Veon lower roaming
KEY POINTS
• The COVID-19 pandemic is increasing dependency on and demand for essential communications, connectivity and digital services across several markets
• VEON Group’s financial position to date remains strong and is supported by ample liquidity and a solid balance sheet
• VEON network and services across all markets is operating normally and business continuity plans are in place
• VEON is supporting customers and communities with a variety of health information resources and assistance
measures
• VEON completed the transfer of Mobilink Bank from GTH to VEON Microfinance Holdings
RUSSIA veon roaming
Veon’s Beeline Russia team remains focused on improving the customer experience and stabilising our operating performance as Veon work towards executing the business turnaround anticipated towards the latter part of 2020.
Although still negative on a year-on-year basis, service revenue for 1Q20 is expected to show similar underlying YoY growth trends compared to those reported in 4Q19. While Veon has seen a bigger than anticipated decline in roaming revenues, this can be attributed to travel restrictions necessitated by the COVID-19 pandemic.
EBITDA margins are expected to come under some pressure in the short term, particularly with the acceleration of our network rollout and increased usage by our customers in recent weeks. The recent weakness in the ruble is not expected to have a significant impact on EBITDA margins given that most of our operating costs are denominated in local currency.
UKRAINE
Our business in Ukraine continues to benefit from the strong momentum evident during 2019, with particularly strong performance in data revenues. 4G subscriber base penetration has increased to 28%, with total 4G customers now around 6.8 million, representing a significant YoY increase of 90% following 4G adoption in Ukraine. We would however expect the rate of growth in 4G penetration to slow in the coming quarters with the closure of a number of smartphone stores.
There has been a noticeable increase in social media use on devices following the introduction of quarantine measure across the country.
PAKISTAN veon roaming
Pakistan continues to see good underlying operating trends with particularly strong growth in data revenues supported by an almost doubling YoY in the number of 4G subscribers. 4G penetration continues to grow but remains low highlighting the opportunity for meaningful growth in data revenue over the medium term. 1Q20 reported revenues and EBITDA will be negatively affected by the impact of Suo-Moto1, which are expected to start normalising from 1 May 2020 onwards.
Veon has already added close to 0.7 million monthly active users to our wallet proposition on JazzCash and expects to see approximately 50% YoY increase in mobile wallets. This comes hand-in-hand with stronger engagement of our wallet users through the launch of key remittance services for freelance workers, linking of bank cards as a funding mechanism and the overall enrichment of our growing USSD and App propositions with much more to come. With quarantine measures in place, which will likely adversely impact overall wallet growth, Veon has already seen a strong increase of top-ups and bundle purchases through JazzCash.