Veon lost mobile customers and revenue during third quarter

Veon reported revenue of $2.223 billion (–4 percent) and EBITDA of $987 million (+16.5 percent) during the quarter ended 30 September 2019.
VEON CEO Ursula BurnsVeon has generated revenue of $1,157 million (–1.3 percent) from Russia, $286 million (–27.5 percent) from Pakistan, $197 million (–4.7 percent) from Algeria, $135 million (+3.1 percent) from Bangladesh, $231 million (+28.1 percent) from Ukraine and $66 million (–20.5 percent) from Uzbekistan.

Capex excluding licenses rose marginally to $324 million in Q3 2019 from $311 million in Q3 2018, mainly due to Yarovaya investments in Russia and additional network investments in Kazakhstan following the termination of a network sharing deal with Kcell.

Veon CEO Ursula Burns said: “Our service revenue growth was largely driven by the strong growth in core access data on the back of the investment in data networks. This will remain a key focus for Veon over the medium-term while we explore new services to drive both new incremental revenues as well as support our core connectivity business.”

Veon’s Russian operation faced challenges due to its network quality gap versus rivals, market pricing structure, favouring unlimited tariff plans and the effectiveness of its distribution.

Beeline mobile customers dropped by 2.5 percent to 54.8 million in Russia due to a decline in sales through alternative distribution channels following the expansion of Beeline monobrand stores.

Capex excluding licenses of Beeline dipped by 10.9 percent due to phasing versus higher capital expenditures in the first half of the year. Beeline increased 4G base stations by 43 percent. Beeline invested in network development with strong separate focus on Moscow and St. Petersburg.

Kyivstar’s mobile customer base decreased by 0.8 percent to 26.4 million in Ukraine, due to the reduction in multi SIM users on the market. Data penetration of Kyivstar increased and data customers grew by 12.1 percent.

Capex excluding licenses of Kyivstar increased by 61.8 percent as a result of a strategic focus on 4G/LTE roll-out to UAH 1.4 billion.

Jazz said its customer base increased 5.6 percent, supported by higher data customers on the back of the expansion of the data network in Pakistan. The growth in the customer base was negatively impacted by the regulatory requirement of handset blocking system of unregistered handsets.

Capex excluding licenses of Jazz increased to PKR 5 billion, due to the adverse impact of FX. The population coverage of Jazz’s data network was more than 56 percent during the third quarter.

Beeline Uzbekistan’s customer base declined 7.9 percent to 8.4 million due to its strategic focus on high value customers. Capex excluding licenses of Beeline decreased to UZS 23 billion, mainly as a result of better phasing of Capex, with a larger part of the network investment during H1 2019. Beeline Uzbekistan invested in high-speed data networks, improving 4G / LTE coverage to 26 percent and increasing the number of nationwide 3G sites.

Djezzy’s service revenue was DZD 23.6 billion in Algeria, reflecting a decline of 3.3 percent, while showing a sequential improvement of 5.8 percent. Data revenue increased by 27.8 percent YoY, due to higher usage and an increase in data penetration mostly on 4G/LTE.

Djezzy’s 4G/LTE services covered 28 wilayas and close to 35 percent of Algeria’s population. Its 3G network covered all 48 wilayas and approximately 74 percent of Algeria’s population. Capex excluding licenses of Djezzy was DZD 2.5 billion, representing 34.6 percent increase.

Banglalink customer base in Bangladesh grew 2.4 percent. Data customers increased by 9.7 percent as a result of simplified and product offers and improved network availability. Revenue of Banglalink grew 3.8 percent, driven by an acceleration of mobile service revenue, which increased 5.2 percent to BDT 11.2 billion.

Banglalink’s ARPU increased 2.4 percent driven by higher voice and data revenue, following the introduction of the new bundle portfolio with revised prices. Data revenue increased by 26.4 percent driven by increased smartphone penetration and data usage grew by 83 percent to 1,344 MB per user.

Capex excluding licenses of Banglalink increased to BDT 2.1 billion. 3G network population coverage was approximately 72 percent at the end of the period. Banglalink said the roll-out of 4G/LTE is in progress, following the introduction of this service in February 2018.

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