Stock Name: DIGI
Company Name: DIGI.COM BHD
Research House: OSK

KUALA LUMPUR: DIGI.COM BHD [] share prices skidded in early trade on Monday, Nov 22 on concerns of stiffening competition from the launch of YTL Group's 4G mobile broadband services last Friday.

At 9.24am, DiGi was down 58 sen to RM25.05 with 1,000 shares done.

The FBM KLCI rose 2.88 points to 1,508.93. Turnover was 94.39 million shares done valued at RM71.21 million. Gainers beat losers 201 to 78.

OSK Research said on Monday,'' the entry of YTL Communication will raise the competition in the telco sector by several notches given the more attractive price points and the innovative bundling incentives on data/SMS.

The research house said YTL Communications benefits from the strong financial backing and support of YTL Power and its entry is likely to further marginalize the smaller WiMAX operators whose network rollout and subscriber growth remains patchy to date.

'Overall, we feel that YTL Communications' entry could potentially instigate a price war over the medium term as its headline tariffs are 44%-75% below the incumbents. We are not overly concerned over the impact on mobile broadband providers as YES' effective tariffs are consistent with regular offerings in the market and are likely to appeal to light data users although it could up the ante on broadband access prices,' it said.

OSK Research said its top pick for exposure to the sector remains AXIATA (BUY, TP: RM5.50), the only Malaysian telco that offers regional exposure to mitigate the rising competitive pressure domestically. It maintained its NEUTRAL recommendations on DiGi (TP: RM24.40), TM (TP: RM3.28) and Maxis (TP: RM5.40).