MOSCOW: Telecom operator Veon is considering partnerships in Russia, the main market in which it operates, as it struggles to focus on high-margin digital businesses after selling its tower assets, told Reuters CEO Kaan Terzioglu.
Veon, which serves more than 200 million users in countries as diverse as Pakistan, Ukraine and Uzbekistan, is expanding into areas such as financial services and online streaming.
Beeline TV, part of its Russian unit, grew 16.7% year-on-year in the third quarter to 3.1 million subscribers, Veon, one of several companies developing streaming services, said on Wednesday. in addition to their main activity in Russia.
Telecom rival MTS launched its KION online cinema earlier this year, while Sberbank’s dominant lender Okko and tech giant Yandex’s Kinopoisk compete with private player IVI.
“You will see us aggressively partnering with all players in the market,” Terzioglu said, speaking to Reuters from Veon’s headquarters in Amsterdam via video link.
“You could see partnerships with Beeline TV, but also with Beeline itself, also bringing products to the market.”
The digital push comes as Veon sells tower assets, an industry-wide trend as telecom companies capitalize on the lucrative power of masts, while others seek to create tower units separate in order to retain some of the potential future growth.
“No telecommunications company in the world will be able to buy the assets of the tower on its own,” Terzioglu said. “Network sharing is a must and you will see it as 4G goes up, as 5G comes along.”
Veon announced in September that it was selling its Russian tower assets for $ 970 million, with the transaction expected to close in the fourth quarter of this year.
Terzioglu said the reductions in capital spending and network-sharing capabilities made it a good deal for the company, which he said achieved a net present value of nearly $ 200 million and also benefited from first-mover advantage in Russia.
“I wouldn’t be surprised if others followed us,” he said.