VEON and Kyivstar increase Ukraine investment commitment to USD 1 billion, attend Ukraine Recovery Conference in Berlin
VEON, a global digital operator, through its subsidiary Kyivstar, has announced an increase in its investment commitment to rebuild Ukraine's digital infrastructure to USD 1 billion over five years (2023-2027), up from the previously announced USD 600 million for three years. This investment will fund network and digital services, potential acquisitions, social contributions, and partnerships. VEON's leaders, including Chairman Augie Fabela and board member Michael R. Pompeo, will attend the Ukraine Recovery Conference to discuss this commitment. Kyivstar has already invested significantly in Ukraine, including building and upgrading LTE base stations, expanding 4G coverage, and investing in the country's energy resilience and digital healthcare. Kyivstar aims for near-universal 4G coverage and continues to support local businesses with digital services.
- VEON increased investment commitment in Ukraine to USD 1 billion over five years.
- Kyivstar added 4,100 residential areas to 4G coverage, achieving 95% coverage in Ukraine.
- Kyivstar plans near-universal 4G coverage (98%) over the next two years.
- Over 1,895 new LTE base stations built and 13,200 upgraded to 4G since February 2022.
- Significant investment in energy resilience: UAH 1 billion spent on 2,300 generators and 113,000 batteries.
- Expansion of GPON network to seven new cities in 2024 for home and business users.
- Investment in Helsi digital healthcare platform, with 2.5 million monthly active users.
- Kyivstar's customer support and CSR initiatives contributed USD 50 million since February 2022.
- Increased investment commitment from USD 600 million to USD 1 billion may strain financial resources.
- Potential risks associated with deploying new technologies like Open RAN in uncertain environments.
- Heavy reliance on continuous investment to achieve near-universal 4G coverage may encounter operational and financial challenges.
Insights
VEON's increased investment commitment from
For retail investors, this significant capital allocation might raise questions about VEON’s liquidity and capital expenditure management. Investors should monitor VEON's debt levels and overall financial health, ensuring this commitment does not strain its balance sheet. While this move illustrates VEON's dedication to corporate social responsibility, it also underscores the strategic importance of Ukraine as a key market for growth.
Potential benefits include increased customer base, enhanced brand loyalty and market leadership in Ukraine’s telecom sector. However, drawbacks might involve the risk associated with geopolitical instability and uncertainty in post-war recovery. This move places VEON in a position to potentially reap outsized rewards, but it is not without its risks.
The investment in Open Radio Access Network (Open RAN) technology is a significant highlight. Open RAN represents a paradigm shift in telecom architecture, allowing for more flexibility, interoperability and cost-efficient deployments. For investors, this indicates that VEON is aiming to future-proof its infrastructure, providing a scalable and robust network that can support future 5G roll-outs and beyond.
Open RAN could lead to reduced operational costs and enhance network performance, making VEON and Kyivstar more competitive. However, transitioning to this new technology may involve short-term implementation challenges and technical risks. Investors should note the potential for initial capital expenditures and integration issues, balanced against the long-term benefits of a more agile and cost-efficient network architecture.
VEON's commitment to digital healthcare through Helsi and other digital services like myKyivstar and Kyivstar TV highlights a strategic diversification into value-added services. This is a clear effort to create a comprehensive digital ecosystem beyond traditional telecom services. The high engagement numbers such as 2.5 million monthly active users on Helsi and 1.5 million on myKyivstar signify strong market adoption and customer retention capabilities.
For investors, this diversification could translate to multiple revenue streams and reduced dependency on conventional telecom service revenues. These digital initiatives potentially open up new business opportunities and partnerships, particularly in the burgeoning digital healthcare sector. However, it’s vital to assess the competitive landscape and the execution capabilities of VEON in these new domains.
Berlin and Kyiv, 10 June 2024: VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a global digital operator that provides converged connectivity and online services, announces that VEON, through its
The Chairman of VEON board of directors and VEON founder Augie Fabela, VEON and Kyivstar board member and former U.S. Secretary of State Michael R. Pompeo, and Kyivstar CEO Oleksandr Komarov will attend the Ukraine Recovery Conference 2024 in Berlin later this week, to highlight VEON’s and Kyivstar’s current contributions to Ukraine’s resilience as well as VEON’s future commitment to the rebuilding and restoration of Ukraine, including the aforementioned upgraded investment plan.
