Veon to plough US$600 million into reconnecting Ukraine

Veon has outlined a plan to spend US$600 million over three years on its Ukraine operation, the bulk of the sum going towards 4G mobile and fibre infrastructure.

The telco group, which operates in Ukraine via its Kyivstar subsidiary, made the announcement at the Ukraine Recovery Conference in London in this week, at the same time urging other institutions to follow suit.

“Today’s sizeable investment commitment signifies not only a continuation of our track record, but also an acceleration of our investments,” said Oleksandr Komarov, CEO of Kyivstar, at the event, according to a statement from the company.

“At a time when many others are refraining from making future plans, we proudly commit to ‘building back better’ in partnership with public sector counterparts and other national and international stakeholders,” Komarov said. “We would like to invite other companies to invest with the same enthusiasm to contribute today to the future Ukraine.”

It’s a laudable sentiment, although investors’ reticence to plough money into Ukraine at this time, particularly in the area of infrastructure, is also understandable.

Nonetheless, Kyivstar is undeterred, and as well as spending heavily on infrastructure, it is also looking at funding growth in digital services and making ongoing charitable donations.

But infrastructure appears to be the main thrust of the announcement. It will invest in network expansion, focusing initially on its ‘LTE everywhere’ campaign and the spread of fibre with a few to providing high quality Internet coverage. Specifically, it aims to cover 98% of the country’s population with 4G in three years, including small and remote settlements, it said.

5G is also part of the equation, but seems to be on the back burner for now. Kyivstar said its efforts in rolling out 4G and fibre will “eventually” lead to a 5G-focused reconstruction. That makes sense, given the current conflict situation.

Kyivstar already offers digital solutions and services, it notes, focusing particularly on health, education and the spread of information. It announced the acquisition of a controlling stake in digital healthcare provider Helsi last summer, without disclosing the size of holding or value of the deal.

The new $600 million investment pledge will support further development of Kyivstar’s existing digital services, it said, as well as facilitating moves into new digital verticals.

There’s no doubting that Kyivstar has had a tough time of late. Its technical teams have performed close to 150,000 repairs since the Russian invasion which began in February 2022, working with twice the intensity of the pre-conflict period, the telco explained. It has reconnected 800 settlements, upgraded and deployed nearly 10,000 4G base stations, and installed 32,000 new batteries to ensure continuity of communication during energy blackouts, it said. As a result, 93% of its network is operational, it noted, which is no mean feat.

It has – understandably – lost customers. This latest announcement talks of a mobile base of 24.3 million mobile customers and 1.1 million fixed-line users, but those figures stood at 24.8 million and 1.2 million-plus respectively as of June 2022. It is also serving 2.5 million Ukrainians with roam-like-home offers.

The conflict in Ukraine and related rebuild was always going to prove costly to the likes of Kyivstar, and it is to the operator’s credit that it is accelerating investments in the market at a time when the situation remains precarious.

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