Russia

Map of Russian operations

Business Unit strategy

VimpelCom’s goal in Russia is to reach sustainable Profitable Growth by increasing Customer Excellence and increasing Operational Excellence, while reducing churn and cost of sales. To achieve these goals, the Company has entered phase 2 of its transformation process, which focuses on building a customer centric organization with a focus on Customer Excellence.

Priorities

  • Ensure healthy growth by focusing on Customer Excellence
  • Create lean and cost-efficient operations
  • Explore new revenue growth areas
Mobile Internet statistics. 24% CAGR from 2013 to 2016

Summary Financial

RUB million 2013 2012 YoY
Revenue 289,910 285,375 2%
EBITDA 121,422 120,478 1%
EBITDA margin 41.9% 42.2% -0.3p
Mobile customers ('000) 56,512 56,110 1%
Fixed broadband customers ('000) 2,300 2,378 -3%

*Source: Company estimates

Italy

Map of Italian operations

Business Unit Strategy

In Italy we aim to continue to outperform our competitors increasing the Company’s revenue market share and focusing on high margins and cash flow generation. We will focus on growing our market share where we have less than our fair share, expanding and capturing the opportunities offered by the strong growth in mobile Internet. These initiatives will be supported by the evolution of our “smart, value for money” positioning characterized by simple and transparent tariffs, investments in network, distribution, brand and a passionate management team.

Priorities

  • Create superior customer experience and clear offering positioning in order to deliver Customer Excellence
  • Continue to outperform market in mobile data in order to deliver Profitable Growth
  • Drive cost efficiency through initiatives in order to deliver Operational Excellence
  • Network sharing in order to deliver Capital Efficiency
Mobile internet revenue increased by 35.2% in 2013

Summary Financial

EUR million 2013 2012 YoY
Revenue 4,983 5,427 -8%
EBITDA 1,943 2,062 -6%
EBITDA margin 39.0% 38.0% 1.0 pp
Mobile customers ('000) 22,292 21,650 3%
Fixed voice customers (‘000) 2,963 3,110 -5%
Fixed broadband customers ('000) 2,191 2,210 -1%

Africa and Asia

Map of operations across Africs and Asia

Business Unit Strategy

VimpelCom’s Africa & Asia Business Unit operates in seven countries under five brands: Djezzy in Algeria; Mobilink in Pakistan; banglalink in Bangladesh; Telecel in Sub Saharan Africa (Zimbabwe and Central African Republic); Leo in Burundi; and Beeline in Laos. These markets are characterized by relatively low mobile penetration rates and young populations, offering an opportunity for high organic growth potential. Additionally, VimpelCom expects high organic growth potential within these markets by capturing voice and VAS revenues. VimpelCom’s strategic focus remains on growth in mobile data, which is supported by investments in high-speed networks, the promotion of Mobile Financial Services (MFS) and partnerships with OTT players.

VimpelCom maintains strong market leadership positions in the Africa & Asia Business Unit, providing a solid platform for sustainable Profitable Growth. Furthermore, the Business Unit is able to manage its Value Agenda and implement mechanisms to improve efficiency in its business. Finally, by leveraging VimpelCom Group’s size, the Business Unit is able to realize CAPEX efficiencies within its cost-optimization strategy.

Priorities

  • Invest in high-speed 3G networks and modernize existing 2G networks
  • Capture mobile data opportunities and expand VAS revenue
  • Defend market leadership in Algeria and Pakistan
  • Grow beyond the core, especially MFS in Pakistan and Bangladesh
  • Continuous focus on Profitable Growth and cost saving initiatives

Summary Financial

USD million 2013 2012 YoY
Revenue 3,506 3,721 -6%
EBITDA1 1,671 1,741 -4%
EBITDA margin1 47.7% 46.8% 0.9 pp
Mobile customers 88,947 83,518 7%

1. Excluding one-off charges related to the resolution in Algeria of USD 1,266 million

Ukraine

Map of operations in the Ukraine

Business Unit Strategy

Our strategy is to deliver sustainable cash flow generation through improved positioning as the largest integrated telecom operator in Ukraine, with a growing customer base predominantly using mobile bundled tariff plans and further expansion of non-mobile business coupled with lean cost management and capital efficiencies.

Priorities

  • Maintain leadership in mobile
  • Deliver the best customer experience
  • Deliver growth in mobile and fixed data, content services
  • Maintain cost efficiencies
Telecom market expected to grow 0.3% CAGR 2013 to 2016

Summary Financial

UAH million 2013 2012 YoY
Revenue 12,871 13,392 -4%
EBITDA 6,239 6,867 -9%
EBITDA margin 48.5% 51.3% -2.8 pp
Mobile customers 25,756 25,056 3%
Fixed broadband customers 762 613 24%

CIS

Map of operations in CIS

Business Unit Strategy

CIS has a large and growing addressable market with mobile service penetration still growing in most countries of operation and low mobile data usage, which creates promising prospects for VimpelCom’s future growth in CIS. In leveraging this opportunity, the Business Unit is focused on increasing net cash from operating activities as part of the strategic Value Agenda. Each CIS country is focused on efficient management of CAPEX and OPEX to ensure sustainable cash flow generation.

Priorities

  • Further growth in revenue and usage in core mobile business
  • Strengthening market positions in all markets
  • Boosting mobile data services
  • 2G and 3G network expansion
CIS telecom market is expected to grow 2.2% CACGR 2013 to 2016

Summary Financial

CIS (USD million) 2013 2012 YoY
Revenue 1946 1,755 11%
EBITDA 856 813 5.1%
EBITDA margin 44.0% 46.3% -2.3 pp
Mobile customers 25,408 24,167 5%
Fixed broadband customers 354 326 9%