All right. Good afternoon to all and nǐ hǎo [Foreign language]. Can you all hear me? I think there's an echo. Hang on. Okay. Sorry, am I still hearing echo? Yeah. Just hang on. Let me just. Is this better now? Yeah. Okay, good. Of course, good morning to those who join us from the West. Pleasure to have everyone in our final quarter briefing for the financial year 2021. I know many of you are waiting for the working day to be over as we usher in the Year of the Tiger. Let me just get your attention here to the screen. As you can see, our presenters here are also smiling a little bit brighter. Now, as always, we have Albern, CEO, and Otto, our CFO with us, alongside the rest of Digi kung fu masters, Praveen, Kesavan, Eugene, and Joachim.
Now, we'll be allocating about 20 minutes for Q&A later, so stand by with your questions, and you can unmute your mic for the questions later. Without any further delay, let me invite Albern to kick off the presentation with his opening remarks. Over to you, boss.
Thanks, Christine. Hi, good afternoon, everyone, and welcome to our Q4 2021 report. With me is the management team. I hope everyone is doing well. We can get started on the session this afternoon. I will be joined throughout the session with several of my management team coming in and adding views, definitely with CFO Otto, Kesavan, and the business leads, Praveen and maybe even one or two others that might come in as well. Let me start off with just giving you an overall view of 2021. Well, full year 2021. We made some strategic initiatives and focused around our growth areas. When we first started the year, we gave some guidance.
At the end, when you look at the financials and our key takeaways, you will see that we came well within our guidance. I want to start with two areas that we focused on. Our you know our theme is around keeping the customers connected, and ensuring that we had a leading position on the network through consistency and customer experience. Happy to report that we did both very well. We took some innovative products out during the period. We'll cover that later on during the presentation as well. We supported businesses, and I'm quite sure that we talked about B2B many quarters, but I think in this quarter we'll give you a little bit more insight into what we are doing on B2B.
We've also then focused on delivering our resilient results for shareholder value and investors. On the macro side, the proposed merger with Celcom Axiata Berhad is proceeding well. We won't be talking about that in this presentation. We'll focus this presentation and the questions and answers into our quarterly results. Also, the same applies to the 5G. As you know, there are a lot of 5G discussions ongoing. There's active discussions going on with us, the government DNB. The government has already made a statement that they are reviewing and looking at this section. Therefore, we will not be commenting or taking questions also in this area in order to respect that.
Just on the macro side, that is more related to the business and linked to the quarter. Borders are reopening is also what we are hearing, and we hope that that continues to progress in the right direction. Possibility of easing COVID-19 restrictions with SOP still being followed, of course. However, this sort of signals some recovery that we are all looking forward to. However, we will cautiously follow the guidelines that is being given by the government, and we'll ensure that we are focused around keeping our customers and our employees safe as we progress into the next phase. Next slide, please. Just on the quarter financial achievements. As I said at the start, in line with guidance, I think on service revenue we were...
We touched MYR 5.3 billion. We had for the quarter a -1.6% year-over-year in FY 2021, which was guided as low single-digit decline. We saw healthy growth coming from post-paid B2B and our fiber subs. Prepaid declined. Prepaid decline is sort of we see that sort of flattening out, which is important. In the last call, we talked about our focus around growing data subs on prepaid and Malaysian subs, and reducing the reliance or not so much of the reliance, but reducing our key focus into customers that are not sustainable and repeat customers. On ARPU trend on ARPU and on post-paid subs, we had slightly above 250,000 year-on-year growth.
On EBITDA, I'm happy to report that it was -2.3% year-over-year in a full year, which is also guided within our guidance of low- to mid-single-digit decline. On OpEx, the discipline continues. Our focus on managing and running our business efficiently while growing into key areas continue to do so well. Digitization, both at the front end, serving the customers and what customers see and our channels use to serve our customers, we continue to innovate. We saw effective collections during this period as well, therefore lower BFDD at 2.2%. On CapEx, we continue to prioritize CapEx, particularly on network. As you know, we did a 3G shutdown.
We'll talk about that in a while. We continue to take a leadership position, which was important. CapEx ratio at 12.8%. Slightly higher than previous year, but well within the guidance that we've given. Next slide, please. Sorry, just give me a second. Thank you. So on this slide, I wanna just talk a little bit about for the quarter, we have seen positive underlying trends. I think one of the areas. If you look at the boxes here, you can see that we have a flat Q on Q on our development. Total revenue was +1.5% year-on-year. Service revenue, we had a decline of 1.6% quarter-on-quarter.
