How DiGi Caters to the Community By Victor Siow, Sumitra Nair (DiGi Head of CR) and Tan Oon Keat (DiGi Head of Migrant Services) DiGi Telecommunications (DiGi) is a mobile service provider in Malaysia, owned in majority by Telenor ASA of Norway, with a 49% shareholding. DiGi provides a variety of mobile communication services, including postpaid and prepaid voice, SMS, international roaming, international calling card and mobile broadband. DiGi was a relatively late entrant into the mobile telephony market.
By the time DiGi entered the market, Celcom and Maxis had already captured a significant market share in the Malaysian industry. Perhaps because of this, DiGi chose to break with convention and focus on the pre-paid market and rural areas, where the other two operators have not dominated. This proved immensely popular, especially with migrant workers and transient visitors, as well as students who could not afford the monthly subscription of the normal mobile networks. Today, DiGi is widely acknowledged as the market leader in pre-paid calls and no-frills communications service.
Over the past few years, DiGi has aimed to integrate socially and environmentally responsible practices across business and organizations. Their corporate responsibility (CR) strategy addresses three areas: minimizing environmental footprint, engaging with community, and driving integrity and empowerment in the DiGi workplace and marketplace. In this case study, the focus will be on the ‘CR-in-products’ or social products that DiGi is offering to lower income and migrant segments in Malaysia.There are elements that fall in the ‘social products’ category — one is the services and packages highly targeted to the migrant segments, while the other is the mobile money remittance solution called DiGiREMIT. Serving the Migrant Market According to the Malaysian Immigration statistics in 2008, there are 1. 639 million migrants in the country which comprise 6.
47% of the total population. Many foreign workers and migrants are working at the bottom of the economic pyramid. As such, they face the hardships of adapting to a new country and language, working long hours with low pay, and spending a long time away from their families back home.These people are the foundation for the country’s economic development, and therefore they shouldn’t be discriminated against or discredited in any way.
Traditionally, the two incumbent operators have neglected to provide mobile services for this segment on the assumption that they are unable to afford them. When DiGi entered the market, it spotted an opportunity to serve this neglected segment, discovering that these migrants were willing to pay for communications to connect with their loved ones back home if they were offered affordable packages without any extras.DiGi designed packages that offered the lowest price for migrants to call their home countries of Indonesia, Philippines, Bangladesh and so on. There is also a customer call-center that caters to Indonesian and Indian migrants, and there are plans to extend this service to other nationalities, especially people from Philippines and Bangladesh. The employees at the call centers are fluent in the local languages, making migrants feel more comfortable when calling for technical assistance, or when asking about new packages and services to suit their needs.DiGi is not only providing them with lower rates but also ensuring that the level of service is of high quality.
Table x: International call charges for DiGi prepaid service Country| Cents per 30 secs| Country| Cents per 30 secs| Pakistan| 23| Myanmar| 45| India| 24| Sri Lanka| | Vietnam| 24| Cambodia| | China| 14| Laos| | Hong Kong| 14| Philippines| 25| Thailand| 15| Indonesia| | Nepal| 35| Bangladesh| | Some of the main challenges facing this strategy include defining product relevance and pricing and reaching the migrants scattered throughout the country.According to Oon Keat, Head of Migrant Services at DiGi, “Reaching out to the migrants is a challenge simply because their media consumption is very limited and not a lot of media actually touches them. So a lot of the advertising is done below the line. ” There has been SMS broadcast about reduction in call-rates and new services or packages to the migrant subscribers registered to DiGi.
In addition, there are highly targeted advertising campaigns in newspapers and magazines which cater to the migrant market, as well as an on-the-ground team of distributors and sales agents, nd banners at events held in migrant-centric areas to reach out to those who are not subscribers. DiGi also has event organizers, distributors, dealers, and other migrants as agents, selling prepaid DiGi scratch cards to the people in their communities. Product relevance and pricing is also important to ensure that the products fit the needs and price points of migrants who are typically on the lower-income bracket. According to Oon Keat, voice calls back to their home countries at lower prices is what they want most.So the packages that are designed for this segment are typically basic voice and SMS solutions without much ‘value-added-service’. He adds that “We always strive not to charge so much and to ensure the relevance of launching new services.
Relevance is the most important because they are not exposed to a lot of things and cannot afford a lot of things, so we have to target our services very carefully to suit their needs and price points. Therefore, we need to balance the needs with affordability. For example, DiGi operates an Interactive Voice Response (IVR) news service which is basically a pre-recorded news broadcast of the latest developments from countries such as Indonesia and Bangladesh among others. Migrant subscribers can dial in to the IVR news database and select the country to listen to a news broadcast from home. The call charges are only MYR 30 sen (about USD 8 cents) per call. DiGi has also been known to provide help to migrants whose home country has been hit by a disaster like the Yogyakarta earthquake in May 2006.
DiGi provides either free top-ups, cheaper rates or free airtime, depending on the severity of the disaster. This is a humanitarian gesture allowing migrants to contact their loved ones, and it improves the customer perception and brand loyalty as well. According with Sumitra Nair, Head of CR at DiGi, “Whenever there is a disaster in one of our migrant market home countries, we look at the magnitude of the disaster and whether the communication links are still up and running, and where it makes sense we try to offer some help to our migrant subscribers. DiGiREMIT DiGi and Citibank have partnered together to start a mobile money transfer solution called DiGiREMIT to facilitate the transfer of money from Malaysia to Bangladesh, Indonesia and Philippines via SMS. DiGiREMIT is designed to simplify the transfer of money using the mobile phone from anywhere and at any time to the widest distribution networks in those three recipient countries. Users can go to any DiGi center nationwide to register for the service and change cash which is virtually deposited into the phone in the ‘mobile wallet’.
There are then multiple payment delivery options including direct credit to accounts of local banks in the beneficiary’s country as well as cash pick-up at designated agents. DiGi provides the network service and front-end application while Citibank, as the settlement banker, will handle the foreign exchange transaction and transfer of funds across borders. Oon Keat highlighted, “We do need a wide financial network to reach the recipients in order for DiGiREMIT to work. Noel Saminathan, Director of Citi’s Global Transaction Services pointed out that “the easy accessibility of the service to the service will offer under-banked segments of our community, particularly migrant workers, the opportunity to improve their financial security for the benefit of their appointed beneficiaries and the economy of their home countries. ” There have been challenges in the adoption of this high-tech service among the less IT-savvy migrants.
Oon Keat points out that “traditionally, money remittance was done over the counter and this new service requires a behavior shift. ” The idea of money being deposited as credit into their mobile phones gives them an insecure feeling, understandably more so to those who are less exposed to new technology. DiGi is working to address this issue and hopes that it will be the popular alternative for money remittance.?
