Good afternoon, everyone, welcome to Digi's Third Quarter Financial Year 2021 Earnings Presentation. It's nice to see about 77 guests today, and I hope you enjoyed the new corporate video that we've just shared earlier. Quickly, let me introduce you Digi's management team. We joined today, as you can see here on the video, is Albern, our Chief Executive Officer. Otto our Chief Financial Officer, this is the first quarterly briefing for Otto since he joined Digi.
We are also joined by Praveen, the Chief Marketing Officer, and Eugene, the Chief Business Officer. Last but not least, we also have Joachim, the Chief Corporate Affairs Officer, and Kesavan, our Chief Technology Officer. That's almost the entire Digi Jedi for you today. Okay. Let me just give you a quick reminder. All your mic is actually muted. We will unmute it closer to the Q&A sessions. Alternatively, you can use the chat box if you have any technical issues or you have some questions in advance. Over to you, Albern. You can start the presentation now.
Yeah, thank you very much. Thank you very much, Christine, and good afternoon, good morning to all of you dialing in from various parts. Welcome to our third quarter results. We will cover very quickly some of the key highlights, and then we will open up, as always, for questions at the end. We will take a view from myself all the way down to consumer and business and then from the financials before we wrap up for the day. Let's take the next slide. Thank you. Allow me to just give you a little bit of an overview of the first nine months of 2021. Basically, it's been a year where we've been many lockdowns, many challenges from the pandemic, and it's still ongoing.
While there are signs of improvements, we have stayed committed to ensuring that we keep focused on empowering societies and ensuring that we have the right internet offerings and digital solutions for customers. What we have seen here is on our areas of three blocks that I always introduce to all of you and on modernization. We have completed 100% new and upgraded 4G sites, which we have rolled out as part of JENDELA. This has underscored the prioritization of investments into moving into 4G, which is also something that all of you would have heard in the analyst briefings from MCMC on JENDELA's plans as well. We've also basically kept pace with the 3G sunset program and move everyone into 4G eventually by end of the year.
Happy to also report that we have done quite well on our touch-free operations, which is modernizing the IT systems in terms of ensuring better customer experience. On the growth side, we had a quarter which actually saw data growth increase by 25% year-on-year. We've also seen some good traction on Malaysian subscribers, and this was in the last quarter update. We shared a little bit of our strategy plans in this segment, so we've seen some of that. B2B continues to grow.
The revenue growth here close to 4% year-on-year. A dividend per share of 0.11 in total, which is to our valued shareholders, representing 100% of our dividend payout ratio. In responsible business, Joachim will cover some of it later, so I won't repeat, but in a nutshell, we continue to support the country recover from the pandemic.
We also ensure that we are providing relevant services. However, I'm happy to report one new item that here on this page is that we have achieved 100% vaccination of all our retail employees, thus making it extremely safe and also ensuring that our customers can engage and seek help from our stores when they walk into our stores safely. On the next slide, I'll just give you some key highlights of our performance for the quarter.
First of all, Q3 saw encouraging performance from service revenue. Although you would see that there was some decline in device and digital revenue, our service revenue improved from a quarter-on-quarter to 0.2%. In a full year, as per guidance, it is still at -2.3% year-on-year. OpEx reduction, we achieved a -3.5% quarter-on-quarter on the focus on efficiency continues.
The lower OpEx, mainly due to timing effects in sales and marketing spend, but also we have mitigated some of the cost increments. EBITDA was encouraging by 6.1% quarter-on-quarter. PAT also then at 11.8% quarter-on-quarter improvements. Reflecting a slightly of a recovery, I would say, on the top line, but also prudent cost management, and key focus on segments that we wanted to move in and continue to develop both usage on our base of customers but also some new customers and new based on our new portfolio.
We'll cover some of this later on in the slides. We will stick with that. When you come to blended ARPU here, you will see some of in line with quarter-on-quarter at MYR 23. We had a good subscriber growth of close to 150,000 subs quarter-on-quarter. Taking our total subs close to 10.4 million.