We had a service migration which we probably felt had some impact on this. We will talk about this in a while. However, service revenue for the full year was well within the guidance of low single-digit decline, which was -2.1%. On a quarter-on-quarter, OpEx saw an increase of 3.9%, which was a planned to take into account all the activities that we wanted to do to ensure the consistent channels and activities were being carried out. On EBITDA quarter-on-quarter was -6.1%. However, on a full year basis, is what we focused on, was that at -2.2%. Profit after tax at a -2.9% quarter-on-quarter. ARPU I touched on.
Subs holding at MYR 10.3 million, postpaid at MYR 3.3 million. We had a good B2B increase, and we'll talk about that when Otto covers the financials. We saw a 9.8% increase year-on-year on B2B. Average gig per user holding at about 21%. Sorry, 21 gig, which is about 9% higher year-on-year. Next slide. Okay, sorry. It's a little bit slow on my screen. Now I see it. Thank you. Just sorry.
Over to Kesavan.
Yeah, that's right. Kesavan? Are you? I can't see you on the screen. Kesavan, are you-
I'm open. Thank you.
Okay.
Thanks.
Yeah. Over to you.
Good after-
Thank you.
Yeah. Thank you. Good afternoon [audio distortion]. Digi maintains its leadership position on network quality and consistency. Our coverage grew from 90% to 93.1% and 79.5% of coverage for LTE and LTE-A respectively. In this time, we also expanded our fiber footprint to 10,100 km, and our network catered for higher data consumption of 12% year-on-year in Q4 and 22% year-on-year for 2021. We delivered on our targets for new site builds and upgrades, keeping to our promise to our customers as part of our ambition. On the JENDELA front, we delivered 119 new sites and 2,191 upgrades.
We missed about 2% of those new sites, and that was purely due to the monsoon and floods that we were affected by towards the end of the year. We also delivered 1,179 site upgrades, and also have now started working on 1,039 km of new fiber build, which is also part of the JENDELA program, which comes under the clawback that we were awarded by MCMC. On 3G sunset, good to just announce that we have now successfully completed our 3G shutdown with no impact to our subscribers. Our network performance seems to be good. At the same time, we have also successfully migrated the spectrum from 3G to LTE, which has helped boost our LTE network performance. Next slide, please. Yeah.
I would just like to bring your attention to our modernization strategy, which is to move towards becoming a digital telco and going beyond our connectivity. As such, as you know, we started our modernization journey back in 2020 with network, where we started modernizing our network, radio access network. In 2021, we also started embarking on modernization of our digital and core IT platforms to support our strategy and ambitions. One such activity was to move our quota management feature into our billing platform, and this was scheduled and actually took place in October, late October 2021. However, we ran into some challenges which impacted our subscribers in terms of intermittent voice and data availability.
It also impacted our ability to deliver some of our order management capabilities. Here, we immediately came together as a company. We declared crisis, and then we all jumped in, and we took immediate measures to rectify the situation, especially on data and voice interruptions. Otto will speak a little bit more about it in terms of what that meant. Again, suffice to say that we have taken immediate measures to recover and to ensure our subscribers were supported during this time. We activated two actions. One is to create a 24/7 hotline service for subs to reach us and then for us to support them during this challenging period.
At the same time, we also kept our subs informed on the status and progress of recovery via our digital channels and social media. I think Otto will take that later on in terms of what that impact has brought to us. But for now, I'll leave it at that, and I'll hand over to Praveen.
Hi. Good afternoon. On the consumer front, Digi has shown consistent growth across our main consumer segments. In the postpaid business, we've had five consecutive quarters of net adds, and this has been predominantly driven by our focus on the retail side of the postpaid business. Q4 was driven by our focus on the Jom Hebat internet sales campaigns, where we focused on the MYR 60 postpaid plans, family lines and device bundles via Pakej PowerJimat and PhoneFreedom 365. We've also had a good quarter and year on contracting efforts, where over a third of the postpaid customer base is now on a contract.
In the prepaid business, we have seen a year-on-year growth in the Malaysian active subscriber base, which is a result of our continued focus on growing this segment and the focus on attracting quality retail customers. This has partly offset some of the declines in the migrant segment, which we believe has bottomed out. In Q4, we have seen good momentum from December as part of our Jom Hebat internet campaign as well. As you know, we started the fiber business in the beginning of 2021, and we've grown six-fold since Q1. Our main focus continues to be on cross-selling and upselling 24-month fiber deals to our existing customer base, specifically the postpaid customer base.
The blended ARPU for the fiber business was MYR 111 in Q4, and this is a good sign of the additional ARPU we're able to add on top of the existing postpaid accounts. We expect to continue to see this business to grow going into 2022. I now hand over to Eugene for the B2B segment.
