VimpelCom Capex up 24% in first quarter, focus on 3G and LTE

VimpelCom today said its first quarter (Q1 2014) Capex (capital spending) for telecom infrastructure rose 24 percent to 736 million euros.

The primary focus of its Capex was on mobile data networks. VimpelCom invested in 4G LTE network in Russia, 3G in Algeria and Bangladesh and 3G/ 4G in Italy.

Its focus on mobile data networks has resulted in significant increase in revenue.

In Russia mobile data traffic more than doubled. Mobile data revenue increased 22 percent to RUB 8.8 billion, while data revenue from small screens increased 25 percent.

In Italy, WIND’s mobile broadband revenue rose 24 percent to EUR 132 million driven by a 40 percent growth in mobile broadband customers to 9.3 million.

In Ukraine, mobile data revenue increased 15 percent to UAH 242 million.

In CIS, mobile service revenue increased organically 2 percent to $394 million driven by strong mobile data revenue growth of 29 percent.

The Q1 2014 revenue of VimpelCom decreased 10 percent to 5,024 million euros, while net income nosedived 90 percent to 39 million euros.

VimpelCom Capex for first quarter

VimpelCom said operational performance in Russia, competition in Italy, regulatory issues in Asia and Africa and unstable macro-economic situations in Pakistan and Ukraine have impacted the revenue and profit growth.

Russia generated first quarter revenues of 1,893 million euros, Italy 1,568 million euros, Africa and Asia 846 million euros, Ukraine 335 million euros and CIS 437 million euros.

The company said VimpelCom subscriber base grew 3 percent to 218 million.

VimpelCom has revised its revenue target for 2014. The mobile operator says it is expecting low to mid single decline in revenue. There is no change in Capex for the full year with VimpelCom planning to spend 21 percent of sales on telecom infrastructure.

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