Postpaid continues with a good acquisition, and we'll touch on that when it comes to consumer. B2B, as I mentioned, also not just revenue growth, but also subscriber growth quarter on quarter. The data network, which is the network part that I touched on and also talk on the next slide, continues to show that Malaysian users' first choice of connectivity on internet remains on mobile with 22.5 GB usage.
Next slide. On the network, I want to talk a little bit about what have we done to ensure that while there is pent-up demand and more requirements from our customers, how do we actually serve our customers as good as possible to ensure that they have a great experience. Site quality and performance. On this area, we're leading on the network from a consistency and speed perspective.
That's been now a couple of quarters we've been able to do that. Stable network performance despite the growth. I mean, the growth is good, but we need to make sure that we've been upgrading at the same pace so that customers can have a good experience. From a national perspective on digitization, we continue to deploy on the network, as I mentioned earlier.
In JENDELA, 100% of greenfield sites from a target perspective and brownfield targets were met for JENDELA, and we are on track to meet targets under the USP program as well. On 4G LTE and LTE- Advanced coverage, that takes us then to 92% of 4G LTE and 75% on LTE-A. On fiber, we are still continuing that focus. It has been a bit slower this year, however, we are now close to over 10,000 kilometers of fiber.
Spectrum efficiency continuing to drive network experience. We continue to focus on how we actually serve our customers. On the 4G integration in existing 3G sites, that's been very much as per the plan. Praveen, I'm going to hand over to you to talk a little bit about what does this mean from a consumer and what are the activities that we did as well. Praveen, please.
Hi, good afternoon. On the consumer side for Q3, our efforts were anchored in three specific areas. The first one was on driving quality gross adds across postpaid, prepaid, and the fiber business. A lot of the efforts here were driven by base management activities using our targeted marketing platform to maintain the current base and also work on driving ARPU upwards. We have introduced several bundling deals in the market in terms of promotions on prepaid as well as postpaid and fiber, which we've mentioned for the last couple of quarters.
We've been very focused on the bundling activities there. We've also made introductions into segments where we believe there are future opportunities for growth. These are specifically on the youth segment. We've introduced a package earlier as well as refreshed offers in the migrant segment through our proposition called Raja Kombo.
The second pillar is on the clear focus on retailing efforts both in terms of efforts within key market centers as well as outside in secondary towns. We're enabling more of our retailers to be digitized on the app as well as submitting orders online during the lockdown period. Earlier on, as you entered this call, you've seen a video about our fiber fleet. We've been able to deploy more people on ground to specific areas where there are ports to also drive up fiber installations. This goes hand in hand with continuous modernization of the channels, which is perfect opportunity for us now as the market reopens. On the digital side, we continue to emphasize efforts on MyDigi, targeted marketing in there, and increasing billing convenience.
We've done direct integrations to the Touch 'n Go app in the last quarter as well as several auto-billing promotions for the postpaid customers. As we close the quarter, we've, of course, introduced several new promotions which you also see on the right-hand side of the screen. This is the cue for me to now hand over to Eugene to give you a perspective on B2B.
Thank you, Praveen. In quarter three on the B2B side, we are able to grow revenue +9.0% year-on-year and also to grow overall B2B subscribers by +7.4% year-on-year. This is a result of the healthy growth in both our core mobile now also with the FTTO acquisition and the opportunity also to upsell the SME segments into digital, leveraging the government's SME PENJANA program. Right. For large enterprises, Digi B2B has in quarter three accelerated the expansion of our deal book, securing new contracts in FSI, financial services institutions, in oil and gas, and also in manufacturing sectors.
Finally, in parallel to the focus on core growth of the business, Digi has also developed our brand-building campaigns for Digi B2B through digital radio and also printed media. We've also further developed strategic and key partnerships in order to further the business and the reach into the ecosystem, including with Astro, with Touch 'n Go, with Oracle NetSuite, and also with Cisco. Now, if I may, I'll pass over to the next presenter.
