What's Happening?
VEON, a global operator group, has reported a substantial increase in its digital services revenue for the third quarter, marking a 63% growth to $198 million. This growth is primarily driven by financial services and ride-hailing, with the number of
digital customers surpassing telecom SIM card users for the first time. VEON is also expanding its AI capabilities, with its Ukrainian subsidiary Kyivstar developing a Ukrainian language LLM in collaboration with the government. The company plans further AI expansion into Uzbek, Bengali, and Urdu languages. VEON's strategy includes organic growth of its customer base, with 90 million additional people expected to access 4G networks and purchase smartphones pre-loaded with VEON's apps and payment services.
Why It's Important?
The growth in VEON's digital services revenue highlights a significant shift in the telecom industry, where digital services are becoming increasingly important. This shift could lead to increased competition among telecom operators to expand their digital offerings. VEON's focus on AI and digital services positions it as a leader in the industry, potentially influencing other operators to adopt similar strategies. The expansion into new languages and markets could also enhance VEON's global presence and customer base, providing new revenue streams and opportunities for growth.
What's Next?
VEON's partnership with Starlink to bring direct-to-device services across its geographical portfolio is expected to enhance its service offerings. Kyivstar's nationwide coverage launch, pending necessary approvals, will further strengthen VEON's market position. The company's strategy to be asset-light, with independent ownership of tower infrastructure, could lead to more effective network sharing and reduced operational costs. These developments may prompt other telecom operators to reconsider their infrastructure strategies and explore similar partnerships.
Beyond the Headlines
VEON's focus on digital services and AI development raises ethical and cultural considerations, particularly in the expansion into diverse linguistic markets. The integration of AI in financial services and ride-hailing could lead to privacy and data security concerns, necessitating robust regulatory frameworks. Additionally, VEON's strategy to pre-load smartphones with its apps may influence consumer choice and market dynamics, potentially impacting competition and innovation in the telecom industry.
