Veon to plough $1 billion into Ukraine

The telecoms operator group will plough the cash into the country via its Kyivstar subsidiary. It will spend it on the build-out of networks and digital services, a broad category that could also include potential acquisitions or the development of new assets, social contributions and partnerships, it said.

Veon is pitching the $1 billion commitment as a funding increase, which to an extent it is, but could perhaps be more accurately described as maintaining planned investment levels over a longer period. At the start of this year Veon embarked upon a plan to invest $600 million over three years, which averages out at $200 million per year. It is now pledging to maintain that average annual spend over an extra two years.

That's splitting hairs though. This is a significant financial injection into a market that badly needs it, and represents a spending hike on previous years. Kyivstar capital spending and investment came in at the equivalent of $176 million and $174 million in 2022 and 2023 respectively, Veon reported last month. The money mainly went on 4G coverage expansion, ensuring network availability and energy resilience, and the aforementioned digital services.

The telco group provided more detail of its recent spending in this latest announcement.

Since 24 February 2022, the date Russia invaded Ukraine, Kyivstar has built 1,895 new LTE base stations and upgraded around 13,200 existing sites to 4G. Its 4G network now covers 95% of the population of the territories controlled by Ukraine and aims to reach 98% in the next two years. Kyivstar is also looking at Open RAN, and earlier this year confirmed it is interested in procuring equipment from Rakuten Symphony, but there has been no update on that since.

On the fixed side, Kyivstar is rolling out GPON technology and said it will add seven new cities to its footprint this year.

Kyivstar has invested around 1 billion hryvnia, or $27.4 million in energy resilience, installing more than 2,300 generators and 113,000 batteries to keep its network running at times when the country's power infrastructure is under attack. The firm also talked up its investment – of undisclosed sum – in Ukrainian digital healthcare platform Helsi; its self-care platform myKyivstar; and the fact that it offers AWS and Microsoft Azure cloud services for businesses.

Essentially, Kyivstar is addressing the same market needs as its peers elsewhere in the world, but with the added – and considerable – challenge of doing it in a war zone.

Which is essentially what the company's chief executive had to say.

"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," said Kyivstar CEO Oleksandr Komarov.

"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," he added.

Kyivstar is Veon's second largest market operator, the Ukrainian business accounting for a quarter of group revenues last year at $919 million. It is a big operation that needs the backing of some serious investment, particularly given the current situation.