Good afternoon, everyone. Happy to report that, Digi Business or B2B registered 4.8% growth for the full year of 2021. For quarter four, it is +8.0%. You can see from the chart on the left, in FY 2021, we have steady growth every single quarter. Right? But the momentum picked up significantly in quarters three and quarter four when COVID lockdowns started to ease in Malaysia. Segment-wise, we did well both in SMEs and the large enterprise segments. Right. For SMEs, with the PENJANA traction, we continue to drive SME digitalization bundles. Right. We're also happy to see the FTTO, fiber to the office, momentum really picking up, and particularly encouraging to see that a lot of those pickups are also in Sabah and Sarawak, respectively.
For large enterprises, the team has secured hard-fought and significant wins from corporate leaders in Malaysia from the likes of Petronas, CIMB and Hartalega. For subscriber growth, we see a +8.9% growth in FY 2021, mostly due to stronger base management and enhanced channel acquisition momentum. Finally, the levers for this growth are, number one, clear focus on the channel in order to drive mobile acquisition, practical bundling of digitalization products, for example, in e-commerce, in cybersecurity and fleet tracking, and finally, also clear bets on selected verticals for non-mobile business solutions. In fact, at that segment or that area registered 89% growth on a year-on-year basis in business solutions.
Finally, I think we are also systematically gaining market share and mind share among large, B2B corporate segments, demonstrating the ability and the willingness to partner advanced connectivity solutions with our customers and also the growing confidence and trust in the Digi Business brand. Thank you very much. I'll now pass the time over to Otto. I'm sorry, Joachim.
Thanks, Eugene. Good afternoon, everyone. Just a quick snapshot of some responsible business highlights from the year. Firstly, ESG continues to be a very strong focus area and priority for Digi management and board, which sees full scrutiny at the board level and is part of our main strategic goals for the company. We continue to build high standard in ESG reporting. We've now received a certificate of excellence, I'm proud to say, on best materiality and ESG reporting in Southeast Asia. A very recent news, some of you may have noticed this, Digi has been listed on the Bloomberg 2022 Gender-Equality Index. We're one of only four companies who made the index out of over 400 companies from 45 countries. That's an increasingly proud area for us.
Digi serves 10.3 million customers. It is important that our business is also representative of the base that we serve. Finally, we also completed a sustainability data integrity index exercise that gives us a lot more quality into our input into our ESG reporting. On the critical network connectivity, Albern and Kesavan have mentioned that at the start. Last year was a year of continued restrictions driven by COVID, meaning that more customers had to work and learn from home. It was important that we collaborated with both MCMC and the industry through JENDELA efforts to make sure connectivity was enjoyed by all our customers and also increased our coverage to underserved areas through the USP program. The floods in Malaysia have been quite tragic towards the end of the year.
Our teams have been kept very busy to make sure that we are able to keep our infrastructure at uptime, at a maximum uptime, so that we are able to serve our customers as well. On future skills and digital safety, as more and more digitalization becomes part of everyday society and everyday life, we have to continue our focus in these areas. I invite you to read the Yellow Heart Third Survey for Life Under COVID for Children. It's a very important topic for us and a very interesting initiative with some good key learnings and insights for all stakeholders to consider. I've already mentioned before how we support the society's recovery on COVID-19 and the floods.
We continue to partner with civil society and the rest of the industry, to ensure that, more and more of our community members who have been aggrieved by these, tragic disasters are able to get back on their feet. This include also helping our dealers and our retail network, recover from the effects of this flood when they have been hit. Thank you for this. I hand you now to the CFO, Otto, for the rest of the financials. Otto, please unmute.
Hello, everyone, and Gōng Xǐ Fā Cái to everyone. I don't know how that sounded, but I tried.
It's okay. It was okay, Otto. No problem.
Yeah. I'm not gonna walk you through some more details on the financial side, going down the P&L. I'm pleased to report that we had a good steady quarter in Q4, where we see that the momentum, the good momentum we have in Q3 in the core segment continue to drive our performance in the fourth quarter. Before I go into the details, I just want to mention a few factors that have influenced our business. To start with what Albern mentioned on the easing of the COVID-19 restriction. That's obviously great news for the country and for all of us.
We do see that from a business side, that has resulted obviously that more people are going back to work and hence has reduced somehow the top up of consumers who now have been working and not been home. That has had some effect on our group. The end of the Prihatin also ended in the third quarter, as you know. That was a very successful program where millions of the so-called B40 segment bought Digi data packages with a subsidy from the state, and hence was able to communicate during the lockdown.
