VEON: VEON The Money

VEON is executing a disciplined portfolio strategy centred on scaling higher-margin digital operations. Having simplified its footprint and refocused on higher-growth markets, the company is now concentrated on scalable, structurally attractive geographies. By prioritising digital services, VEON is streamlining operations, reducing geopolitical exposure, and improving capital efficiency. This shift is driving a mix towards asset-light, higher-margin revenues, enabling the group to generate more profit from its existing customer base without a corresponding increase in costs. With revenues up 9.9% and EBITDA rising 18.8% in FY2025, the model is already demonstrating operating leverage, with profits growing faster than revenues. This margin expansion supports stronger cash generation, higher returns on invested capital, and a more scalable, higher-quality earnings profile, typically leading to stronger free cash flow, greater capital returns, and the potential for a higher valuation over time.

VEON’s direct digital revenues surged 63% YoY in FY2025, reflecting the continued scaling of its digital user base, now c.33 million monthly digital-only users. 50 million of which are digital only users that are not also monthly of VEON Group connectivity services. Digital services now represent around 17% of group revenue and are growing significantly faster than the core telecom business, signalling a meaningful transition from traditional telecom revenues. With over 135 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 $53 billion annually. Meanwhile, entertainment platforms like Tamasha TV 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 leverage reduced to around 1.09x net debt to EBITDA (excluding leases), the company maintains a highly flexible balance sheet. It generated $624 million in equity free cash flow in FY2025, supporting both reinvestment and capital returns. 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, infrastructure, and adjacent financial services such as insurance through JazzCash’s broader ecosystem in Pakistan. If the valuation gap closes, there is meaningful upside for equity investors.

• 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.

• 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. VEON has already repurchased over 2.7 million ADSs and committed to a minimum $100 million annual buyback policy, which may provide near-term support to the share price and attract increased institutional interest.

• Pakistan Financial Services Expansion: Regulatory progress and closing milestones for Jazz’s acquisition of a controlling stake in TPL Insurance could provide a tangible near-term proof point that VEON is widening JazzCash’s ecosystem beyond payments into broader digital financial services. If completed on timeline, the deal would strengthen the group’s fintech narrative in one of its most important growth markets.

• 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.

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.