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Veon eyeing digital partnerships in Russia after tower asset sale

Telecoms operator Veon is eyeing partnerships in Russia, the major market where it operates, as it strives to shift its focus to high-margin digital businesses after selling its tower assets, CEO Kaan Terzioglu told Reuters.

Veon, which serves more than 200 million users in countries as diverse as Pakistan, Ukraine and Uzbekistan, is growing in 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 said on Wednesday, one of several companies developing streaming services in addition to their core business in Russia.

Telecoms rival MTS launched its KION online cinema earlier this year, while dominant lender Sberbank’s Okko and tech giant Yandex’s Kinopoisk compete with private player IVI.

“You will see us partnering in an aggressive way with all the players in the market place,” said Terzioglu, speaking with Reuters from Veon’s headquarters in Amsterdam via video-link.

“You could see partnerships with Beeline TV, but also with Beeline itself, also taking products to the market.”

The digital push comes as Veon is selling tower assets, an industry-wide trend as telecoms firms cash in on the money-making power of masts, while others look to create separate tower units as a way of keeping a chunk of potential future growth.

“No telecom company in the world will be able to afford the tower assets by themselves,” Terzioglu said. “Network sharing is a must and you will see that as 4G intensifies, as 5G comes in.”

Veon said in September it was selling its Russian tower assets for $970 million, with the deal expected to close in the fourth quarter of this year.

Terzioglu said capital expenditure reductions and network sharing capabilities made it a good deal for the company, which he said made a net present value of almost $200 million and also benefited from first mover advantage in Russia.

“I would not be surprised if others follow us,” he said. Reuters


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