In the fourth quarter that was lifted and we see some effect on the gross add where some consumers go back to a smaller package. Then the outage that Kesavan mentioned. That happened as you may have seen in the media also at the end of October. We have estimated the financial impact of that difficult to estimate, but to a low double-digit impact on the PNL on the top line and going straight through the PNL. It's difficult to quantify this. It's touching reloads and all of those consumers that are affected. It was predominantly prepaid, but we also probably see some effect on the subscriber base. I'll get back to that later.
Happy to see that we are back. We see now the momentum is fully back. That the momentum that we had before the shutdown is now back. We are back on track after that unfortunate incident. Just also on the closing of the 3G, very successful. That happened at the end of the quarter and has little consequence on the financial this quarter, and we hope it also will have very little consequence into the next quarter. Going now just to the subscriber base. On the left-hand side of the graph, you can see that the postpaid segment continues to have pull from the market.
We added this quarter 50,000 subscribers, and for the year, we have added 253,000 subscribers. This is driven by manufacturers and basically the whole postpaid segment. We do see pull from our smart bundles we have. We also do see a positive effect from the entry point of the postpaid, where we are now more active. Like Eugene also mentioned, a pull from the B2B segment and also the fiber. The whole segment in postpaid is contributing. On the prepaid side, we saw a little bit softer quarter in the fourth quarter, losing 96,000 subscribers, after we had a good quarter in the third quarter.
This is, like I said, a small part of that may be due to the outage. We also see that there is still some erosion from the migrant and low-end market segment. We see a flattening out if you take the two last quarters. We absolutely see a flattening out of the decline that we have had in the last quarter. I remind you that this is actually part of our strategy to focus on the higher end, the more financially attractive part of the postpaid market.
On the ARPU side, the effects that I mentioned with the COVID and the end of COVID effects and the Prihatin, we see that both the postpaid and the blended ARPU has gone down. Postpaid almost MYR 1.8 for the quarter, whereas the prepaid ARPU is very resilient, thanks to the strengthening of the quality of our subscriber base. Next, please. How does that translate into revenue? Well, first of all, I would like to make everybody aware of a milestone that we passed this quarter. I think it's the first time that actually our postpaid revenue is higher than our prepaid. Our postpaid base has been growing steadily, as you know, over the last five quarters and over a long time.
Now it's actually larger than the prepaid in financial terms. In total, the revenue for the quarter was at par with the last quarter, driven by very strong handset sales. That's good for us because through the handsets, we get new customers to contract that will stay with us for a longer time. That's very positive. The postpaid revenue was almost flat in the quarter, slightly down due to the ARPU effect, but positive effect from the subscriber. Whereas the prepaid, you can see, was down by about MYR 20 million, and we believe most of that, like I said, is due to the outage effect.
In total, the service revenue was down 1.6%. If we exclude the outage, we believe that the service revenue was flat-ish in the quarter. If I look at the year, an increase of 3% for the total year, that's on the right side, where we can see that we have improved the quality of customer base. We see that effect. The postpaid effect decreased by 1.5%. That's much better than the previous year, where it declined by 3%. We see that the prepaid declined by only 2.7% versus 12.4% last year.
We do see the effect of our strategy working, and we also see that when it come to the EBITDA, that this has a very little impact on the EBITDA, but we now have a much stronger subscriber base with more than half in postpaid and a much higher quality in the prepaid base. Next, please. On the cost side, we continue to be disciplined spending money where it creates most value, focusing on network expansion and modernization. Although we had a small increase in cost in the fourth quarter, that was mainly driven by more handsets. If we normalize the OpEx result, they were more or less identical in the third and the fourth quarter. Next, please.
This, if you take the flow-through from the top line and the cost side this quarter, we can see a decline in the margin, in EBITDA margin, down to 46.7%. If we normalize this, we are around 48%. It all in all, we have a margin of 47.5% for the whole year. It's down from 50%, but I think it's a good performance in a very difficult year marked by COVID and those restrictions. Next, please.
The good performance in the fourth quarter allowed us to reach yet another strong quarter in terms of profit after tax, reaching MYR 304 million in the fourth quarter. That's up almost 9% compared to the same period last year and slightly down compared to a very strong third quarter as well. It's worth mentioning that part of this effect. There was a positive tax impact of MYR 41 million that came from two areas, a deferred tax adjustment and also a tax audit that has been completed where we could release a provision.
I will not comment all the details on the right-hand side, but there you can see which areas that have contributed to the increase of the gross profit. Sorry, the profit before tax. Next, please. Investment, we continue to invest in the network and in modernization. Higher investment as we announced in the fourth quarter. In total, the investments CapEx for the year stands 12.8% compared to total revenue. That also translate into very good cash flow margins, steadily over 30%, throughout the year, with a little dip in the fourth quarter due to a peak in CapEx. We intend to maintain the same level of CapEx in the next year. I'll get back to that in the guide.
