The current situation in the telecommunications sector in Europe is on fire and the truth is that 2025 looks quite changing thanks to those alternative operators to large ones like Vodafone or Movistar that, little by little, are rearing their heads. One of them is Digi.
Speaking of numbers and according to the Fitch Ratings report, Alternative telecoms, led by Digi, will experience an average increase of 2% in their turnover, doubling the growth expected for the giants in the sector.
However, here comes «the catch» and that is that this accelerated growth has a price. Alternative operators will take on more debt than ever, with a leverage ratio relative to Ebitda that will reach 4.3 times in 2025, much higher than the 2.6 times of traditional companies like Movistar.
In Christian terms, this leverage ratio is nothing more than a measure that compares how much the company owes with how much it earns. The debts for these operators will be 4.3 times greater than their annual profits, so they are taking a great risk by borrowing significantly more than large companies.
But, among all of them, Digi is positioned as the main protagonist when it comes to growth, being the only operator that will grow double digits this year with an impressive 10.2%. To give you an idea and compare, Telefónica will foreseeably go backwards, dropping 0.7% in its income.
Of course, all that glitters is not gold and the report makes it quite clear that competition is fierce and the pressure is going to be noticeable in certain aspects such as broadband. Digi, among others, has to tighten his belt.
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Tags: Telefónica, Operators, Telecommunications, Movistar, Vodafone, Economy