Veon: Rebuilding Growth from the Ground Up

VEON has transformed from a conventional telco into a digital ecosystem. Nearly one-fifth of revenue now comes from its fintech, entertainment and super-app verticals, growing more than 60% year on year. The company is building diversified digital engagement across 140 million monthly users, supported by a scalable AI-driven platform and low customer-acquisition costs. With digital services now outpacing mobile in usage, VEON is shifting from a high-yield value stock to a true growth compounder.

The newly approved $100 mn buyback underscores both balance-sheet strength and management conviction. Auditors have removed the going-concern warning after strong deleveraging, with cash roughly matching the debt. VEON’s free cash flow generation gives it the flexibility to reward shareholders while funding expansion across key markets. The move also highlights a maturing capital-allocation discipline and sets a valuation floor as the market re-rates the group’s earnings profile.

VEON’s ability to execute through war and inflation has been extraordinary. The Kyivstar IPO, valuing VEON’s stake at $2.5 billion (over twice book value), proves the intrinsic worth of its Ukrainian operations, while the Starlink partnership ensures network continuity and potentially lowers future capex. Should conflict pressures ease, VEON could see rapid multiple expansion, but even in today’s environment, its diversified base in Pakistan, Bangladesh and Kazakhstan keeps performance resilient and forward momentum intact.

• Buyback execution drives investor confidence: The newly authorised $100 million buyback in shares and bonds begins immediately following the Q3 2025 results announcement. It’s a tangible signal of management’s confidence, tightening liquidity, rewarding patient holders, and confirming that the balance-sheet reset is complete after the removal of the going-concern warning.

• Guidance upgrades reinforce digital momentum: Management lifted full-year LCY EBITDA growth guidance to 16–18% (from 14–16%), with LCY revenue growth maintained at 13–15%, reflecting broad-based execution and double-digit growth. As models catch up, consensus upgrades could reframe VEON as a structurally growing digital platform rather than a distressed telco.

• Kyivstar IPO crystallises hidden value: The Nasdaq listing of Kyivstar, VEON’s Ukrainian subsidiary, valued the stake at $2.5 billion, more than 2× book. Further liquidity events or partial monetisation could unlock that embedded value, helping investors better appreciate VEON’s diversified regional portfolio.

• Starlink partnership proves resilience and innovation: The group-wide Starlink Direct-to-Cell framework positions VEON as one of the first operators globally to integrate satellite and terrestrial connectivity. Kyivstar will roll out nationwide pending approval, with Kazakhstan to follow in 2026. The tie-up not only ensures network continuity in war-affected areas but also reduces future capex needs.

• AI-powered ecosystem drives compounding growth: VEON’s AI1440 and DO1440 initiatives are embedding local-language large language models across its apps, from Kazakhstan’s Kaz-LLM to Ukraine’s Ukrainian LLM. This sovereign-AI approach deepens user engagement, lowers churn, and strengthens VEON’s position as the go-to digital operator across frontier markets.

• Asset-light model fuels self-funded expansion: Having divested tower assets and optimised capex, VEON now scales without heavy infrastructure drag. Sustained free-cash-flow generation gives it the flexibility to fund new verticals, explore data-centre partnerships, and compound earnings toward its $1 billion annual FCF ambition.

Operations in Ukraine, Pakistan, and Bangladesh carry exposure to political instability, currency controls, and shifting data-sovereignty rules. While VEON localises operations and debt, external shocks remain a constant overhang.

Running a digital-first, asset-light operator in five very different frontier economies is operationally complex. Integration of AI1440, fintech expansion, and satellite rollout all demand precision, missteps could slow margin progress.

Despite its Nasdaq listing, VEON remains under-owned and under-researched. Thin trading volumes and lingering “frontier stigma” can cap valuation multiple expansion even as fundamentals improve.