VEON posted revenue of $2.3 billion (–1.4 percent) in Q1 2018, mainly due to currency devaluation in Uzbekistan and Pakistan.
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VEON achieved organic revenue growth in Russia, Pakistan, Ukraine and Uzbekistan. But it faced pressure on revenue in Algeria and Bangladesh.
Mobile data revenue increased 15.9 percent. Mobile customers increased 1.8 percent to 210 million at the end of Q1 2018, primarily driven by growth in Pakistan, Bangladesh and Ukraine.
VEON EBITDA fell 0.8 percent to $854 million in Q1 2018, due to the currency headwinds in Uzbekistan and Pakistan, as well as Euroset integration costs.
Capex
VEON said its Capex (capital expenditure) increased to $774 million in Q1 2018, primarily due to spectrum purchases in Ukraine and Bangladesh. Capex excluding licenses of VEON rose to $355 million from $264 million in Q1 2017, driven by higher Capex in Bangladesh and Ukraine to support 3G and 4G/LTE network expansion. The ratio of Capex excluding licenses to revenue was 16.4 percent.
“We have invested so that we now offer 4G/LTE in every one of our markets and we are on track to deliver on our 2018 outlook,” Trond Westlie, chief financial officer of VEON, said.
Kyivstar and Banglalink acquired spectrum and 4G/LTE licenses. VEON has launched 4G/LTE in all operating countries. VEO earlier announced the appointment of Ursula Burns as executive chairman following departure of former CEO Jean-Yves Charlier.
VEON completed sale of Laos operations and entered into an agreement to sell operations in Tajikistan.
Russia
Beeline’s Capex excluding licenses surged 34.5 percent. The Capex excluding licenses to revenue ratio was 14.8 percent. As per Russian Government’s new regulations, telecom operators need to store voice and SMS communications starting from July 2018 and data communications from October 2018. The expenditures for this new program will be RUB 45 billion over 5 years including approximately RUB 6 billion in 2018.
Pakistan
Capex excluding licenses increased to PKR 7.3 billion in Q1 2018, mainly due to the 4G/LTE network expansion. The Capex excluding licenses to revenue ratio was 17.8 percent. 3G in Pakistan was available in more than 360 cities while 4G was offered in over 70 cities. 3G coverage was 52 percent and 4G coverage was 28 percent.
Algeria
4G services covered 28 wilayas and more than 25.3 percent of the country’s population. 3G network covered all 48 wilayas and more than 75 percent of population. Capex excluding licenses was DZD 1.6 billion, with Capex excluding licenses to revenue ratio of 13.5 percent.
Bangladesh
Capex excluding licenses increased to BDT 4.6 billion. Capex excluding licenses to revenue ratio was 26.6 percent. Banglalink invested data networks aiming to substantially improve its 3G network coverage that reached 70 percent of the population. Its 4G coverage reached 23 districts towns, with a population coverage of approximately 12 percent.
Ukraine
Capex excluding licenses was UAH 687 million with a Capex excluding licenses to revenue ratio of 15.2 percent. Kyivstar’s 3G network reached a population coverage of 74 percent from 65 percent.
Uzbekistan
Unitel’s Capex excluding licenses was UZS 74.4 billion and Capex excluding licenses to revenue ratio was 12.4 percent. The company invested data networks, improving the 4G coverage to 23 percent and increasing the number of 3G sites by 32 percent.
Italy joint venture
VEON said Italy joint venture’s Capex was EUR 224 million — focused on modernizing and merging the former Wind and Tre networks as well as expanding capacity and coverage of 4G. The company modernized 6,500 transmission sites. The company achieved better performance in cities of Trieste, Bologna, Agrigento, Milano and Alessandria following the network modernization.
