DiGi is widely known among Malaysians as it is the oldest mobile service provider and third largest company with Celcom and Maxis being the leading companies in the country. It is the first digital cellular network service operated and launched in Malaysia that is established in May 1995 (Anon., 2013) . It is formerly known as Mutiara Telecommunications Sdn Bhd and has changed its name to Digi Telecommunications Sdn Bhd in January 1999 (Anon., 2013) . The Managing Director of Telenor Asia Pte Ltd, Mr. Sigve Brekke a Norwegian is the Chairman for Digi Telecommunications Sdn Bhd and 49% of DiGi Telecommunications Sdn Bhd is owned by Telenor ASA of Norway, a global telecommunication service provider (Anon., 2013) . Digi Telecommunications Sdn Bhd acts as a subsidiary of DiGi.Com Berhad. They provide services such as mobile voice, prepaid and postpaid plans, SMS, data plans and services, international roaming, international calling card and WAP services. For the past 5 years, the demand for DiGi has more than doubled from RM4.8 billion to RM6.4 billion with 10.5 million subscriber base (Anon., 2013) .
DiGi offers services that consist of basic packages that comprise of only mobile voice and SMS, to packages that are relatively expensive that include internet packages. The law of demand states that there is an inverse relationship between the price and quantity demanded (Sivagnanam & Srinivasan, 2010) . More people will demand for these services when the price of the package gets cheaper and vice versa. The law of demand also results from the substitution effect. As DiGi raises its price, the quantity demanded for other substitutes such as Celcom and Maxis will definitely rise. This is known as the substitution effect of a price change when ceteris paribus, if the price of DiGi package increases, consumers tend to substitute it with other cellular network service like Celcom and Maxis and contrariwise (Sloman, et al., 2012) .
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| Figure 1 |
When there is high demand, the movement along the curve will move downwards which means that the price is decreasing from RM88 to RM58 but the quantity increases by 13% as the subscriber hike up from 54% to 67% (Anon., 2013) as shown in Figure 1.
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| Figure 2: Substitute effect |
As shown in Figure 2, the movement along the demand curve will move upwards because the price of DiGi package increases thus demand will decrease.
Other than that, there are other factors that affect demand such as the price of other brands such as Celcom and Maxis and number of consumers in the market for the product as well as the level of advertisement of DiGi. If other substitutes like Celcom and Maxis decrease their price, consumers will not purchase DiGi because it is more expensive than the other rivals so they tend to substitute with other services which will shift the demand curve to the left and contrariwise. Also, since DiGi is the third largest cellular network service provider in Malaysia, a lot of people are using the same network service, so surely others will go where the crowd is as it is relatively cheaper to contact a person with the same cellular network so the demand curve will shift to the right. Besides that, DiGi has advertised their product vastly through television, newspapers, billboards, roadshows and many more. This has helped them to gain a lot of customers which leads to higher demand and profit as it influences an individual’s decision making hence will shift the demand curve to the right.
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| Figure 3: Determinants effect |
As for the suppliers, they have to meet consumers’ demands while producing at a profitable level. According to the law of supply, if other things remain constant, when the market price of a product increases, the quantity supply will increase too. So, when the demand for DiGi services increases, it relates to the price of the product that it is being sold at is profitable for producers and the number of units sold is high. Therefore the rising price acts as an incentive to DiGi to supply more as it can cover the marginal cost of producing the good. This applies the same to the decreasing supply when the price of the product or units sold decreases, the supply will decrease too as it cannot cover the marginal cost of production. As shown in Figure 4, when the price increases, the quantity supplied increases too and contrariwise.
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| Figure 4: Supply |
There are other determinants that affect supply which are technological knowledge and input prices. DiGi has invested a lot of money in research and development to improve their technology to serve Malaysians better cellular network service (Anon., 2012) . Technological knowledge improves the production techniques which lead to higher level of supply as it reduces the cost of production thus shifts the supply curve to the right as labeled in Figure 5. An increase in the input costs such as production costs leads to less supply thus shifts the supply curve to the left as in Figure 6. If the input costs decreases, then the supply will increase which will shift the supply curve to the right as in Figure 5.