Next please. Here is a little indication of where we spend our money on the CapEx, just so you have an overview. You see that we have been steady around MYR 800 million over the last years, where we spend the majority of the part in modernizing the network, and that is both increasing coverage and also increasing capacity and speeds. And then you see the yellow part where we also dedicate a significant part of CapEx to modernizing the front end and the back end of our business, with the target of becoming fully automated within a few years. Next please.
I'm also pleased to confirm that the board of directors have approved a dividend of MYR 0.039 in the fourth quarter, which is close to a 100% payout ratio. In total for 2021, we have contributed close to MYR 1.2 billion to our shareholders, and a dividend payout ratio of about 100%, while still investing in our network and in the modernization. We can do that also supported by a very strong balance sheet and a conservative gearing, and also with the strongest rating on the financing side. Next please. If I can sum up the performance in 2021, we see service revenue, the core element of the service revenue, improving.
We see the client start up in 2021, driven by postpaid B2B fiber and the Malaysian part increasing the quality of our base. We see EBITDA declining a little bit, but catching up at a much smaller decline in 2021, and still very strong margins. That is also driven by strong performance on the modernization on PFTT and also very good network. CapEx to sales, we continue to invest around 13% or MYR 800 million every year to support the leading network in Malaysia to support the 3G sunset to support modernization. On top of that, obviously, we are very active, as Joe mentioned, on the JENDELA side. Next, if you take the next.
That brings me into the guidance for 2022, where the positive momentum that I described, mobile service revenue, we see that continue into 2022, where we expect to return to growth after a 1.6% decline in 2021. That is driven by the core segment with postpaid. We believe we'll continue to deliver a strong performance in B2B. We will continue to grow very carefully our fiber business, where we also use that to bundle with mobile. The whole postpaid segment will contribute to that growth. We also see that the prepaid segment will continue to flatten out. This will translate into an EBITDA which is around the 2021 level.
We'll continue to modernize our operations. We do see some increased costs that will be offset by some increased costs in the network modernization and the investment in the return to growth. We will, like I said, keep our CapEx level around the 2021 level. Next. We are looking forward to this year to continue the strategy that we have been executing now in 2021, which we see is working very well. We'll continue to focus on the core segments which I described, also continue to modernize our business, maintain the network leadership, and also continue to have a leading position in responsible business throughout all elements of responsible business.
If I can sum up steady 2021 financial achievements with EBITDA margin of 47.5%, normalized 38%, and dividends of MYR 1.2 million to our shareholders. Steady momentum in all our core segments. We have been awarded, received a lot of acknowledgments of having the fastest network, the most consistent network in Malaysia. That is something we would like to keep, and we are also want to remain leading in terms of responsible business. Thank you.
Thank you, Otto. Thank you management for the presentation. Now we will proceed with Q&A session. We already have a couple of hands up. Over to you, Fung, from CIMB. Kindly unmute yourself and you can proceed.
Yeah. Hi, good afternoon, guys. Thank you so much for this conference call. Three questions from me. Firstly, in terms of the growth in the Malaysian active prepaid subs, that continues to look very good. Can you give us a bit more color as to where these subs are coming from? And also tell us a bit more on the quality of these subs and how confident are we that, you know, these are the type of subs that will stay on our network going forward? That's question number one. Number two, if I look at your postpaid business, the ARPU keeps coming down, and I note the comments around the higher entry-level mix.
Are we seeing any ARPU uplifts for prepaid subs that migrate to postpaid, either upon the migration itself or through you know any upselling initiatives over the next six, 12, 18 months down the road? Or should we be looking at this more from a subscriber churn management perspective? My third question on the network. The LTE coverage has gone up a bit throughout last year. Does it have to go up to 97% by the end of this year to meet the JENDELA targets? Or is that a coverage as a whole for the entire industry? I see that you are also keeping your CapEx slightly elevated going into this year.
Is that all JENDELA related or are we sort of spending as well, to keep our leadership position on the network front? Yeah, those are my three questions. Thank you.
Yeah. Fung, thank you very much for those questions and good to have you on the call as well. Maybe on question one and two, we can take Praveen first. Some comments from you. Then on this last question, maybe a combination of Kesavan first and then Otto, please. Praveen.
Hi, Fung. Thank you for the questions. On the first question with regards to the growth in the active prepaid subs in the Malaysian segment. Multitude of things are happening, but let me at least address the part of the quality part first. The focus has been on the retail aspect of the business. We have slowed down and detached from rotational SIM, so one-time SIM type of use cases. The majority of our customer base, we are steering towards a tenure of more than six months, and that's where we are currently very in a healthy state. The mix is representative of the population demographics. We are across the country.
