Russian operator Beeline said its revenues fell 3.3 percent to RUB 73.4 billion in the fourth quarter as it continued to lose mobile customers. The company said this performance reflects a more balanced approach to tariffs aimed at reducing customer churn. Beeline also announced that Vasyl Latsanych is stepping down as CEO at the end of June. A successor will be announced in due course.
Veon said the drop in the mobile customer base and the negative impact from the increased predominance of unlimited tariff plans led to a mobile service revenue decline of 5.9 percent to RUB 55.3 billion. Reported EBITDA was still up by 19.3 percent to RUB 29.7 billion, while EBITDA pre-IFRS fell by 1.6 percent in the fourth quarter to RUB 24.5 billion. This was related to RUB 1.4 billion of provisions for bad debt and inventory, slightly offset by lower commercial costs mainly related to closing more than 100 shops in October-December.
The strong growth in VAS (excluding messaging) and revenue from mobile financial services were insufficient to offset the decline in voice and messaging revenue, Veon said. Data volumes continued to grow strongly by 55.6 percent, supported by 4G population coverage increasing to 86 percent from 74 percent in the earlier period. Revenue from equipment and accessory sales increased by 6.6 percent due to higher shipments to dealerships.
Fixed revenues in Russia increased by 4.2 percent, due to increases in broadband and transit service revenue. Beeline’s FMC proposition continues to play an important role in the turnaround of the fixed business, the company said. The FMC customer base grew by 20 percent to more than 1.3 million, which represents a 50 percent FMC penetration of the broadband customer base.
Mobile subscribers dropped by 1.1 percent to 54.6 million in Russia, and the mobile data user base declined by 3.4 percent to 35.5 million. Fixed broadband customers jumped by 9.0 percent to 2.6 million at year-end.
Beeline continues to focus on the B2B segment, improving its proposition with new digital offers and solutions to both small and large enterprises. In October-December, B2B service mobile revenue increased by 5.1 percent.
Capital expenditure excluding licenses (pre-IFRS 16) increased by 82.2 percent as a result of Beeline’s commitment to improving its network quality. During the fourth quarter, the operator increased the number of 4G base stations by 38 percent. Beeline said it continues to invest in network development, with a strong separate focus on Moscow and Saint-Petersburg to ensure these cities have high quality infrastructure that is ready to integrate new technologies.