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| Figure 5 : Supply increases |
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| Figure 6: Supply decreases |
Digital cellular network service used to be a luxury good to those who can afford it but as time goes by, it has become more of a necessity good. Even to those who have lower incomes, they will purchase basic services offered by DiGi that consist of mobile voice and SMS. This is because the price of electronic gadgets has become cheaper and affordable to everyone due to the competitive market that are producing lower price handphones. Last time, cellular network service had elastic demand as it is a luxury good where individuals will only buy it when the price is low but nowadays it has become an inelastic demand because it turns into a necessity to everyone as it is used for easier communication with people from all around the globe and for safety purposes. In an advanced country, when the income is high the demand for a luxury good will increase, this is known as the income elasticity of demand (Sloman, et al., 2012) . For instance, in Malaysia, the most developed area is Kuala Lumpur. In that particular area, most incomes on average is high so their wants for luxury goods is also high as well as socializing so digital cellular network service is considered as a necessity to them. This group of people will want to purchase DiGi’s postpaid package that includes a lot of features such as IDD, roaming internet, voice calls and SMS and many more which will cost RM148 per month for the postpaid package. So the demand is inelastic based on the high average level of income. If compared to rural places that have lower average income, most consumers there will only purchase the most important features like the basic package that consist of SMS and mobile voice like a simple prepaid package. So to them, more features means higher price, is not a necessity, it is more to luxury hence the demand is elastic based on the income. Due to urbanization, DiGi is trying to provide mobile network coverage to all areas as the number of users increase and tries to lower the price as a result of increasing new competition such as U Mobile (Anon., n.d.) . DiGi have a variety of data plans such as prepaid and postpaid that ranges from RM10.80 to RM148 so the demand for certain package is likely to be affected by the income of consumer.
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| Figure 7: Elasticity of demand of DiGi prepaid and postpaid services |
DiGi Telecommunications Sdn Bhd adapts the market structure of oligopoly. Oligopoly is the situation where a few large firms compete with each other and an element of interdependence regarding policy decisions might be present (Sivagnanam & Srinivasan, 2010) . DiGi is considered as an oligopoly because it is one of the few large firms that provide digital cellular communication service in Malaysia with over 10.5 million subscribers (Anon., 2013) . DiGi are interdependent with Celcom as they share the same network infrastructure (Anon., 2010) . Due to this interdependent relationship, DiGi must take into account that close rivals might follow-up any upgrading done, in terms of service and promotions. Examples, DiGi collaborated with Opera to offer new mobile services that is designed mainly for casual Facebook users (Arghire, 2012) and launched a promotion of extended reload validity period and unlimited free data charges when using WhatsApp Messenger for its DiGi prepaid smart plan users (Asia, 2012) . New firms that try to break into an oligopoly market have to go through hurdles of high set-up cost, ownership of resources and economies of scale. Why is it so expensive to enter the oligopoly market? Some oligopoly firms operate on such a large scale that the costs on starting-up in the industry for newcomers are so high that it would be fruitless to even start a new firm against the existing ones. So far, only U Mobile has managed to enter the market in September 2007 (Anon., 2012) . Besides that, big firms in this industry usually have the power to control the suppliers from supplying to the new firm. As for economies of scale, DiGi has collaborated with Ericsson to provide a connectivity platform of Machine-to-Machine (M2M) and consumer-electronics devices which enables them to derive revenues from extensive variety of devices by simplifying the process and reducing the cost of connecting DiGi and its enterprise customers with everything they need to deploy, manage and monetize (Kugan, 2013) . DiGi is also a differentiated product from its rivals in terms of the product image and services. DiGi is very famous with its yellow line and yellow mascot. DiGi offers a variety of services from local to international calls and also it has faster service in certain areas.
In conclusion, the telecommunication industry will continue to be dominated by DiGi, Celcom, Maxis and U Mobile if they constantly upgrade their services and serve Malaysians better products. DiGi will surely become the forerunner again if they increase efficiency and effectiveness of the company.
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