What's Happening?
Telecoms group Veon has increased its profit outlook for 2025, driven by a surge in demand for digital services across its markets. The company now anticipates its adjusted earnings before interest, taxes,
depreciation, and amortization (EBITDA) to grow by 16% to 18%, up from a previous forecast of 14% to 16%. This adjustment follows a strong third-quarter performance, where Veon reported an adjusted EBITDA of $524 million, marking a 20% increase year-on-year. Revenue for the quarter rose by 7.5% to $1.12 billion. Notably, revenue from direct digital services jumped 63% year-on-year to $198 million, now constituting 18% of Veon's total revenue, up from 12% in the same period last year. Veon is leveraging its extensive mobile subscriber base in countries such as Pakistan, Ukraine, Kazakhstan, Bangladesh, and Uzbekistan by bundling connectivity with services like mobile payments, ride-hailing, entertainment platforms, and delivery solutions.
Why It's Important?
Veon's strategic shift towards digital services highlights the growing importance of 'super apps' in emerging markets, where consumers increasingly demand integrated digital solutions. This move is particularly significant in regions with large unbanked populations, such as Pakistan, Bangladesh, and Uzbekistan, where financial services are a priority. By expanding its offerings beyond traditional telecommunications, Veon aims to capture more value from its subscribers, potentially increasing profit margins. The company's partnership with SpaceX's Starlink to provide satellite connectivity in remote areas further underscores its commitment to enhancing service coverage, especially in regions affected by geographical challenges and conflict, such as Ukraine.
What's Next?
Veon plans to launch its satellite connectivity service in Ukraine and Kazakhstan in the coming months, addressing coverage gaps and enhancing its digital service offerings. The company's focus on expanding its 'super apps' could lead to increased market penetration and subscriber engagement, potentially driving further revenue growth. As Veon continues to integrate various services into single platforms, it may set a precedent for other telecom companies in similar markets to follow suit, potentially reshaping the digital service landscape in these regions.
Beyond the Headlines
The expansion of 'super apps' by Veon could have broader implications for digital inclusion and economic development in emerging markets. By providing integrated services, these apps can facilitate access to financial services, entertainment, and essential utilities, contributing to improved quality of life and economic opportunities for underserved populations. Additionally, Veon's partnership with Starlink may pave the way for increased collaboration between telecom companies and satellite providers, potentially revolutionizing connectivity solutions in remote and conflict-affected areas.
