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VEON Q3 revenue climbs 3.6%; up-for-sale Beeline Russia’s local currency turnover drops 6.1%

3 Nov 2022

Amsterdam-headquartered multinational telecoms group VEON reported a 3.6% year-on-year improvement in consolidated revenue to USD2.077 billion in the third quarter of 2022, with local currency turnover climbing 3.4%. Underlying service revenue reached USD1.968 billion in 3Q22, up 7.9% y-o-y (up 7.8% in local currencies). The NASDAQ and Euronext-listed company’s EBITDA flatlined y-o-y in reported currency at USD889 million in the three months to 30 September, while it noted a 0.7% improvement in local currency EBITDA (up 1.9% excluding one-off items). Group Q3 CAPEX reached USD404 million, 6.0% higher than in 3Q21. Consolidated mobile subscriptions grew 0.8% y-o-y to 203.2 million with 4G subscriptions climbing 15% in twelve months to represent over 52% of the total base, steadily approaching VEON’s target of 70% 4G penetration. Fixed broadband subscriptions climbed 1.2% y-o-y to 4.7 million at end-Q3 2022.

The group’s statement highlighted: ‘Growth in subscribers, higher 4G penetration and an expanded portfolio of digital services are driving solid revenue performance across our countries, while inflationary pricing and good cost management have enabled us to withstand tough headwinds, such as rising energy costs, changing tax regimes, natural disasters in Pakistan and the humanitarian crisis in Ukraine.’

VEON’s largest division, Russia, reported a 3Q22 revenue decrease of 6.1% y-o-y in local currency, although growing 16.1% y-o-y in reported currency to USD1.189 billion – representing 57% of the group’s entire consolidated USD revenue. Russian turnover was impacted by a 58.5% decline in equipment revenue due to lower device sales, while the y-o-y strength of the Russian rouble supported the growth in reported financial performance. 3Q22 Russian mobile service revenue was up 2.1% y-o-y in local currency, as the continued growth in the 4G subscription base drove mobile data revenue higher by 7.5% in local currency.

As previously reported by TeleGeography’s CommsUpdate, VEON yesterday confirmed it is actively seeking a buyer for its Russian division, PJSC VimpelCom (Beeline). Sources speaking to Kommersant noted that transferring Beeline to Russian ownership would serve a dual purpose of enabling VEON to avoid possible international sanctions and Beeline to avoid local regulatory complications incurred due to its foreign-based group parent. A Beeline press spokesperson told Kommersant that Russian regulatory restrictions imposed on the company due to its Dutch-based ownership ‘has led to the fact that the company is in a less favourable position compared to other telecom players [in the Russian market].’ TeleGeography’s GlobalComms Database notes that exploratory talks on a potential sale of Beeline Russia were held in 2018 with state-backed fixed line giant Rostelecom but were called off as VEON expected more money than Rostelecom was willing to pay.

Netherlands, Russia, Beeline (Russia), VEON

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