Thank you, Eugene. Joachim here on responsible business. Just a quick update on some of our key efforts over the last quarter. As Albern mentioned at the start, we have been continuing our efforts as part of the industry as well to drive society's recovery during the post-COVID recovery period. As Albern mentioned as well, prioritizing safety of our employees and all stakeholders has been of key importance to us.
We're now pleased to note that we have 100% vaccinated all our frontliners at the retail store to enable us to serve our customers a little bit better. A few words on some support for government initiative. We've continued our COVID-19 aid to support the Mercy Malaysia deliver medical and vaccination needs across the country. We're continuing, of course, now more than a year, our free 1 GB productivity data daily to all Malaysians.
We have been actively participating in government initiatives such as, the recent Pakej Remaja, Pakej Peranti, Keluarga Malaysia, and MYBaikHati, to improve internet accessibility and affordability for more. On the diversity and ESG front, we have achieved a higher MSCI ESG rating to AA recently, and this highlights the ongoing efforts to also drive leadership, ESG, and sustainability practices.
Recently, we've also become a signatory to UN Women's Empowerment Principles, and a member of the 30% Club in Malaysia to strengthen our corporate leadership on equality and inclusion. On future skills and digital safety, these are our flagship efforts. We continue to partner with the Ministry of Education, UNICEF, and MDEC, to boost digital and coding skills recently through our Boleh Code initiatives as well.
We have launched our first Yellow Heart Life under COVID-19 for Children Online with the Values and Challenges survey, and we believe it's an important insight into the life of a large segment of our users. We hope this will be useful for a good range of stakeholders in Malaysia as well to understand how Malaysian school children generally are coping with new digital lifestyles during this pandemic. Including how it's affecting their own literacy and resilience.
Throughout the year, there are ongoing webinars and initiatives on internet safety for school children and university students. Finally, on an important topic on climate, we recently held, and Digi was a foremost participant in the telco roundtable on climate change with six telco CEOs in partnership with Climate Governance Malaysia and the CEO Action Network, which the Digi CEO also leads. Thank you. I will now hand over to Otto, CFO for the financials. Otto?
Good morning, everybody. Good afternoon. I have met some of you already, and I look forward to meeting more of you going forward. Today, I will walk you through in little bit more detail on the third quarter results and also present to you a revised outlook. Before I start, some of you may have noticed that we have started to disclose a fact sheet where you can find all key financial and other KPIs information in one place. I hope you find that useful. Let me start with this slide showing the development of subs and ARPU. I'm very pleased to see the good development of the subscriber base. After several quarters of decline, we now had an increase of 148,000 subs in the quarter.
There are many factors behind this increase, but we clearly see that the more focused strategy and stronger focus on which segment to prioritize and also the simplification and the strengthening of our product structure is giving good results. The stronger focus is also allowing us to align much better the whole chain from distribution to marketing. You can see that on the left-hand side of the graph where, you can see that the postpaid base has been growing consistently the last five quarters. On the prepaid base, you can see that we have declined from 7.66 million to 7.11 million over the last quarter. In the last quarter, as you can see, we had an increase of 86 million subs.
This is due to the decision we made to exit the low-end migrant segment, which is high rotational, high churn, and focus on the higher end of the market. Underneath this decline, we have actually had, at the same time, a consistent growth of our Malaysian prepaid customer base. Today we have a much higher quality of the customer base.
That you can see on the right-hand side of the graph. If I can start with the yellow line at the bottom, which is the prepaid ARPU, you can see it is stable and increasing, and that is due to the improvement of the quality of the customer base. If I included a few more quarters at the beginning, you can actually see it has increased from MYR 28, MYR 29 to MYR 34 over the last period.
