Russia

Russia map

Business Unit Strategy

VimpelCom’s goal in Russia is to reach sustainable profitable growth by leveraging all revenue streams and increasing operational efficiency, while reducing churn and cost of sales. To achieve these goals, the Company launched thoroughly designed initiatives, including Operational Excellence and Customer Experience programs targeted to deliver results at multiple levels of the business structure.

Priorities

  • Enhance network capacity and quality
  • Create lean and cost-efficient operations
  • Reduce churn and increase customer loyalty
  • Invest in new pockets of growth
Mobile data continues to be one of the fastest growing revenue streams

Key facts

Summary Financial

RUB mln 2012 2011 YoY
Revenue 285,375 266,087 7%
EBITDA 120,478 106,681 13%
EBITDA margin 42.2% 40.1%  
Mobile subscribers ('000) 56,110 57,224 -2%
Fixed broadband subscribers ('000) 2,378 2,073 15%

*Source: Company estimates

+30% CAGR Mobile internet expected to grow in 2012-15*

Europe & North America

Europe and North America map

Business Unit Strategy

In Italy we aim to increase the Company’s revenue market share and to focus 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 mobile Internet and mobile data, and strengthening our presence in the SME/SOHO segment. These initiatives will be supported by our “smart, value for money” positioning characterized by simple and transparent tariffs, investments in network, distribution and brand. In Canada, our goal is to provide a value for money alternative to the incumbent operators by offering a nationwide high quality and affordable mobile service.

Priorities in Italy

  • 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 such as “Network Transformation Project” and “Build The Network Project” in order to deliver Operational Excellence
  • Network sharing in order to deliver Capital Efficiency
5% increase YoY Fixed Broadband revenue up 5% YoY

Key facts

Summary Financial

EUR mln 2012 2011 YoY
Revenue 5,427 5,570 -2.6%
EBITDA 2,262 2,120 -2.7%
EBITDA margin 38.0% 38.1%  
Mobile subscribers ('000) 21,650 21,014 +3%
Fixed Voice subscribers ('000) 3,110 3,142 -1%
Fixed broadband subscribers ('000) 2,210 2,135 +3.5%
Mobile internet revenue increased in 2012 by 41.3% coupled with a 9.3% increase in revenues from traditional data services

Africa and Asia

Africa and Asia map

Business Unit Strategy

VimpelCom’s Africa & Asia markets are characterized by low penetration levels, thereby affording it the greatest growth potential within the VimpelCom Group. The Company’s key strategic focus in Africa & Asia is growth in mobile data, while, at the same time, the Company will continue to focus on capturing voice revenues with high organic growth potential going forward.

VimpelCom maintains strong leadership positions in its respective Africa & Asia markets which, in turn, provide a solid platform for profitable growth. As a result, the Africa & Asia business unit is able to manage its value strategy and implement mechanisms to improve efficiency in its businesses. Additionally, by leveraging VimpelCom Group’s size, the Africa & Asia business unit is able to realize CAPEX efficiencies within its cost-optimization strategy.

Priorities

  • Focus on mobile data opportunities with the deployment of 3G services
  • Continuous focus on profitable top line growth and cost saving initiatives
  • Defend market leadership in Algeria and Pakistan
  • Tapping into new revenue sources in light of relatively low ARPU and purchasing power
  • Expanding non-voice revenues, particularly in data and value added services
  • Increasing network CAPEX and OPEX efficiency by modernizing networks

Ukraine

Ukraine map

Business Unit Strategy

Our strategy is to deliver sustainable cash flow generation through improved positioning as the largest integrated telecom operator in Ukraine with growing subscriber base predominantly using 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
15% CAGR Mobile data revenue expected to grow in 2012-15*

Key facts

Summary Financial

UAH mln 2012 2011 YoY
Revenue 13,392 13,078 2%
EBITDA 6,867 6,953 -1%
EBITDA margin 51.3% 53.2%  
Mobile subscribers ('000) 25,960 24,776 5%
Fixed broadband subscribers ('000) 613 397 54%

*Source: Ukraine Statistic Committee 2012, Ukraine analysis

4% CAGR Telecom market expected to grow in 2012-15, mainly driven by mobile data and fixed broadband*

CIS

CIS map

Business Unit Strategy

CIS has a large and growing addressable market with mobile service penetration still growing in most countries of operation and low 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 Group 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 high margin data services
  • 3G and 2G network expansion
25% CAGR Mobile data expected revenue increase in 2012-15

Key facts

Summary Financial

USD mln 2012 2011 YoY
Revenue 1,755 1,589 10%
EBITDA 813 703 16%
EBITDA margin 46.3% 44.3%  
Mobile subscribers ('000) 24,167 19,703 23%
Fixed broadband subscribers ('000) 326 212 54%
13% CAGR Fixed data expected revenue increase in 2012-15