What's Happening?
Telecoms group Veon has increased its profit outlook for 2025, driven by a surge in demand for its digital services. The company now anticipates its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow by 16% to 18%,
an upward revision from its 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 grew by 7.5% to $1.12 billion, with direct digital services revenue rising 63% year-on-year to $198 million, now constituting 18% of Veon's total revenue.
Why It's Important?
Veon's revised profit outlook underscores the growing importance of digital services in the telecom industry. By leveraging its mobile subscriber base across several countries, including Pakistan, Ukraine, Kazakhstan, Bangladesh, and Uzbekistan, Veon is bundling connectivity with services like mobile payments, ride-hailing, and entertainment platforms. This strategy not only enhances customer engagement but also boosts profit margins, reflecting a broader industry trend where telecom companies are diversifying their offerings to include digital services. The increased revenue from digital services highlights the potential for telecom companies to expand beyond traditional connectivity services.
What's Next?
Veon's focus on digital services suggests continued investment in expanding these offerings, potentially leading to further growth in revenue and profitability. As the demand for digital services continues to rise, Veon may explore additional markets or enhance existing services to capture more of the digital economy. Stakeholders, including investors and market analysts, will likely monitor Veon's performance closely to assess the sustainability of its growth strategy and its impact on the telecom sector.
Beyond the Headlines
The shift towards digital services by telecom companies like Veon may have broader implications for the industry, including increased competition and innovation. As companies seek to differentiate themselves, there could be a push towards developing new technologies and services that cater to evolving consumer needs. This trend may also influence regulatory policies as governments adapt to the changing landscape of digital communications.