On the postpaid ARPU, you can see there is some pressure on the postpaid ARPU, but it's quite stable. Part of the decline, and that is both prepaid and postpaid, is also due to voice and less roaming now in the COVID era. In total, the blended ARPU, you can see that it's increasing and resilient, and that is due to the improved quality of the customer base, with constantly increasing postpaid customer base with higher ARPU, and an increased quality of the prepaid base.
Next page, please. In this page, you can see the development in terms of core service revenue. If I start with the bottom line, you can see what I described when we decided to exit the migrant segment. We had some quite big declines at the beginning. You can see down 7%-8% at the beginning.
We have seen that slowly we have actually recovered. Now we can see the last two quarters, the prepaid core revenue has actually increased. The same development is also on the postpaid revenue, but not so dramatic, where we've had a very stable increase quarter-on-quarter of revenue. Also the last two quarters with growth. Last quarter, 1.6% growth in postpaid revenue.
The top line is the total. You can see that the percentages do not fully add up. Here I have also included the digital revenue, which has gone down. I will explain that on the next page. It's comforting and it's good to see that the consistent execution of our strategy is showing results quarter by quarter, and that we have now high growth in two quarters in a row. Next page, please.
Yeah, I will not comment again on the prepaid and postpaid segment. Let me comment a little bit on the digital revenue, which you can see has decreased from high 80s at the peak down to MYR 65 million this year. This is a clear strategy to reduce or to avoid excessive gaming on our own platform. We have introduced limits on reloads on the elements that we can control on our platform.
However, we are not obviously able to control what consumers are doing on their own. They have other ways to do that. We want to reduce that revenue. We think this revenue level will stay around this relative, more stable going forward. You can also see that handset and hardware revenue has been high over the last quarters. That is obviously related to Peranti.
Good high hardware revenue is good because we mostly sell hardware with bundles, where consumers stay with us for a longer time. We think that the hardware will go a little bit back to the previous level going forward. Next page, please. Over to the cost side. You can see we've had a pretty nice decrease of cost in the last quarter, 10% or I think MYR 88 million.
Let me explain that in a little bit more detail. On the COGS side, that's the main bulk of the reduction is coming from the COGS, MYR 74 million. That consists of mainly of three elements. The first one is what I described previously, the high volume of hardware or the declining volume in the last quarter of hardware and digital revenue. As you know, these segments typically have pretty low margins.
When revenue is going down on those segment, that translates directly to lower COGS as well. In addition to that, there has been lower traffic on voice and roaming due to COVID-19. Finally, there was an adjustment in the second quarter between revenue and COGS. Net effect zero, but that has also some effect. The COGS level you can see here, the total cost level you can see here on COGS, remains relatively stable if you look at over the whole period.
We also had a decrease in OpEx of MYR 14 million, and you can see the QoQ development here on the right-hand side of the graph. Some of the decrease is related to timing and activity level. During this COVID period, most of our employees have been working from home, and some activities are obviously lower for that reason. For example, building cost and others.
Some cost reduction is coming from the lower activity. Some of also the sales and marketing costs are timing effects of spending. With regard to the increase in staff cost, that is more a technical thing. Our headcount is stable, we don't foresee any increase in underlying personnel costs. We also see a small increase in doubtful debt allowance, that is also related to the much higher volume in the recent quarter of handset sales volume. Next page, please.
The development that I explained on revenue and cost side, you can see here is translating to a nice increase of EBITDA increasing by MYR 45 million to MYR 788 million, which is a margin of 49.7%. Also on a normalized basis, both Qo Q and year on year on the EBITDA is more than 3%. On the right-hand side, you see the development of depreciation and amortization.
You can see that there has been a slight increase in the last two quarters. That's mainly due to two reasons. One, we have somehow higher ROU cost. The second one is accelerated depreciation related to the 3G sunset. As you know, we will sunset our 3G at the end of the year. That effect will stop at the end of fourth quarter. Next page, please.
