Wed. Apr 24th, 2019

Digi, the Romanian mobile that conquers the Spanish | Economy

Digi, the Romanian mobile that conquers the Spanish | Economy


Digi does not advertise on television or bus shelters. Nor has any stand in any hypermarket. But despite that advertising discretion is the second mobile phone company that has grown the most in the last year after MásMóvil and the first virtual mobile operator (those who do not have their own network) independent. In 2018, it added 440,000 more customers and reached 1.34 million, twice the 609,000 it had two years ago.

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Subsidiary of the Romanian operator RCS & RDS, landed in Spain in 2008 taking advantage of the large Romanian immigrant community -about 800,000 people- and initially directed its offer to that public with prepaid bonds that included international calls. In recent years, it has diversified its objectives and right now 69% of the new registrations are subscribers of Spanish nationality.

"At first we were very focused on the immigrant public but over time we have gained the trust of the Spanish thanks to the network of stores that recommend us and because we fulfill what we promise," says Marius Varzaru, CEO and CEO of Digi en Spain.

And it is that the real commercial strength of the Romanian operator is a network of 4,000 collaborating stores, from booths, computer stores to food stores, which sell a small catalog of rates, mainly prepaid. For a commission they receive from Digi, the store is responsible not only for selling the SIM card but also for dealing with possible doubts or problems that arise for the customer.

"We do not have agreements with the big chains or advertise on TV. We depend on word of mouth. The client relies more on the owner of a store that he goes to almost every day. And he knows he can come back if something goes wrong, he has not understood something or he believes that some condition has been broken, "explains Varzaru.

Marius Varzaru, CEO of Digi Spain.
Marius Varzaru, CEO of Digi Spain.

Another key to Digi's success is its simplicity. Its catalog of rates and products is very small, which facilitates commercial management. It does not make offers or promotions and its contracts do not have small print. It also rejects the increasingly common practice of the big operators of the so-called "more for more", that is, improve services (more mobile data or more fiber speed) without the client requesting it in exchange for a price increase. .

A very simple catalog

Digi has basically three products. Digi Combo, with which it was implanted in Spain, which are bonuses to navigate and call from the mobile both national and international destinations, for between 5 and 20 euros per month. This is the product designed for the immigrant population. Last March launched unlimited Digi, with unlimited mobile and data calls (3GB, 6B or 20GB) for 10, 15 and 20 euros per month. Finally, last September, launched Digi Net, fiber connection of 30 Mbps and 500 Mbps, for 25 and 30 euros per month, although only in the Community of Madrid.

Each of these products can be combined with each other, simply adding the price of each of them. But no one is obliged to contract the entire package (fiber and mobile), and if you do, you can unsubscribe at any time from any of the contracted services.

"We want customers to be sure that they will always pay the same. When we have an improvement it is automatically applied, it is not necessary that the client calls us and we do not raise the price. But if one day he wants to leave, we do not make a counter-offer for him to stay. Our prices are what they are. And we do not have others. Neither for those who want to go or for those who pass from other operators. "

This simple offer has not only captivated new customers, but attracted those of other companies. In 2018, it obtained 140,000 subscribers from companies with networks (Movistar, Vodafone and Orange), and from other operators specialized in the immigrant segment such as Lebara and LycaMobile.

Digi headquarters in Alcobendas (Madrid)
Digi headquarters in Alcobendas (Madrid)

Profitable business

That growth is not incompatible with profitability. Only two years after his landing in Spain he was already making money. It will close 2018 with revenues of 120 million euros, 30% more than the previous year, and an EBITDA of 17.9 million, 4.7% more. Since 91% of its customers are prepaid, the average revenue per subscriber (ARPU) is 9.5 euros, well below the market.

Despite this, the head of Digi in Spain argues that they are not a low cost operator. "We are cataloged as low cost, although I prefer to say that we are an operator value for money (good service at a fair price). That does not mean that we are pulling prices. We are a responsible company and the subsidiary of a group that we can not afford not to be profitable. "

Another of the tricks with which Digi plays is that, although it uses the Movistar network in both fiber and mobile, the installation service and customer service are their own and covered by 400 workers, almost all of them Spanish . "Our culture is to avoid subcontracting as much as possible. We install the fiber at home and we make sure that there is no problem. "

Varzaru does not fear the competitive pressure of the second brands of large operators such as O2 (Telefonica), Lowy (Vodafone), Pepephone (MásMóvil) or Simyo (Orange): We are not noticing the impact. But I do not think we're targeting the same type of client. His are focused on the sale on-line. Ours is between 35 and 50 years old, of middle class and is not super-advanced in technology, and prefers to contract in a store and explain the conditions well ".

By 2019, prospects remain bright. "We will continue to grow but it is difficult to continue doing so at a rate of 50% as in the last two years. We are going to extend our fiber offer, where we already have 8,000 customers, to other towns outside Madrid, such as Guadalajara, Castellón, Almería and Zaragoza. "

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