According to the Domestic Trade, Cooperatives and Consumerism Ministry, the  prices  of  prepaid  top-up  vouchers  should  remain  the  same  as  the current prices were inclusive of the 6% sales and services tax (SST). The Ministry added that the 6% GST only replaces the current SST and hence there  should  be no  changes  in  prices for  mobile  phone  top-ups.  It  further told  the  telco  companies  to  maintain  their  prices  once  GST  comes  into effect. (Source: NST)

Comments: Although we have not built in the impact of GST into our models because  of  the  uncertainty  over  the  implementation  and  the  treatment  of GST, we think that the market may be negatively surprised by the news due to anticipation that the GST cost would be passed on. Note that DiGi would have  been  the  key  beneficiary  from  a  full  GST  pass  through  as  the proportion of its prepaid revenue contribution is the largest among the top three  telcos.  We  nevertheless  think  that  a  status  quo  scenario  would  be positive as higher prices could negatively impact usage. Maintain Neutral on the sector with DiGi (BUY, TP: RM7.05) as our top pick both for its growth and yields.

Source: Affin Hwang Capital Research - 31 Mar 2015