For the same reason as the increase in EBITDA, we see that the good performance is flowing through all the way to the profit after tax with an increase of MYR 33 million, I think 12% to MYR 313 million in the quarter. That's a margin of 19.8%. We can also see that if I take the yellow bars here on a year-over-year on a normalized basis, we've also had an increase.
On the right-hand side, you see the same reasons for the development. This is year-on-year where on the operational side, higher revenue and lower costs and OpEx is leading to an increase. Then we had quite a high one-off adjustment in the third quarter last year which now has done a negative. Normalized, we actually also had increase of profit after tax. Next page, please. If I look at our investment activity, we actually have a very high level regarding investments. You don't see that here or in this quarter. We have invested MYR 170 million to expand and improve our network, and also our IT systems. We do foresee an increase in the next quarter and into 2022. I will explain more on that in the coming slides.
On the right-hand side, you can see that the improvement of EBITDA and the lower investment is leading to a very good development of operating cash flow, standing at MYR 618 million for the quarter and 39%. Next, please. Coming to the outlook for the year. We are now at the end of the COVID period, and we go into hopefully a good, much better period for everybody with society opening up and much more economic activity around.
That represents both upsides and risk. In general, we are positive obviously to this development. With regard to the impact on our business, we maintain our guiding with regard to service revenue from low to single-digit decline. On the EBITDA level, the improved performance in the last quarter, we reflect that in our guiding.
We upgrade the guiding a notch from mid-single-digit decline to low-to-single-digit decline. What I explained on the CapEx to sales revenue, the previous guiding was 14%-15%. We stand at 11% today. We believe that the guiding for the end of the year is 13%-14%. As I explained, there is a high activity with expanding network coverage and quality around in the country. Also related to the government's JENDELA projects. There will be a peak in the fourth quarter.
The reason for guiding down is not that we are cutting CapEx, but it's rather a delay in a few of the IT projects, IT-related projects. We will see somehow also increased level going into 2022. However, we don't see an increase in the underlying level of CapEx going forward. This is just variations between the quarters. Next, please.
If I can summarize the key messages from this third quarter is that we continue to see good result from consistent execution of our strategy, which allows us to maintain a positive top-line momentum and to continue the modernization pace of our operations. The second point is that we also continue to support society during this very difficult COVID period. We have delivered 100% of the JENDELA program with investments to improve and expand the network in the country. Also offering, by the way, higher data capacities, also offering 1 GB extra per day to all our customers for productivity. For example, students needing to study, they can do that. They have 1 GB free every day to use for that.
Last but not least, we have also been able to serve our customers both through physical channels and not the least digital channels in this difficult period while keeping all our staff and our customers safe. As Albern said at the beginning, we are now at 100% vaccination rate among all our frontline employees. Last point is that we also managed to maintain our leading network position. I think it was actually the fifth time in a row where we land as the leading telco in Malaysia with regard to download speed. This we do through very clever investments from our CTO technology team. That sums up my presentation today. We are ready to take questions.
Yeah. Thank you very much for the questions. Can you hear me? Sorry about the echo.
Yeah. Okay, you might have to mute also. Thank you.
Okay. Yes, please use raise your hand function and you can introduce yourself, and you can begin now. Let me just see. I see some hands. We will start with Ranjan. Over to you, Ranjan from JP Morgan and then Foong.
Hi. Good afternoon. It's Ranjan from JP Morgan. Two questions from my side. Firstly, for the 5G build-out in Malaysia, if you can just share what the update is in the development of 5G infrastructure. When do you think services can commence? The second question is on competition. Have you seen the stabilization of price points or are you still seeing some aggressive behavior in the market to gain market share? Thank you.
Can we have Kesavan first and then Praveen for second question. Thank you.
Yeah. Ranjan, thanks for the question. On the 5G build-out, we are working very closely with DNB and of course as you know the build-out itself is being carried out by DNB. What we know is that they are on track to launch in Putrajaya, Cyberjaya and KL by end of the year.