Where we have seen a little bit more growth is of course from East Malaysia, the East Coast, where we also are spending more efforts on the distribution side. Those are the kind of things we are doing. Now, last year also, as part of Jaringan Prihatin, we were on the ground a lot more, and we have seen growth in that segment of the B40 segment that has chosen the Digi brand. And this is where we are continuing to maintain a good, active, and steady prepaid Malaysian base. That's our response to the first question. With regards to the second question on the ARPU for the postpaid base, I just point the attention to a few things that we're doing in the market.
The majority of our sales on principal lines is hinging on our MYR 60 Digi postpaid plan. That is the main attraction for us in the market. Together with that, you can also sign up for a family line. Our family line start from MYR 20 a month. This is of course it'll contribute towards the account value, the ARPU in the account. That generally also shows the flattish ARPU trend on postpaid at the moment, although we may be grossing more on the family segment. However, in terms of the growth in the ARPU, in Q4 as well as going into this quarter, we continue to sell on phone bundles where most of the subsidies and the device bundles come in at about MYR 90 . That's one.
Number two, you've also seen a little bit more color on our fiber business, where we are naturally adding close to about MYR 100 on the postpaid accounts. In terms of prepaid to postpaid conversions, that typically goes into the entry-level postpaid plans, which is at MYR 60. Anything below MYR 60 at this point predominantly still stays on our prepaid business. Thank you.
Okay. Before we go on to the next question, Praveen, just a quick follow-up for you. Right. You were saying that Digi is gearing towards more of the subs with six months tenure on the prepaid side. How do we do that? How do we sort of identify these subs and get these subs?
Of course, unable to say that at the point of acquiring a customer. It also goes into how we sell the SIMs, how we are incentivizing our channels in order to attract real customers who intend to keep the SIM. Now, once the customer is on board with us, our targeted marketing systems will then go in to ensure that the customer stays active, reloads on time, and we incentivize them to stay connected every month.
Okay, got it. Okay. Yeah, on to the network question. Yeah, thank you.
Yeah. Maybe I can start off with the network question, and then Otto can jump in. The ambition to hit 96.9% as part of the JENDELA is still there, and that's due for this year. By 2022, we're supposed to hit the target. It is more of an industry total pop coverage rather than a specific individual OpCo as we see it for now. Right. As far as the investments are concerned, a couple of things. We are still guided by the USP and clawback funds that we have gotten to work on the JENDELA program. As far as our CapEx is concerned, it's more to cater for our growth in our network to maintain the quality and the capacity that is needed.
Of course, we would see this being delivering, and contributing to the JENDELA ambitions as well. It's a combination. Otto, anything to add?
We will also in 2022 invest a little bit more in the modernization of our IT platforms. I will not give any detailed figures, but this is the journey that also Kesavan mentioned earlier, where we started this year. We will continue to invest in that to actually build the platform for the next 10 year+ .
Okay, just a quick follow-up on that as well. When we sort of say the CapEx will be about, maybe about MYR 830 million or MYR 850 million, is that a net CapEx figure after USP clawback or is that a gross figure?
We said around the same level as 2021, which was MYR 814 million. USP project are not included in this. This is pure CapEx on our account.
Okay, understood. Thank you so much, Otto, Kesavan, and Praveen, and Albern as well. Yeah.
Thanks, Fung.
Thanks, Fung. Over to you, Frank from DNB, please.
Yes. Hello, and good afternoon. Thank you for hosting this as a Teams meeting and for taking my question. My question goes to speaking to the guidance for 2022. My take, if you could help me out a little bit on the thinking behind the EBITDA element in particular. Given the signs of macro recovery, the favorable, you know, potentially the upcoming market consolidation, even the ongoing stabilization and shift towards post-paid continuing. We have the top line trend that should be favorable, as you point out in the guidance.
On the cost side, you do have operational leverage, strong underlying OpEx trends and on the positive side, and of course, there are some inflationary forces there as well. If you could help me kind of pan out the details a little bit on how you reach the flatness on the EBITDA side, which seems a little bit preferring to err on the side of caution here, perhaps, in a year with many moving parts, including the 5G joint venture coming on stream, and also the merger.
Yeah. Thank you, Frank. First of all, we have not included the effect of DNB because we don't know yet what that will be. Neither we have not included any effect of the merger. This is a forecast for Digi as a standalone. We have included some costs up until the closing. A little bit of that is included. But in general, in order to achieve the growth, we foresee that we'll invest a little bit in achieving that growth. We also will continue to spend more in the network to keep our leading position on the network and also continue to expand the network.
There will be, as you said, there is some inflationary pressure also these days that we also have factored in a little bit. But yeah. All in all, we think that, yeah, like I said, all those factors will lead to that. We believe we will achieve an EBITDA around the same level as in 2021.
