VEON has reported revenue of $2.320 billion (–1.4 percent) in Q4 and $9.474 billion (+6.6 percent) in 2017 – indicating the need for enhancing network investment to spruce up revenue growth in several markets in Europe and Asia.
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VEON’s Capex excluding licenses fell 38.3 percent to $466 million in Q4 2017 primarily due to improved Capex planning with Capex more evenly spread over the quarters, compared to end of year loaded Capex in 2016.
Capex of VEON in 2017 dipped 8.3 percent to $1.45 billion. VEON said the ratio of Capex excluding licenses to revenue was 15.4 percent in 2017, reflecting improved Capex efficiencies in 2017.
VEON’s telecom business in Algeria, Bangladesh and Uzbekistan is under extreme stress with revenue dipping in single-to-double digits. Decline in business growth in Uzbekistan was due to currency issues.
VEON’s fourth quarter revenue performance in single-digit growth in Russia, its home market, Pakistan and Ukraine was also not satisfactory.
Russia $1,206 million (+8.4 percent)
Pakistan $379 million (+2.6 percent)
Algeria $214 million (–13.1 percent)
Bangladesh $131 million (–13.6 percent)
Ukraine $159 million (+6.3 percent)
Uzbekistan 78 (–52.9 percent)
The main challenge for VEON is to stabilize its EBITDA.
VEON has posted Q4 EBITDA of $753 million (–3.8 percent). VEON needs to stabilize EBITDA in Algeria, Bangladesh and Uzbekistan.
Russia $430 million (+2.6 percent)
Pakistan $173 million (+34.5 percent)
Algeria $92 million (–26.8 percent)
Bangladesh $47 million (–14.5 percent)
Ukraine $92 million (+33.2 percent)
Uzbekistan $33 million (–68.4 percent)
VEON said reported EBITDA for 2017 increased 11 percent to $3,587 million, while underlying EBITDA fell 0.4 percent organically to $3,675 million. The 2017 underlying EBITDA margin was 38.8 percent, a decrease of 0.9 percentage points, due to margin pressure in Russia, Algeria and Bangladesh.
VEON investment
Italy joint venture
Capex of EUR 515 million in Q4 was focused on expanding capacity and coverage of the LTE network, as well as modernizing and merging the WIND and Tre networks. Investment in network modernization in Trieste and Agrigento has improved network performance.
Uzbekistan
Capex totalled UZS 120.1 billion and the Capex excluding licenses to revenue ratio was 13 percent in 2017. The company invested in data networks, improving the LTE coverage in Tashkent and increasing the number of 3G sites by 60 percent. Focus will be on data networks in 2018.
Ukraine
Q4 2017 Capex was UAH 534 million with LTM Capex to revenue ratio of 15.8 percent as Kyivstar continued to roll out its 3G network, reaching a population coverage of 74 percent up from 61 percent in the same quarter last year.
Bangladesh
In Q4 2017, Capex fell 26.6 percent to BDT 3.7 billion, with a LTM Capex to revenue ratio of 17.7 percent. Banglalink invested in efficient data networks to improve 3G network coverage. The 3G network covered approximately 70 percent of the population at the end of Q4 2017.
Algeria
At the end of Q4 2017, the company’s 4G services covered 28 wilayas and more than 24.6 percent of the country’s population, while the 3G network covers all 48 wilayas. In Q4 2017 Capex was DZD 4.0 billion (–35.7 percent), with LTM Capex to revenue ratio of 14.4 percent.
Pakistan
Capex fell to PKR 6.6 billion in Q4 2017 while the LTM capex to revenue ratio was 15.7 percent in Q4 2017. It offered 3G in more than 350 cities while 4G reached in over 50 cities (defined as cities with at least three base stations).
Russia
Capex dipped 37.8 percent in the quarter as a result of improved Capex planning with Capex more evenly spread over the quarters. The LTM Capex to revenue ratio for FY 2017 was 14.1 percent.
Baburajan K
