Page 121 - RusRPTDec22

9.1.8 Telecoms sector news
Creation of Russia’s mobile ecosystem based on the Aurora operating system will require RUB480bn through to 2030, Kommersant business daily reported on November 17 citing Aurora’s development documents. “Implementation of a mobile ecosystem based on the Aurora operating system will require 480bn rubles until 2030... The development project of (state-controlled telecom operator) Rostelecom’s operating system envisages production of around 70mn smartphones using the system produced by Russian companies,” Kommersant reported. A representative of Rostelecom told Kommersant that the sum is “the largest assessment.” According to the project’s development passport, it will be financed by the Digital Public Management federal project and the Digital Economy national program. After the project is implemented, sales revenue is to amount to 28bn rubles in the first year of sales.
Veon reported 3Q22 trading update– mixed, slight consolidated revenue increase as expected
§ Consolidated revenue grew 4% y/y (to $2.08 bn), EBITDA was flat y/y (at $0.89bn; +2% y/y excl. one-offs; 43% margin). Net FX impact on growth was minor this quarter: strength in ruble against dollar y/y offset weakness in some other currencies.
§ Key growth drivers remained being businesses in Kazakhstan (in local currency, revenue +23%, EBITDA +9%) and Pakistan (+12%; +7%). In Ukraine, performance expectedly remained weak (+5%, -11%).
§ In Russia total revenue declined 6% in rubles, while EBITDA grew 7% (43% margin). The reason for revenue decline was a 59% drop in equipment sales revenue. Meanwhile, mobile service revenue continued to grow slightly (by 2%). Veon did not comment on reasons for EBITDA increase, but in the previous quarter, it explained it by revised pricing for devices, optimized mobile services bundles.
§ Net debt/EBITDA including lease declined to 2.4x from 2.9x in 2Q22 (2.4x in 1Q22) thanks to completion of the deal in Algeria, we believe. The company had $3.3 bn cash at end 3Q22, including $2.6 bn at HQ.
§ Capex in 3Q22 remained at c22% revenue ($0.4 bn) as in 1H22, 3.6pp below y/y.
Total revenue of Russian mobile operator VimpelCom, working under the Beeline brand, decreased 6.1% on the year to 70.696bn rubles in July–September, as calculated under International Financial Reporting Standards (IFRS), the company’s owner, Amsterdam-based VEON said in a statement on November 3. The company said revenue was “impacted by a 58.5% decline in equipment revenue due to lower devices sales.” Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 7.3% to 30.290bn rubles. The EBITDA margin climbed 5.4 percentage points to 42.8%.
121 RUSSIA Country Report December 2022 www.intellinews.com