Initially targeting the Romanian diaspora, Digi shows it has bigger aspirations
Romanian-based telco Digi Communications has delivered significant growth in subscribers passing 22.4m in its three operating markets of Romania, Spain and Italy – up 16% YoY.
In its Q2 results, group consolidated revenues hit €418.6m while EBITDA rose 24% to €125.2m. While Romania dominated revenues (€255.8m), the telco saw its mobile base hit 5.4m (up 19%), confirming regulator ANCOM’s revelation the majority of the 775,000 phone numbers that were ported in the first half of the year were heading Digi’s (also called RCS & RDS) way.
Its fixed broadband customer base grew by 10%, from 4m to 4.4m. In May the telco became the largest mobile provider in Romania, holding 37.8% market share. It also now has the largest voice footprint covering 98.8% of the total population of Romania.
In Spain, where Digi offers mobile services, fixed internet and data and fixed telephony services, growth was even more rapid with mobile revenue generating contractual relationships (RGUs) hitting 4.3m (+25% YoY), internet services 1.1m (+69% YoY) and fixed telephony 364,000 (+63% YoY). RGUs are used because subscribers may take one or more services each.
In May, Digi Spain signed a deal with infrastructure investor abrdn to build a €300m fibre-to-the-home network in the south of the country. The partners will co-fund – plus potentially seek further bank financing – the build covering up to 2.5m residential units. One million has been completed so far and the balance will happen over the next three years.
Digi provides MVNO mobile services in Spain using Telefónica’s network. It uses Telefónica for its fixed offerings except where it can use its own GPON-XGS-PON network.
Digi said it was on-track with preparation for the launch of commercial services in Portugal in early 2024. This includes starting to roll out a fibre network and building on its long-term partnership with Cellnex to equip mobile towers. At the end of 2021, Digi was awarded mobile spectrum in Portugal at the 5G auction.
In Italy, mobile phone users grew by 11%, reaching a total of 391,000 RGUs – Digi is a Vodafone MVNO. Digi’s subsidiaries in Portugal and Belgium (in association with Citymesh NV) are in the process of developing the infrastructure ahead of service launches.
CEO reaction
“The second quarter of 2023 marked another period of significant growth for Digi Communications, with a remarkable evolution both in the markets in which we operate and across all service categories, in line with our estimates,” said Digi CEO Serghei Bulgac. “Our dedication to providing state-of-the-art telecommunications services at competitive prices, especially in an inflationary environment, has strengthened our position in both regions and helped increase our market share.”
Bulgac added that the telco’s loyalty programs had worked well in Romania and that the Spanish expansion was “promising”.
“Encouraged by this momentum, we continue to direct significant capital investment towards improving the mobile network in Romania and further developing our presence in Spain and Portugal, ensuring that Digi Communications’ growth prospects remain strong,” he added.
H1 results buoyed by solid numbers
The company recorded in H1 2023 revenues and other consolidated earnings of €809.3m (up 13% YoY) and adjusted EBITDA of €279.9m (up 14%).