Veon profits from data boom, Ericsson settlement - Mobile World Live

Veon profits from data boom, Ericsson settlement

02 MAY 2019

Rapid growth in data usage across several markets and payment of a multi-million dollar settlement from Ericsson helped drive Veon into the black during Q1, though its earnings continued to be affected by foreign exchange issues.

The operator group booked a $350 million settlement with Ericsson during the quarter, relating to the termination of a contract for the vendor’s now defunct Full Stack Revenue Manager. The two signed a revised agreement in February.

Following a period of heavy investment in 4G, revenue from data services jumped 83 per cent year-on-year in the Ukraine, 94 per cent in Pakistan and 36 per cent in Bangladesh.

Veon’s profit for the quarter was $530 million, compared with an $88 million loss in the first quarter of 2018, on reported revenue of $2.1 billion, down 5.6 per cent. Unfavourable foreign exchange movements cost the operator group $291 million.

Stripping out currency movements, and other special factors, Veon said organic revenue was up 7.4 per cent year-on-year. The company’s results also reflect a change in accounting standards.

It added a “cost intensity” reduction programme was also paying off, cutting overheads across its business units. Its corporate costs reduced by 33 per cent year-on-year, it noted.

In a statement, Veon CFO Trond Westlie said: “Currency developments continue to impact our reported numbers and the evolution of our equity free cash flow, but we remain optimistic about the long-term opportunities presented by our emerging markets, many of which remain in an early stage of digital adoption.”



Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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