Yeah. Which is the level that we are actually comfortable with, just to add, Frank. I think that will allow us to facilitate the growth ambitions that we have, especially in the areas that was highlighted earlier from Eugene and Praveen. We are, you know, ramping up on fiber. We are ramping up on the B2B side. These are probably necessary stuff. We have been efficient and we continue to be efficient so that the EBITDA at that level doesn't indicate any less efficiency or focus on that. As Otto is pointing out, I think it's just investing in the right areas for growth.
Thank you.
Thank you.
Thanks, Frank.
Thanks, Frank. Now over to you, Alex from Maybank, please.
Thanks, Christine. I have three questions.
The first is regarding your B2B segment. Could you give a bit of guidance in terms of what does that segment account for in terms of percentage of your postpaid revenue or your prepaid or even your digital revenue? Could you give us a bit of guidance so that we can actually see how substantial that impact to the overall group? That's the first one. The second one is regarding your prepaid trajectory. I noticed your guidance. You're indicating growth coming from your postpaid, your fiber and your digital, but you've left out the prepaid. Now you've indicated that you know the decline is flattening. I'm just wondering, do you see further contraction actually going into this year?
Is that why you're looking at a flattish service revenue for this year? All right, that's my second question. My third question is regarding your depreciation. For the full year, it's quite substantive. I think that's accelerated depreciation because of the 3G write down. But I'm just wondering, going into next year, what should we be looking at in terms of a running number for your depreciation?
Thank you, Alex.
Yeah.
Otto, over to you.
Yeah. In terms of B2B, it is becoming obviously more important in terms of total revenue. We are pacing at 5% of total revenue representing B2B. That is the level we have today. It is becoming an important part of our business and an important part of our growth. With regard to prepaid decline, yes, we believe it will flatten out. But we believe we will have some decline also in the prepaid in 2022. But the postpaid growth will more than compensate for that, leading us actually to a positive growth all in all.
On the depreciation, I suggest that we come back to you with Christine after the call.
Okay. That's wonderful.
Yeah.
Can I just try to squeeze it. Yeah, that's wonderful. Can I just squeeze in just one question on the, on your merger? I know you will not, you are a bit reluctant to give further comments on that. Could you give any, some guidance on when will? Which month will the completion? Do you think the completion of this thing will be done? You've given indication probably in second quarter, obviously, but, like, which month? Are we looking at May or June towards the back, a more backloaded event? What are some of the? What are the, things to watch out for in terms of milestones that, you know, we need to be watchful for?
Yeah, I can take that. I think we keep the timeline that we had from last summer. We still believe, we're still hopeful that timeline will be realized. The process is progressing according to plan. Exactly which month is not possible to say. These are very, very significant processes. We're not able to say any month or so. We're hopeful we'll be able to conclude the transaction within the second quarter.
Yeah. Alex, maybe I'll just Praveen, you wanna add on question number two on just the prepaid growth areas?
Yeah. Perhaps just a little bit more color also on prepaid. In quarter four, as Otto had mentioned earlier, we had the low double-digit estimate impact from the system outage. Most of that would have also impacted our ability on prepaid. You know, we estimate the impact really hit our prepaid base, but we've done well to recover post the incident. December was better, and we entered 2022 in a much more positive way on prepaid. I think prepaid, we expect it to continue to at least pick up, and the retailing side will continue to do well, at least based on our estimates. Thank you.
I see. Praveen, on the prepaid side, generally, you are looking at a decline, right, in numbers, as migration to postpaid and, well, as well as the fact that people are not having more than one SIM cards nowadays.
Also compounded with any macro effects on the B40 segment that also has impact to us. Thank you.
Okay.
That's why Alex, as Otto is pointing out, that the migration and the movement, and the balance that Praveen talked about, we sort of look at it overall, and the postpaid growth is actually then coming in, 'cause it's really the same customers potentially moving into family plans and other plans that we have. All in all, you will see that growth coming.
Yeah. Okay. Great. Thanks very much. That's all for me.
Thanks, Alex.
Thank you, Alex. I will open questions to the floor. Anybody who have new questions?
Christine, can you hear me? Hello.
Yes, I can. Who's on the line?
Oh, okay. Hi, Danny Chan here from Credit Suisse. Thanks for doing this call. Actually, I have a question for you guys.
Your, uh-
S-sorry, uh-
More towards the ne-
Sorry, before you continue, we are struggling to hear you, and also your introductions. Could you just repeat your name and could you repeat the question 'cause we're struggling to hear you.
Yes. It says muted.
Not really.
Oh, dear. Okay. Well, I'm on here and then.