Praveen.
Yeah. Ranjan, on the question on competition and pricing in the market. If you refer to what we are doing on prepaid and postpaid, we believe we are at very competitive prices today. The market is somewhat, as you know on prepaid is mostly unlimited at MYR 35. Our products come in at MYR 30 and MYR 35 today on prepaid and that has been there for several quarters already. On postpaid, similarly, you don't see us throwing prices at this point. Very competitive prices in the market for the total value we provide.
Okay. Thank you for that. Can I just have a quick follow-up? On the 5G side, if you're expecting the launch by the end of the year, have there already been wholesale agreements in place? Should we expect 5G plans in the market before the year-end?
Hi, Ranjan. Thanks for the question. That's still in progress. As per the last update, the technical and the commercial discussions are still ongoing with the DNB industry. We will come back to the analysts, and to you, once we have a little bit more finalization of that. As you know, industry, the DNB, and MCMC are still in their discussions.
Okay. Got it.
Thank you.
Got it. That is good. Thank you, Ranjan. Now over to you, Foong, please.
Hi. Good afternoon, guys. Foong from CIMB. Thank you so much for the call. Three questions from me. Firstly, I wanted to ask about the Asian subs growth. We have had a couple of quarters, right, where we are seeing very positive traction here. I wanted to, again, ask, where are these subscribers coming from, especially looking at the third quarter numbers.
Are these new subscribers that are coming in due to the COVID-19 work-from-home, study-from-home requirements? Or are you getting these subscribers from other telcos? If so, which segments or geographical areas are they coming from? That's question number one. Number two, can you talk a bit about the traction that you've seen in the fiber broadband business? Whether more subscriptions have been mostly coming through the bundles of fiber and mobile bundles?
Are there any visible evidence that getting into the home has enabled Digi to gain new mobile subs from traditionally non-Digi households? That's question number two. The third question, which is looking a little bit more into the medium to longer term. Once we get past meeting the JENDELA targets, my question is, will our CapEx drop to maintenance levels for the 4G network? Or do you foresee continued CapEx to upgrade capacity and continue to evolve the 4G RAN technology in the coming years? Those are my three questions. Thank you.
Hi, Foong. Praveen here. I will take the first two questions. On the Malaysian subs growth, I will cover the perspective on both prepaid and postpaid. On prepaid, the efforts in the last few quarters have been, on one hand, on the existing base. We have been driving the active usage. We've been keeping the number of inactive users also at a lower level, and this is driven a lot by the targeted marketing campaigns that we can do. That's on the base management activities in prepaid.
At the same time, we have been increasing our efforts on prepaid retail. The ability to go outside of key market centers, areas where we have ample growth opportunities. For example, like the East Coast of Malaysia and the northern parts of Malaysia. We're increasing the retail touchpoints in order to drive new customers.
Of course, the majority of these new customers tend to buy a new SIM or a new number, but we also have a percentage that will switch from other telcos. There, we don't see any regular patterns today. That is on the prepaid front. I've also mentioned that we have put in additional efforts to drive our growth in the youth segment, which is a big area of opportunity for us, and we will continue to do that.
In the third quarter, specifically for prepaid as well, we did see attention on the Jaringan Prihatin program, and we did our best there to promote it to our existing base, as well as encourage other customers from elsewhere to choose Digi. On the postpaid side, we continuously aim to be net adds positive quarter-on-quarter. A lot of this is driven by our family propositions today.
These are customers who will choose a new line or port into us. It is a combination of family lines as well as our budget device bundles and the high-end PhoneF reedom proposition. That's a bit of color and perspective on the Malaysian subs growth. On the question on fiber. We have mentioned before, our focus is promoting fiber to our postpaid base.
