Veon offloads Kazakhstan stake for $138 million

The buyer is DAR Group, Veon's joint venture partner in the company. Under the deal, DAR will pay the princely sum of $137.5 million for Veon's 49% stake.

That will give DAR full control over a telco that boasts a 14,000 km nationwide fibre network. DNS+ offers the usual range of comms, long-distance and data services – including IP VPN and IPLS – to retail operators and enterprises.

"This agreement marks further progress on the execution of our asset-light strategy," said Veon CEO Kaan Terzioglu.

Veon has been pursuing this strategy since 2021, cutting deals in order to monetise infrastructure, reduce costs and complexity, and strengthen its focus on core businesses.

Earlier this month, Veon's Bangladesh arm Banglalink partnered with rival Robi Axiata to explore a potential 4G network-sharing deal aimed at expanding coverage and improving performance. Late last year, Banglalink also agreed to sell some of its towers to Summit Communications for $100 million.

Elsewhere, in March, Veon agreed to sell its 50.1% indirect stake in Beeline Kyrgyzstan to Dubai-based CG Corp Global for an undisclosed sum. Veon said it was motivated by its desire to simplify the group's structure and focus on large markets where it can create scale.

Veon is also a smaller outfit since the sale of VimpelCom. In 2022, it agreed to a management buyout that valued its Russian unit at north of $6 billion, as it joined the exodus of Western companies sparked by the Ukraine invasion.

At the time of the transaction, VimpelCom accounted for around 57% of Veon's group revenue and 57% of EBITDA.

Once this DNS+ deal closes, Veon's presence in Kazakhstan will consist of retail unit Beeline, which had 11.2 million mobile customers at the end of March. That makes it the fourth-largest operation in Veon's portfolio, behind Ukraine (23.9 million) and ahead of Uzbekistan (8.2 million).

"Beeline Kazakhstan is Kazakhstan's digital powerhouse, with products ranging from its financial services application Simply, to its entertainment platform BeeTV, and its innovative second [low-cost MVNO] brand Izi," said Terzioglu.

Meanwhile, it's an interesting move for DAR, which is primarily focused on incubating technologies that address enterprise agility, fintech and education. Last year, it launched a university tasked with training a new generation of budding tech workers. These areas overlap with wholesale telecoms, but it's not as if they are perfectly aligned.

However, the founder of DAR is a Kazakh businessman Alidar Utemuratov, and he spent a chunk of his earlier career in telecoms. This included a stint at Kazakhtelecom, and – following brief detour into mining – the establishment of investment firm Green Apple, which invested in telcos, retailers and tech start-ups.

"This deal represents our positive long-term view of the Kazakhstan economy and its robust performance," Utemuratov said.

"During the last 17 years, TNS+ heavily invested in building [an] extensive fibre network of more than 14,000 km throughout Kazakhstan, connecting all major cities and neighbouring countries," he said. "We are continuing to invest in growing telecommunications infrastructure assets, and digital innovations."