Beeline accelerated revenue growth amid exit from the Netherlands VEON | November 20, 2023

Source: Reuters

In the third quarter of 2023, the revenue of the Russian VimpelCom (Beeline brand) increased by 9.6% compared to the same period last year and amounted to 77.5 billion rubles, the company said in a message received by RBC. In previous quarters, the growth rate was lower: for example, in the first quarter the figure decreased by 2.6%, and in the second it increased by 6.9%.

The third quarter was the last quarter that “VimpelCom”was held as part of the international holding VEON. On October 9, Veon completely withdrew from VimpelCom shareholders. “Despite the fact that for our customers and employees the transition was as smooth and imperceptible as possible, for some aspects of our business this changes a lot,” VimpelCom said in a statement. “This will also affect our financial statements: we will begin to disclose a little more indicators and move away from metrics that, in our opinion, are outdated and do not fully reflect the state of the business.” The company plans to completely switch to the new reporting format by the end of the fourth quarter.

From the report for the third quarter it follows that VimpelCom’s revenue from mobile communications increased by 8.9%, to 65.6 billion rubles. At the same time, the number of subscribers decreased by 4% compared to the same period last year, to 44.1 million. But average revenue per subscriber (ARPU indicator) increased by 10.1%, to 440 ₽ As a company representative explained to RBC , this is due to the increase in the number of users of the UP tariff, launched in the summer of 2022 (allows the subscriber to combine services). He also emphasized that the subscriber base was growing compared to the previous quarter.

The company’s revenue from fixed-line communications increased by 13.9%, to RUB 11.9 billion. According to a representative of the operator, growth was ensured by an increase in the share of the converged base (customers using both fixed and mobile services).

Previously, reports for the third quarter were published MTS And “Rostelecom” For the former, revenue from communication services in the third quarter increased by 7.4% to 112.4 billion rubles, and total revenue, including the bank and other businesses, increased by 15.3% to 159.7 billion rubles. Rostelecom’s total revenue increased by 14%, to 173.9 billion rubles. taking into account IT and digital services.

Content-Review project manager Sergei Polovnikov believes that VimpelCom’s revenue growth is primarily due to an increase in the cost of services for subscribers. “Beeline, like other operators, is growing its tariffs quite strongly – by at least 10% in 2023, leaving VEON has nothing to do with it. Moreover, through VEON the company could at least somehow resolve issues with the supply of equipment; now it will have to be content with what it has,” the expert said in a conversation with RBC.

Leading analyst of Mobile Research Group Eldar Murtazin noted that the company’s revenue is growing due to the “cleaning” of its subscriber base and an increase in ARPU. “Beeline’s strategy, focused on growing its subscriber base, is starting to work, and the quality of the base is improving. The growth in service revenue and revenue in general is associated with adjustments in tariffs and an increase in the subscriber base in the third quarter,” says Murtazin. In his opinion, the performance will gradually improve, and the exit from the Dutch VEON will benefit the company.

How Beeline left VEON.

On October 9, a group of Russian top managers of VimpelCom, led by CEO Alexander Torbakhov, closed the deal to buy out the company from the Dutch VEON. As part of the deal, VimpelCom purchased VEON bonds from Russian holders. The cost of the entire VimpelCom was estimated at 370 billion rubles, but the bulk of this amount was to be repaid by writing off VEON’s debt to the Russian company, and the rest by repurchasing bonds of the Dutch company.

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