We have just over 3 million customers there, and we are promoting it to them because the offer and the main proposition, it is really unlocked for the postpaid base. To your question then, the follow-up question on, is this predominantly from the postpaid base? The short answer is yes, because that is our focus, and we have mentioned that before. We do not, at this point, have any new evidence on the second question of whether this is attracting non-Digi households because our focus is on upselling to our base first.
Okay.
Third question.
Otto first maybe. Yeah.
On the CapEx development going forward. You have to divide the CapEx into several categories. If you take the network CapEx and the core IT CapEx to cater for more traffic. With DNB, over time, yes, 4G CapEx will go down. We're still working with improving the 4G and as you know, 4G will still remain an important carrier for a while. We will continue to invest in 4G and improve 4G. Then on the core IT side, to cater for all the traffic that comes from the radio, obviously, we will continue to invest in radio, to meet the expected traffic increase. This will take a while. Kesavan, perhaps you want to comment on this?
Yeah, no, Otto, spot on. Actually we do see the traffic for 4G will continue to grow over the next two to three years. Of course, with the coming in of DNB, we will monitor that closely to see how the traffic shifts, before we decide on further investments. You're right, Otto. That will be closely monitored. The investments then also, as Otto mentioned, will shift towards more of the IT tracks, given that new use cases will be coming up with 5G. That's how we see it at this point in time.
Understood. Thank you so much. Can I just maybe put in one more question, regards to the migration of the 3G subscribers over to 4G? You mentioned that there's a remaining 300,000 subscribers. Do we expect to incur any significant costs to do this migration? I mean, do these subscribers have 4G phones and 4G capable SIM cards already in their hands?
Praveen, you want to take that or I can comment on the technique.
Yeah. I'll take that. I think the 4G SIM cards, we are proactively swapping out anybody who has old SIM cards. We don't expect that to be a cost driver for us for this base. In terms of offers in the market, we are promoting the current offers that we have. We have attractive phone bundle programs on postpaid, and that's where we try to drive these customers to choose it. The majority of these customers who are in this group of the 300,000 are currently very low in terms of data usage. This will be an ongoing effort for us.
Understood. Thank you so much, Praveen, Otto and Kesavan.
Thanks.
Thank you. Now, can I hand over to Alex from AmBank, please?
Thanks, Christine. I've got two questions. One is regarding the postpaid ARPU trajectory. Given the fact that you have family plans coming up and you've got the Keluarga Malaysia program also that has been introduced by the government. Do you see the trajectory moving downwards for the postpaid segment? That's my first one. The second one is regarding the merger with Celcom. Is there any updates on that? We don't hear very much news lately. Just wondering, are there any issues, any hurdles that you may want to give us a bit of insight on?
Hi, Alex. I will take the first question on the postpaid segment and the ARPU trajectory. A few quarters ago, we talked about the introduction of a new postpaid portfolio. That postpaid portfolio, we have brought in the value proposition of the principal lines at MYR 60 and the family lines start from MYR 20 and it goes upwards. MYR 20, MYR 30 and MYR 45.
We have been successful in the last few quarters in attracting the family unit to us. Families of on average about two to three lines joining us. Of course, they start off the family line proposition at about MYR 20. I believe that it's a matter of time before some of this stabilizes. We do not foresee at this point that we will be pushing for lower ARPU. We are aiming for consistently being net adds positive every quarter at the moment.
That is the trajectory we are aiming for. The family proposition also provides ample opportunity for us longer term to drive some of these customers upwards. As their needs increase, we're able to also increase their service commitments with us and potentially even move them to their own dedicated principal lines at some point.
Yeah. Praveen, given the fact that the packages are lower per user on a family line, could you give us a bit of idea on what is the percentage overall to your postpaid subscriber base for all the net adds? Surely with the lower package price points, surely at a certain point, the average pricing for that segment will be moving downwards. Would I be right in assuming that?
