VimpelCom claims transformation progress; Uzbek settlement nears - Mobile World Live

VimpelCom claims transformation progress; Uzbek settlement nears

17 FEB 2016

VimpelCom said it has “made significant progress” in moves to streamline its operations and transform its cost base, while also revealing it has reached prospective settlements following investigations into its operations in Uzbekistan.

Jean-Yves Charlier, CEO of the company, said it has delivered on its 2015 targets “despite a difficult background of currency devaluations and economic challenges in most emerging markets across the world”.

Last year was a busy one for VimpelCom. It is planning to merge Wind Italy with 3 Italy to create a 50-50 joint venture, pending approvals; and a deal has also been reached to merge Mobilink in Pakistan with Warid Telecom, again subject to approval.

Global Telecom Holding, a company in which VimpelCom holds 51.9 per cent, also inked a deal to offload some assets in Zimbabwe.

VimpelCom has also been subject to an investigation by the US Department of Justice, US Securities and Exchange Commission, and the Dutch Public Prosecution Service, relating to its activities in Uzbekistan.

It said that this has led to a proposed settlement (subject to approval) which would see it and some subsidiaries “among other things, acknowledge certain violations of the US Foreign Corrupt Practices Act and relevant Dutch laws”.

Fines will be payable which are within provisions already made – a figure of $900 million was given for this in 2015.

The company reported a profit attributable to shareholders of $21 million, compared with a prior year loss of $890 million, on revenue of $2.3 billion, down 23.3 per cent from $3 billion. The numbers also reflect the reclassification of Wind Italy as an asset held for sale.

On an organic basis, revenue would have increased 1 per cent, with positive performances in Pakistan, Bangladesh, Uzbekistan and Kyrgyzstan in part offset by weakness in Algeria and Kazahstan.

Its mobile subscriber base decreased by 0.8 million to 196.3 million, mainly due to the impact of regulatory measures in Pakistan.

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Steve Costello

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