“VEON and Kyivstar support Ukraine’s resilience, recovery and reconstruction in every possible way, from meeting the vital connectivity needs of the country to serving the population with digital capabilities, from futureproofing our network with OpenRAN partnerships to ensuring energy resilience and continuity, from supporting Ukrainian businesses today to investing in the country’s digital ecosystem for the future. Having seen the support of VEON’s international investors, I am proud to note that Kyivstar is a significant example of how a socially responsible business with international investors can support a country through war.” said Oleksandr Komarov, CEO of Kyivstar. “With the power we take from our own example, we will join the call at the Ukraine Recovery Conference 2024 for businesses to invest in Ukraine and invest now! I’m happy that we will do so with an increased investment commitment of our own: USD 1 billion over 5 years.”
VEON’s Kyivstar was named Ukraine’s largest foreign investor in 2022 and 2023 by Forbes Ukraine, with a capex investment of UAH 12.3 billion over those two years – approximately USD 176 million and USD 174 million in 2022 and 2023, respectively.
Highlights of Kyivstar’s investments into Ukraine’s digital infrastructure include the following:
- Since February 24, 2022, Kyivstar has built 1,895 new LTE base stations and upgraded about 13,200 existing base stations to 4G. Kyivstar has added more than 4,100 residential areas to 4G coverage, and
95% of the population of territories controlled by Ukraine have access to 4G services on Kyivstar's network. The operator aims for near universal (98% ) population coverage in 4G over the next two years. - Home and business fixed line users are benefitting from Kyivstar’s roll-out of its high-speed GPON network, which is due to be expanded to seven new cities in 2024.
- In February 2024, Kyivstar and Rakuten Symphony signed a letter of intent confirming Kyivstar’s interest in procuring and deploying Rakuten Symphony's Open Radio Access Network (Open RAN) technology in its network, which will involve both 4G and 5G technology.
- Kyivstar invested UAH 1 billion (approximately 27.4 million) in Ukraine’s energy resilience, installing over 2,300 generators and 113,000 batteries to help keep its network running and customers connected, even when Ukraine’s power infrastructure is under attack.
- Kyivstar invested in Helsi, the Ukraine’s leading digital healthcare platform, in August 2022. As of March 2024, Helsi has 2.5 million monthly active users on web and OTT platforms, serves nearly 1,600 medical institutions and more than 38,000 medical professionals, and has facilitated 2.5 million digital appointments in the first quarter of 2024.
- Kyivstar continuously expands the use and capabilities of its self-care platform “myKyivstar” and TV application Kyivstar TV, with nearly 1.5 million monthly active users, and locally relevant content including educational resources.
- Kyivstar supports Ukrainian businesses with integration of Amazon Web Services for data processing as well as with Microsoft Azure cloud services. Kyivstar’s Real-Time Kinematic technology is used in a wide range of professional applications, from agriculture to demining operations.
- Kyivstar’s total customer support and CSR initiatives since February 2022 amounted to USD 50 million, including corporate donations and digital facilitation of customer donations to the Ukraine’s demining, raising more than UAH 180 million (USD 4.8 million) from 2023 to 2024 for the “We Live Here” demining project of the Come Back Alive Foundation.
About Kyivstar
Kyivstar is the largest telecommunications operator in Ukraine with 24 million mobile subscribers and over 1.1 million home internet subscribers. As Ukraine’s market-leading operator, Kyivstar maintained network availability above the
About VEON
VEON is a digital operator that provides converged connectivity and digital services to nearly 160 million customers. Operating across six countries that are home to more than
Disclaimer
This release contains “forward-looking statements,” as the phrase is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical facts, and include statements relating to, among other things, VEON’s strategy and investment plans. Forward-looking statements are inherently subject to risks and uncertainties, many of which VEON cannot predict with accuracy and some of which VEON might not anticipate. The forward-looking statements contained in this release speak only as of the date of this release. VEON does not undertake to publicly update, except as required by U.S. federal securities laws, any forward-looking statement to reflect events or circumstances after such dates or to reflect the occurrence of unanticipated events. Furthermore, elements of this release contain or may contain, “inside information” as defined under the Market Abuse Regulation (EU) No. 596/2014.
Contact
VEON
Hande Asik
Group Director of Communications
pr@veon.com
FAQ
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