Today, we don't disclose the family composition and the percentages. Of course, the law of numbers, yeah, you are absolutely right if you say that we are only crossing all family lines. That's not the case. We are very active on the principal proposition. We are very disciplined on our principal proposition at MYR 60 and above, and that's where we see the majority of our take-up at this point.
Okay, thanks.
Okay. With regard to the merger, the work on the merger goes on as planned. As you know, these kind of processes take time, and we're hopeful that we will meet the deadlines that we have indicated previously with approvals and closing towards the second quarter next year.
Okay. Thank you very much.
Thanks, Alex.
Thank you, Alex. I think, Foong, do you have follow-up questions? If you do, please go ahead.
I think I just left my hands up, but never mind. Can I just add in one more question? With regards to the student package of MYR 30 for 20 GB over three months, I think you guys have just recently launched, and that's going to be valid till April next year. What should we expect in terms of the earnings impact? Is it going to be positive or negative? Is it not going to be very substantial?
Praveen, you first, I can add on.
Yeah, sure. Foong, sorry, some hesitation on who will take the question. Let me start with at least how we see it. For us, I think we see lots of opportunity to increase our youth segment market share. We see that opportunity, especially even for those below 20 years old. This is, on one hand, it is an industry-standard offer. All operators are providing the same exact offer. For us, we see that it could be an opportunity also to get into a segment that maybe we don't have a large market share in.
The proposition today requires that you have a Prepaid NEXT plan. You must buy a SIM with us, and then you can add this on top. It gives you a 90-day validity. You can add as much data as you want as you go. At this point, we don't see this making any adverse impact on the overall composition of our customers.
Yeah. Foong, maybe just to add, Praveen covered all the right points. I think from a consumer perspective, I think this is also a segment that the government is trying to help in the post-pandemic period. Therefore, I think when the industry looked at this made sense for parents to also enable their kids to connect, should there be a hybrid model from school and study from home and everything else. This was a perfect timing to do that. As Praveen talked about from a practical business point of view, it's also a segment that we want to look at, and we have continuously looked at it before anyway, as Digis. It was good for us.
Okay, understood. Thank you so much, Albern and Praveen.
Thank you. Now we have Izzati from Macquarie, please.
A much better upgrade version of Prem.
Hi, Izzati.
Hello. Can you guys hear me?
Yes.
All right. Just one question from me for Eugene, I guess. Just wanted to understand on the B2B side of the business. Going to fourth quarter, do you guys expect the traction will also be higher coming from the enterprises? How's the conversation going with the businesses? Do you see traction coming from the larger corporations going into fourth quarter? More so from the SME side? I guess from the SME side, they're barely surviving. There's so many news flow on them trying to pick up the pace. Survivability is the key concern. Which segment you guys will be focusing more, I guess, in the fourth quarter?
Hi, Izzati. Thanks for the question. I think I will not make any speculation except to say that in quarter four, I think as what Otto has said earlier, we see that the earlier restrictions due to COVID has basically been lifted. The SME and in the market, I think SMEs are returning back to the office. There's a lot more opportunities for us now to engage the SMEs.
A lot of the discussions that were postponed previously due to some of these restrictions actually is no longer present or will no longer be as tough in quarter four compared to quarter three. What we are also seeing among the large enterprises is that they are also in the process of initiating relatively big digitalization projects or larger, what we call, business solution projects. We definitely see that in some of the key sectors that we are part of, which includes basically the banks, oil and gas, and also some of the manufacturing clusters.
Okay. All right. Thanks.
Thank you, Izzati and Eugene. Now I open to the floor if there is any more questions from anyone else.
It doesn't look like it, Christine. It's very good.
Yeah. This is very good. Thank you so much, everyone, for tuning in. As usual, you can actually reach out to me if you have any questions. I have also pasted the link to our website for quarterly financial results, which includes the fact sheet that we have published this quarter. Thank you all, presenters, and I see you all next quarter. Happy Deepavali.
Thanks, everyone. Take care. Thanks for dialing in. Take care, everybody.