by Jean-Yves Charlier, CEO
Reinventing a global communications pioneer into a global tech company, aiming to lead the personal internet revolution by bringing new experiences to hundreds of millions of customers in the markets of tomorrow
Today marks the beginning of a new and exciting era as VimpelCom becomes VEON.
Before outlining the future, let me talk about the solid corporate turnaround we believe places us in pole position to lead the personal internet revolution in the frontier markets we serve.
In the past few years, the telecom industry’s performance has been lackluster in many markets across the world. Growth has been elusive, even in emerging markets, and the industry has failed to reinvent itself. Our industry is at a crossroads and in desperate need of reinvention. The sector has lacked meaningful engagement with customers, particularly in prepaid markets where customer loyalty has been limited at best. It risks simply becoming dumb pipes for others, as consumers and businesses communicate, share and socialise for free through fast-growing OTT players.
Worse still for us, VimpelCom was caught in the headwinds of the currency devaluations in emerging markets as well as underperforming compared to other industry players, as it grappled with a weak balance sheet, poor financial performance and inefficient operations.
Transforming from within
The telecom sector has been backed into a corner by Silicon Valley upstarts as the industry struggles to reinvent itself and find new paths to growth. With VEON, we have chosen to disrupt ourselves from within, and we have unique advantages that position us for success in our ambition to transform from telco to global tech company.
Today, having rebuilt our financial and operational foundations, we have earned the right to aspire to market leadership once again. We have drastically improved our capital structure and consolidated two of our key markets, with the WindTre Italia joint venture in Italy and the successful merger of Mobilink and Warid in Pakistan. We are now #1 or #2 in most of our markets. With a world-class management team, new corporate culture and values, robust control and compliance framework, a lean, agile operating model, and a significantly reduced cost base — we are returning to sustained organic growth. We are now on course to deliver strong free cash flow growth and to paying a meaningful dividend to our shareholders.
From telco to tech company
Technology is revolutionising the way users communicate, travel, bank, shop, consume, and are entertained, presenting VEON with a unique opportunity, given our reach and penetration in the mobile markets of tomorrow. Other telcos have acquired tech companies, announced mergers with media players, or set up innovation units in the race to reinvent themselves.
VEON’s telco to global tech strategy is not a bolt-on to running a traditional business in the traditional way. It is unique: it’s about offering a new engagement platform to users, re-engineering our legacy systems and data architecture to offer new, personalized and contextual services, and reinventing our bricks-and-mortar business model.
Introducing VEON: a personal internet revolution
Enter VEON, a revolutionary mobile internet platform that integrates powerful data analytics and artificial intelligence to finally put the user in control. With zero-rating as a fundamental component of the service, VEON allows users to stay connected for free, no matter the status of their data plan — even when they are out of credit. VEON’s fresh take on messaging capabilities enables users and communities to connect by voice, text, picture and video through a beautifully designed interface.
VEON tears down the archaic and inefficient bricks-and-mortar service model and replaces it with a smooth, easy, fun and intuitive experience where everything users need is at their fingertips. Gone are the days of queuing up in stores to top-up or waiting for a customer service agent, everything is online with VEON, all at a tap of a finger.
But VEON is much more than just a reinvented telecom experience; it is a highly intuitive partner, an experience that will offer users a variety of new, personalised and contextual services from entertainment to financial services using data to predict consumer needs, while protecting privacy at every stage. We understand that privacy is a right, not a luxury, which is why contextual engagement on VEON is an opt-in service, ensuring that users are always in control over their own data.
Pioneering partnerships with STUDIO+, Deezer, i.am+ and Mastercard
We have the objective to launch VEON across all our markets in the near future, offering a significant opportunity for our current user base of 235 million customers across 12 markets to access the internet in service of their needs and dreams.
We are developing partnerships with some of the world’s most popular, proven consumer and business brands, and also with local brands to transform the personal internet experience for customers in frontier markets: from transport to music; financial services to retail; and video to business innovation.
With VEON, an entrepreneur in our markets with an idea to build and scale a business has the power to succeed. In nations with poor, sometimes non-existent banking infrastructure, VEON’s mobile financial services brings tremendous opportunity, empowering the unbanked with access to finance and services, thus driving economic growth across our frontier footprint.
We are delighted to announce that STUDIO+, Deezer and Mastercard are our first global partners providing relevant video and music content to VEON users all over the world in a first major move to bring great entertainment on the platform. Our partnership with Mastercard will enable our 235m customers to benefit from the secure, convenient, one-click mobile payment option, Masterpass, to buy mobile airtime or make e-commerce purchases. VEON is also partnering with innovator and global music artist will.i.am and his technology company i.am+. VEON will integrate AneedA, a device-agnostic virtual assistant with a conversational interface to the internet, apps, streaming music and other services.
To help satisfy consumer desire for mobile video, VEON and Vivendi have struck a global distribution partnership that will bring feature film quality short form video to VEON’s customer base. Vivendi’s new service, STUDIO+, an innovative new format provides customers with a series of 10 minute episodes which together create a compelling long-form narrative. Designed for bite-sized, snackable consumption, VEON’s customers will be able to have access to beautifully produced cinematic short form video across a range of genres from drama, to action, to romance.
Through a global partnership with Deezer, VEON will link mobile customers across the globe with Deezer’s extensive music library of over 43 million tracks, and over 40,000 pieces of broader audio content. VEON users will have access to tracks, featured artists and custom playlists in a novel way directly from the VEON platform.
We look forward to unveiling a range of new partnerships on a global and local basis going forward as we launch VEON across the world.
Positioned for success in the markets of tomorrow
Few companies in our markets possess such a strong, data rich relationship with hundreds of millions of customers in the mobile markets of tomorrow. VEON, the company, owns some of the most recognized, trusted brands in the markets we serve. Our scale and depth of customer relationships is unprecedented for any company, with the ambition to bring a new experience to consumers in the markets of tomorrow.
A re-birth not a re-brand
VEON, our new name, reflects our radically improved telecom business and our customer experience aspirations. Using the same name for both the company and our new personal internet platform demonstrates our commitment to radical transformation. And while the strong brands of our local operating companies will not change, VEON will build on their high brand awareness. VEON will capitalize on Beeline, WindTre, Djezzy, Jazz, Kyivstar and Banglalink and their status as market leaders.
Our global team can take great pride in its achievements over the past two years. They are the ones who made this corporate turnaround and tech ambition possible. They are the people that will make our ambition a reality in the months and years to come.