network and thus were able to enjoy the best of both worlds, while DiGi couldn’t.

With the Government directives and support, all three major mobile operators including DiGi now provide coverage of over 90% of populated area of this country.

However, things have certainly changed for DiGi, now that it has the same 2100Mhz spectrum as its 3G competitors and while they have had a few years’ head start and 3G coverage close to 50% of populated areas, DiGi believes there’s still room for growth.

While at close to 90% of the people having mobile phones, Malaysia’s mobile market is reaching saturation. “When people say subscriber growth is over in Malaysia, I see that as a challenge,” its newly appointed Chief Executive Office, Johan Dennelind told a local daily recently.

(Johan,CEO of DiGI in white shirt)

In his first job as a CEO, Johan, who replaced Morten Lundal said that the competition is changing. He hopes DiGi will be different in coming years, offering superior customer experience. With the 3G license in hand, Johan sees DiGi going into the Internet market much more aggressively than before.

From ONE Plan to 4 Plans

While Malaysia is dominated by prepaid subscribers, most of the people we’ve spoken to including telcos do not believe that the market will have more postpaid subscribers compared to prepaid subscribers within the next few years but having said that, two telcos including DiGi have made moves to restructure their postpaid offerings.

Recently, DiGi came out with four new postpaid plans, with one of them offering free calls and SMS to all numbers. DiGi only had one postpaid plan previously.

It’s hard to predict how DiGi will perform in the postpaid market since it has always been known for its prepaid offering’s with only about 15% of DiGi's 6.6 million customers being postpaid users.

According to its Chief Commercial Officer Tom Schnitker(picture on the left), the four new plans are being offered because the previous postpaid plan was under represented. The new postpaid plans are designed to cater to different types of user, based on low end to high end usage.

Tom said that DiGi plans to capture a greater postpaid market share in Malaysia since the market is still small compared to the other countries like Singapore and Australia.

Find New Customers or Maintain Customers?

Mobile Number Portability (MNP) is expected to be fully launch in October this year and its advantage is that mobile users get to switch operators without having to change their number.

Previously, operators in this country have always focused on getting new customers, with more promotions and benefits offered to new customers over the past decade but that game plan has to change; it’s no longer about getting new customers but how to retain them and DiGi will have to work more aggressively to retain existing customers, as the market becomes saturated.

But how about services and user experience? In the same interview, Johan said that rather than re-inventing everything, DiGi could turn them into something new. He says that instead of getting broadband access from a normal DiGi shop, they could go to a computer store.

Time to Change

There are still a lot of mobile services that DiGi can offer. Some of them include mobile banking and payment, more local mobile TV programmes (entertaintment), Near Field Communication (NFC), information services, education, full track music download, social networking on mobile phones and more.

DiGi can be more aggressive in the prepaid area by offering similar benefits as postpaid customers enjoy. The only difference between postpaid and prepaid is that customers pay before they use the services on prepaid while postpaid customers pay the bill after using the services.

According to a source, DiGi is looking deeply into bundling its prepaid starter pack with mobile phones. The customers are free to move to any other telco but they will be tied on a contract via the mobile phone purchased. The source also claims that DiGi might even lock the phone to its network so customers won’t be able to use the phone on other networks.

The current DiGi Unlimited Data Plan is priced at RM66 a month and runs on Enhanced Data rate for GSM Evolution (EDGE). While Celcom offers its unlimited 3G plan at RM68, DiGi should seriously consider dropping the price of its data plan since there is only a RM2 difference for a much faster speed with Celcom 3G..

Happy is another product from DiGi and it competes directly with DiGi’s own prepaid services. This is good for the consumers and DiGi should consider promoting Happy at large and offer more value added services with it.

As for 3G, DiGi should offer something more than traditional 3G services out there, such as video calls, MMS, video messaging and unlimited broadband. Till today, the user experience on fixed broadband is much better by far than 3G because 3G was never designed to replace fixed broadband.

DiGi should focus on creating more applications and content since the 3G killer application is yet to be found. Rather than promoting a mobile broadband service, a telco like DiGi could tell people what they can do with their phone or why they would need 3G., and that’s much more important than selling the service itself.

As broadband becomes much more important in our daily lives, it will replace voice, one day. One thing for sure, broadband can carry data and voice but voice can only carry voice. Lets see how the DiGi “3G wave” will change the way we use our phone and the way we live – It’s time to change.