Yeah, maybe try again. Sorry, just try again. If not, you can take your question directly with Christine, and we'll definitely respond to you, just try maybe.
Sure, sure.
Test your voice again.
Can you try and speak again?
Yeah, I think he's struggling on the.
One second. Is this better?
Hi, Danny. I think it's you on the call.
Yeah.
Danny from Credit Suisse. Okay.
Is this better?
Yes, it's better.
Is this better? Okay.
Yes. Go ahead.
Sorry, I'm on the move, and I'm actually using a new line, so I guess I was in a different spot. Is this better now? Can you hear me?
Yes.
Yes, yes. We cannot say no now.
Yes. Carry on.
Okay, guys. Actually, just a quick question on your network architecture again. I'm just wanting to really find out in the event if, say, if you have to sign up with DNB because of pressure from regulator or, you know, there's even if there is indeed a business case, right? May I find out a bit more about your monetization strategy? Because based on what DNB is guiding us, right, seems as you gotta pay the lease on this new network almost immediately. We're thinking about, you know, an additional cost for 5G and really there's implications, right? Could you give a clear guidance from a management point I mean, is it even necessary to have that network for your business today or, you know, maybe more so soon?
Thanks, Danny. We will receive your answer. We receive your question maybe to Otto first and then, supported by the rest.
Yeah.
First of all.
Sure.
Yes, we will definitely continue to invest in 4G. 4G is still the main carrier, will remain so for quite a long time, will be an important carrier and we definitely want to and we need to meet the expectation and the need from the consumers on that. We will continue to invest and then clearly over time those investment will go down. It's difficult to say at which pace. On the 5G we're not able to comment at this stage. Anything you want to add, Albern or Kesavan?
No, Danny, as soon as we know, we will come back, Danny, on all these questions and clarification. I think for now we have to leave it at that.
Okay. Fair enough.
Thanks, Danny.
Thanks, guys. Good luck. That's a real tricky one, I'm afraid.
Thank you.
Thank you, Danny, and drive safe. I'm open to the rest if you have any questions. Yeah, there's a hand up.
Hi, hi. I think I had my hand up. Sien from AmFunds. I come from the fixed income team, so I just wanna get your view on, you know, financing your CapEx going forward. From looking at your financials for 2020 and 2021, the OCF, operating cash flow, was sufficient to fund the CapEx as well as your dividend payout. Also noting that, you know, borrowings for Digi has been coming down. Just wondering, are you all looking to tap the bond market to fund perhaps future CapEx, or are you still comfortable in using your internal funds? Or are you rather waiting the developments on the merger front as well as DNB fund? Thanks.
No, I think we have sufficient cash flow from operating activities to finance our CapEx. When it comes to the merger, I cannot answer now. Both companies, Digi and Celcom, have strong cash flow. We'll get back to that later. For Digi, we will fund from operating cash flow.
Okay. Got it. Thank you. Wishing all of you happy Chinese New Year. Thanks.
Thank you for that, Sien. Christine, are you back online?
I am back.
Very good. Should we wrap up on that note? Do you have additional question? I can't see.
Sorry.
I think we have one more.
One last question from Azmi.
Sure.
We end the call.
Hi. Hi. Can you hear me?
Yes, we can.
All right. Very simple thing. I think just now during the CapEx segment, it was mentioned that you guys are actually targeting to be fully automated within the next few years. Correct me if I'm wrong, but basically if that's the case, are you able to share, like, what kind of cost savings you can actually achieve once you actually reach that particular point? Yeah, that's all. I was a bit curious on that point. Thanks.
I can answer it, then Albern you can come in. It's a very good question. I think we've been investing in this for a long time, in modernization. Often starting with the customer side, we try to make the customer journey as easy as possible for the customer. Then moving into the back-end side, making that a second priority, where we how to serve the customer. Then obviously all the way to G&A. We have been doing that for a long time. We constantly invest on the IT side and modernization. As you all know, I think that space is the possibilities to automate are growing every day with new solutions.
We will continue to look at all those elements. Giving a year when we will be fully automated is difficult, but that's an important part for us. You can see that also on our operating figure. I think we have one of the lowest OpEx to sales ratios definitely in Malaysia and others, and that is due to our efforts and investments in modernization over a long time consistently.
Okay. Sure. Thanks.
Thank you, Azmi. I think that concludes our briefing today. Thank you so much for all the questions coming in from everybody, and we wish you a good Chinese New Year break. To those celebrating, thank you, management team, for being with us today.
Otto, that's how you say it, Otto.
Thank you very much, Christine. Happy holiday, guys. Thank you.
Happy Chinese New Year, everyone. Take care, everybody. Thank you so much for joining us this afternoon. Bye.