Romania's RCS&RDS refinances amid FTTP boom

The Romanian telecoms operator RCS&RDS has raised EUR850 million from international investors in a successful bond issue.
Romanian Cable Systems and Romanian Data Systems were founded by Zoltan Teszari in 1994 and 1998 and are owned by Digi Communications, which indirectly operates telecommunications groups in Hungary, Spain and Italy. Group revenues stood at EUR875 million for the first nine months of 2019 (up 15.6% over the same period in 2018), with around two-thirds generated in Romania where the company is the biggest provider of fixed broadband internet and cable TV.
The bonds issue raised EUR50 million more than expected and is the largest bond financing ever raised by a Romanian company. The company will use the money raised to redeem a EUR550 million bond issue due in 2023 and will repay several other outstanding loans. Citibank and ING Bank managed the bond issue, with the bonds listed on the Irish Stock Exchange.
According to Romanian regulator ANCOM, the telecoms market in Romania was worth EUR3.5 billion in 2018 (the latest figures available), which represented approximately 1.7% of the country’s GDP. Competition in the market is strong, and broadband penetration is relatively low by European standards, with a significant discrepancy between cities and rural areas. However, the quality of broadband is high due to rapid FTTP build out. In 2019, Romania had a FTTH/FTTP penetration rate of over 38% compared to 1.5% in the UK, putting it in 6th position in Europe after Latvia (50%), Lithuania (47%), Spain (44%), Sweden (44%) and Belarus (40%). Romania’s take-up rate of FTTH/FTTP was, impressively, over 50%.