Exclusive: Veon to separate services and investment unit

Exclusive: Veon to separate services and investment unit

08 June 2021 | Alan Burkitt-Gray

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Shareholders in mobile phone operator Veon are expected to take a decision this week that will be a major step forward in creating an independent home for the group’s services division.

The decision is actually about appointing Sergi Herrero (pictured), co-CEO of the group until the end of the month, to the Veon board. But it is understood that linked to the decision is the fact that his appointment to the board will confirm the importance of the ventures unit, which will also be able to invest in services developed outside Veon and might seek separate investment in the future.

In an exclusive interview with Capacity, Herrero said: “In the next two years we will focus on two or three big markets, with Veon as a holding company.” But later the company might consider a share flotation of some of the units, which have developed applications such as financial services, entertainment and big data, he said.

The company announced in April that he will be stepping down as co-CEO at the end of June. Veon said: “Sergi is expected to continue advising the company, in particular with respect to the Veon Ventures businesses which focus on generating value in high growth areas.”

That role, subject to the decision of the annual general meeting (AGM) on Thursday, will mean Kaan Terzioğlu is the sole CEO, heading the telecoms operations, after a year sharing the role: they were co-COOs from November 2019.

Speaking in advance of the AGM, Herrero told Capacity that the new unit will concentrate on assets that have been developed internally, in operating companies including Bangladesh, Pakistan, Russia and Ukraine, and seek to adapt them for the company’s other markets.

“But we will also get a budget for acquiring companies,” he added.

Meanwhile, Veon announced yesterday that its operating company in Kazakhstan, Beeline, has launched the country’s first digital payment card integrated with its mobile financial services offering.

Marketed under the “Simply” brand, the Beeline Kazakhstan digital payment card is a mobile financial service application linked to a customer’s phone number, an electronic wallet and a premium digital Visa Platinum card. The card is also integrated with digital wallets Apple Pay, Samsung Pay and Garmin Pay.

“Mobile financial services are a key strategy for the future growth of Veon and one that is highly suited to the markets we serve where financial inclusion remains low,” said Terzioğlu.

“We have successfully grown financial services and e-commerce businesses off the back of mobile operations in Pakistan, and we are now announcing a similar initiative by Beeline in Kazakhstan.”

Evgeny Nastradin, CEO of Beeline Kazakhstan, added: “We continue to invest in our 4G high-speed data networks, which currently cover 77% of the population. Promoting digital adoption in the country is a key focus and one in two Beeline customers are using our 4G services and the numbers are growing.”

He said the mobile digital bank would serve a market “where currently 40% of the country's population is unbanked”.

Veon already runs JazzCash in its Pakistan operation, where it has achieved 14 million users. “Only 20% of the 200 million people in Pakistan have bank accounts,” said Herrero, speaking yesterday to Capacity.

And the company runs a video streaming service, called Toffee, in Bangladesh. This is likely to be customised so that it can be offered in Pakistan, said Herrero.

 

  • Capacity plans to run a full interview with Herrero in the June/July issue of the magazine