VEON: VEON The Money

VEON is executing a disciplined portfolio strategy focused on scaling digital operations. The company has strategically right sized its footprint over the recent years and listed part of Kyivstar Group in Ukraine on Nasdaq, thereby creating transparency and value in one of its biggest assets. Additionally, the operational separation of digital assets like JazzCash establishes structural readiness for strategic flexibility, including potential future listings or partnerships. By consolidating efforts in scalable geographies, VEON is streamlining operations, reducing exposure to geopolitical volatility, and increasing capital efficiency. The company is also investing in AI and satellite connectivity through partnerships like Starlink, expanding its digital moat. This focused, capital-light approach enables VEON to drive margin expansion, improve returns on invested capital, and deliver scalable growth in asset-light form.

VEON’s direct digital revenues surged 63% YoY, reflecting the continued scaling of its digital user base, now exceeding 143 million monthly active digital-only, 50 million of which are digital only users that are not also customers of VEON Group connectivity services. In 3Q2025 direct digital revenues now account for nearly 18% of group revenue, signalling a meaningful transition from traditional telecom revenues. With over 143 million digital monthly active users, and platforms in financial services, entertainment, ride-hailing, healthcare and more, VEON is capturing a growing share of the daily digital lives of its users. JazzCash alone services over 20 million users with transaction volumes exceeding $48 billion annually. Meanwhile, entertainment platforms like Tamasha and Kyivstar TV are achieving rapid engagement through bundled offerings. Higher-engagement users who adopt multiple digital services generate higher ARPU than connectivity-only users. As adoption scales and monetization matures, VEON is well-positioned to build a high-margin, multi-vertical platform model across diverse markets.

VEON is exhibiting strong financial discipline while actively addressing what it sees as a disconnect between fundamentals and market valuation. With $1.7 billion in cash and a net leverage ratio of just 1.13x (excluding leases), the company maintains a highly flexible balance sheet. It generated $584 million in equity free cash flow over the last twelve months, a 357% YoY increase YoY. In November 2025, management initiated another share and/or bond buyback ongoing program to return capital and signal confidence in the stock’s undervaluation. At the same time, VEON was recently upgraded to the Nasdaq Global Select Market, enhancing its visibility among institutional investors. These moves underscore a dual commitment: to reward shareholders in the near term while continuing to reinvest selectively in long-term growth areas like AI, digital lending, and infrastructure. If the valuation gap closes, there is meaningful upside potential for equity investors.

• Buyback Execution: Successful execution of the current share and/or bond buyback program signals capital discipline and management’s belief that the shares are significantly undervalued. It may also provide near-term support to the share price and attract increased institutional interest.

• Digital Momentum: Continued acceleration in direct digital revenues from assets like JazzCash and Uklon demonstrates growing user adoption and engagement. This growth validates VEON’s platform strategy and supports revenue diversification beyond core telecom services.

• Starlink Commercialisation: Commercial rollout of Starlink-powered satellite connectivity in Ukraine and Kazakhstan could unlock new revenue streams in remote and underserved regions. It also strengthens VEON’s positioning as a digital enabler in hard-to-reach markets.

• AI-Driven Product Expansion: Deployment of AI features such as those embedded in SIMOSA (self-care assistant) and KazLLM-powered learning tools across digital platforms could significantly boost user engagement and cost efficiency. These innovations are key to scaling personalised services across geographies.

• Financial Ecosystem Growth: JazzCash’s continued growth in digital lending, insurance, and merchant services positions VEON to benefit from the long-term trend of financial inclusion. Expansion of digital banking licenses across its markets could further accelerate monetisation.

• Platform Value Realisation: Potential spin-outs or partnerships of mature assets like JazzCash or Beeline platforms could unlock hidden value, similar to the successful Nasdaq listing of Kyivstar. These moves could crystallise value and catalyse multiple re-rating over time.

Though VEON delivers double-digit growth in local currencies, currency depreciation against the USD often distorts headline numbers, making it harder for international investors to appreciate the underlying momentum. With the majority of its revenue and operating costs denominated in volatile frontier market currencies, sudden devaluations can compress margins, reduce reported earnings, and mask operational gains. This FX exposure also complicates forecasting, increases earnings volatility, and affects the optics of financial performance, particularly for USD-based investors and analysts.

While VEON’s digital platforms are growing rapidly, ensuring monetisation at scale and across diverse geographies is a major operational challenge. The company must adapt products to local languages, regulations, and consumer behaviours, which increases complexity and cost. Fragmented payment ecosystems and inconsistent digital infrastructure can hinder seamless adoption. Furthermore, scaling monetisation tools like advertising, subscriptions, and fintech services without eroding user experience or trust requires careful balancing. Inconsistent platform maturity across markets adds further execution risk.

VEON operates in several emerging markets including Ukraine and Pakistan, each facing geopolitical and macroeconomic uncertainty. These regions are prone to political instability, armed conflict, sudden regulatory changes, and shifts in government policy that can materially affect operations. Additionally, capital controls, sanctions, and unpredictable legal environments can impair the company’s ability to repatriate earnings or execute strategic decisions. Volatility in these regions may also impact consumer demand and service continuity, leading to revenue variability.