Digi’s success in Spain is well known and the truth is that, in recent days, we have not stopped talking about its great figures. However, it is also clear that its debt level is increasing year after year in parallel with its enormous growth. What does this mean for the company in the short and long term?
The way in which Digi is consolidating its presence in the Spanish market has not gone unnoticed. The operator has demonstrated an enormous capacity for growth and an unstoppable willpower that wants to take them to the top of the market. However, as we read in CincoDías, there is a not so positive aspect to their great success: the level of debt they are accumulating.
Number 1 in growth and debt
Entering a market as competitive as the telecommunications market is not easy. Digi came to Spain with the intention of making a name for itself and gradually moving forward. Achieving these objectives, however, requires some sacrifice. And, to become the operator with the highest level of growth in Spain, both in terms of revenue and customer volume, they have had to increase their debt.
Over the past 30 months, the company has seen its debt level increase by a total of 35.2%, leading to a debt of €1,517 million. Previously, at the end of 2022, the figure was set at €1,122 million, which represents a significant increase. If we explore these data more deeply, it is possible to see that, in 2024, the debt is increasing rapidly. Thus, between January and June of this year, the increase in debt has been 9.7%, as we can read in the newspaper we are using as a source.
What is causing the debt to increase?
As we can see from the success that Digi is achieving and its excellent prospects, everything is justified. However, it should be mentioned that the main reason for the debt is the high level of investment that they are carrying out with the intention of having their own fibre network that can cover more and more ground. The operator has been clear for some time about what their objectives are and having their own network becomes a trump card that, in the long term, will allow them to advance much more solidly than one can imagine.
At the same time, they are also making a multi-million euro investment in customer acquisition, adjusting prices to the maximum and reducing their profit margin. In parallel, to this must be added the expenses they face due to the organic growth they are experiencing. All of this has not reached its limit, by any means, but Digi is already planning to increase the investment. This will happen due to the purchase of 5G spectrum that the Romanian entity has made on the property that MasOrange had. With a figure of 120 million euros involved, it represents a high-level investment that, once again, will allow Digi to continue expanding and highlighting its value in the market.
With the data on the table, it can be seen that in this first half of 2024, the operator has already invested an amount greater than 173 million euros in Spanish territory. In 2023, they invested 328 million, so the investment volume continues to increase. It is all part of its plan to be an operator that does not have to depend on any other entity to be able to offer its fiber service to all users.
In addition to this investment, Digi is also making financial moves that will be very beneficial for the company. In April, they sold six million fibre optic access points for 750 million euros (a figure to be calculated later), they have readjusted the terms of their debts to obtain better conditions and in June they obtained a loan of 150 million euros from their headquarters in Digi Romania. Experts agree that there is no risk involved and that the operator’s leverage is in the same range as that of other operators. Therefore, it can be seen that Digi is moving forward, relentlessly, with the intention of meeting its objectives. The operator knows very well how it has to act and the level of debt does not seem, in the least, to be a problem.
