Veon raises outlook as it unveils diversification strategy

Telecoms group Veon has increased its EBITDA guidance for FY 2019 and is looking beyond connectivity for future growth.

Veon serves over 200 million subscribers, mainly in central Asia, and things seems ticking along nicely. “Veon is performing well in the current financial year against our 2019 targets and today we are increasing our EBITDA guidance for FY 2019 from low to mid-single digit growth to at least mid-single-digit growth,” said Ursula Burns, Group Chairman and CEO. “Previous guidance of Revenue growth and Equity Free Cash Flow remain unchanged.”

Despite that, Burns reckons Veon needs to diversify beyond mere connectivity in the pursuit of future growth. A new strategy framework is built around three pillars: connectivity, new digital services and future assets that open up adjacent growth opportunities. This essentially seems to be a version of the kind of 5G strategy most telecoms groups are advocating.

“Our new strategy framework underscores the growth opportunities we see beyond our connectivity business and aligns Veon’s ambitions with our industry’s future development,” said Burns. “I am confident that the greater flexibility in how we allocate capital will allow us to execute on these opportunities, reinforcing our market-leading positions and maximizing shareholder returns over the longer term.”

“Over the next 18 months, there are opportunities that we believe will best serve investor interests over the medium-term,” said Alex Kazbegi, Group Chief Strategy Officer. “We are excited about the opportunity in our core Russian market, which we believe can be best accessed through a short-term increase in network capex to allow us to drive medium-term service revenue growth.

“In Pakistan, there may be the opportunity to increase our stake in the business through the existing put option with Warid. We also believe stepping up our investment in Digital Financial Services in Pakistan is an exciting first step in Future Assets.”