Multi-national operator Veon’s digital platform initiative, which included an app offering messaging and content services in markets such as Russia and Pakistan, looks set to be shuttered.
Responding to questions, the company said it is looking into discontinuing investment “in light of changing business priorities” and is “consulting with employee representatives on the likely impact of this proposal.”
“Veon remains fully committed to delivering world class digital services to our 210 million customers in 10 countries. Many of our operating companies already offer a range of digital services, including Beeline TV in Russia and Jazz Cash in Pakistan amongst others, and Veon will continue to look at opportunities to improve our customers’ experience,” the statement added.
Described as a global personal internet platform, the app was launched in July 2017 and was designed to compete with OTT services including WhatsApp and Viber. At the time the company said the app “provides contextualised, personalised internet experiences, enabling customers to access information and services, and engage with their world, in an entirely new way.”
In April 2018, Nicholas Wodtke, EVP of digital content at Veon, told Mobile World Live (MWL) the app was still in phase one, where customers can chat for free. Phase two was going to see the company begin to charge for localised content, taking advantage of its existing “paying relationship” with its customers.
Veon’s strategy was based on the belief “content will play a critical role in how data is served”.
“The more the consumer is engaged and the more data that is consumed, the more operators can be healthy and profitable,” Wodtke had explained.
What went wrong?
Kester Mann, director – consumer and connectivity at CCS Insight, said Veon’s move away from traditional telecommunications services as a core focus was an “uncharacteristically bold and far-sighted move among normally risk-averse network operators.”
However, he explained online messaging is a notoriously difficult market to break into, adding that Veon may have underestimated the long-term investment required to ensure its platform gained the scale needed to make profit.
He said operators continue to struggle to decide the extent to which they wish to push the boundaries in pursuit of new growth, or whether they are better suited as enablers for others through offering the best connectivity.
“To really model itself on Silicon Valley, the company may have needed to place large bets in emerging areas such as AI to make its service stand out from the many others,” he stated.Subscribe to our daily newsletter Back