管理層發言
Hello, and welcome to VEON's Q2 2026 results presentation. Today's presentation will be followed by a Q&A session where we will take questions from the room as well as from virtual attendees. For those of you who have joined the Zoom webinar, if you would like to ask a question, you can use the raise hand button, which can be found on the black bar at the bottom of your screen at any time to join the queue to ask a question. And you will be called upon during the Q&A session. For those of you watching on the webcast, if you would like to submit a written question, please use the ask a question tab at the top right of your screen. These questions can also be sent in at any time during the presentation. As a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Anand Ramachandran, you may begin.
Thank you, Lucy. Good morning, and good afternoon to everyone joining us for VEON's second quarter results. We are the largest Nasdaq-listed company on the ground in Dubai. And we are taking this opportunity to host this call out of New York, and we are very pleased to be able to do that. So we thank the people in the room who have joined us. Thank you for the people who have joined us on the webcast. My name is Anand Ramachandran, Chief Corporate Development Officer. Let me introduce management in the room. Next to me is Kaan Terzioglu, Group CEO. Next to him, Burak Ozer, Group CFO. As usual, Kaan will begin with the strategic and operational highlights, followed by Burak with a review of our financial performance. We will then open up the call for Q&A. Before we begin, do note that today's presentation contains some forward-looking statements involving risks and uncertainties. Further details are available in our SEC filings, including our Form 20-F. Our earnings release and presentation are also available on our Investor Relations website. With that, let me hand the call over to Kaan.
Thank you, Anand. Good morning, everyone. So exciting to have you in the room here in New York and do this earnings release here. Beyond excellent financial results, this quarter marks another important milestone in VEON's transformation. We are becoming much more than a telecommunications company. Today, VEON is building one of the world's largest digital ecosystems across emerging markets, combining connectivity, financial services, digital consumer platforms, and enterprise solutions. Our telecom networks connect more than 150 million customers. Our digital platforms deepen those relationships every day. The result is stronger growth, stronger cash generation, and increasing shareholder returns. Most importantly, today's results give us the confidence to raise the outlook for the year. Let me explain how we think about VEON today. Everything begins with connectivity. Connectivity is not the destination. It is our foundation. It is our competitive advantage. It gives us scale. It gives us distribution edge. It gives us trust. And it gives us daily engagement with millions of customers. On top of that foundation, we have built three digital growth engines: financial services, digital life, and digital enterprise. They reinforce one another. Every new service strengthens the customer relationship. Customers stay longer. They spend more. They generate more data. Better data improves AI. Better AI creates better products. Better products create more cash. That cash allows us to invest again. That is the VEON flywheel. Once you understand the flywheel, results are much easier to understand. Growth is broad based. Telecommunications continues to grow, twice as fast compared to traditional players. Digital is growing substantially faster. Multiple times faster. Digital now contributes almost 27% of our total revenues. Cash generation continues to improve. Since August 2024, we have already bought back $183 million worth of shares. Today, we are taking the next step. Starting with this year, we commit to canceling at least $100 million of shares every year. Not as a one-time action, but as a sustainable capital allocation framework. I am particularly pleased with the consistency of our execution. That consistency is why we are raising our full-year guidance. A little color. Reported EBITDA growth was affected by three exceptional accounting items. Bangladesh benefited from a provision release last year. Profit comparisons include the Pakistan tower transaction last year. And this year, it includes the noncash fair value adjustment on Kyivstar Group warrants. If you adjust for these items, our underlying business is even stronger. Revenue grew 18%, EBITDA grew more than 15%. Like-for-like earnings per share actually grew 88% year on year. This is the clearest measure of our true momentum. On the subject of consistency, Pakistan continues to deliver outstanding performance. Ukraine continues growing despite extraordinary circumstances. Kazakhstan, Uzbekistan, and Bangladesh all delivered. This matters. It tells us that VEON's operating model is becoming repeatable across markets. Only a few years ago, digital represented a relatively small part of our business. Today, digital has become one of our main growth engines. Our digital platforms now reach more than 227 million customers. Importantly, all three digital businesses are profitable: financial services, digital life, digital enterprise. They scale efficiently. They require less capital. And they generate attractive returns. Digital revenues grew more than 53%. Digital EBITDA increased more than 66%. Digital is now generating profits and cash more than the telecom business. Financial services best demonstrates how the flywheel works. We do not begin with lending. We begin with engagement. Customers use payments every day. Daily engagement builds trust. Trust creates data. Data improves underwriting. Underwriting enables lending, insurance, and wealth management. Pakistan demonstrates this model at scale. JazzCash has evolved from a payments application into a complete financial ecosystem. Our acquisition of TPL Insurance represents another important milestone in that journey. And our Mastercard partnership will accelerate AI-enabled financial products across every market. If there is one slide, I hope you will remember it: connectivity brings customers and digital deepens engagement. Engagement increases loyalty. Higher cash generation funds better products. Every turn of the wheel strengthens the next. That is why multi-play customers already generate significantly higher value, and why we believe we are still in the early chapters of the story. With that, I will hand over to Burak to take you through the financials in more detail. Burak?
Thank you. In the second quarter, revenue grew 17% to $1.27 billion, with growth across all of our five markets. First half revenue also grew 17% to $2.47 billion. Telecom revenue grew 7.6% to $929 million, driven by disciplined pricing and rising customer engagement. Digital revenue grew 53.6%, reaching $342 million, reflecting growth in adoption across platforms and products, plus our recent acquisitions. EBITDA reached $552 million, up 6.2% at a 43.4% margin. Half-year EBITDA grew 11.5% to $1.07 billion. Telecom and infrastructure EBITDA were $428 million, down 3.8%, at a 46.1% margin. As Kaan noted earlier, year-on-year comparison reflects last year's Bangladesh provision release. Digital EBITDA grew 66.2% to $123 million. Digital is less capital intensive than telecom, and that is driving strong cash conversion as it scales. Profit and EPS for the period reflects $489 million of gain on the Pakistan tower sale in the second quarter of last year, and a $22 million fair value loss on KGL warrants in this quarter. Cash generation was strong in the period. Operating cash flow rose 238% in the quarter to $463 million and 51% for the first half to $860 million. Equity free cash flow after leases and licenses grew 47.5% for the first half to $320 million. EFCF for the second quarter was impacted by prepayment of taxes in Pakistan that will not reoccur. Now turning to balance sheet and capital allocation. We ended the quarter with $2.2 billion in cash, including $468 million at headquarters. Net debt, excluding leases, was $1.8 billion, with lease-adjusted leverage at 1.1 times. We completed the $1.4 billion bond offering this quarter, substantially addressing our 2027 maturities ahead of schedule and extending every headquarters debt maturity beyond four years. With that, I will hand the call back to Kaan.
Thank you, Burak. Let me return to capital allocation. Since August 2024, we have bought back $183 million of shares. We delivered exactly what we said we would. Now we are institutionalizing that discipline. Beginning this year, we will cancel at least $100 million of shares annually. Returning capital to shareholders is now part of our long-term financial framework. We are seeing strong execution. Digital is scaling faster than expected. Cash generation continues to strengthen. And as a result, we are increasing our guidance. Revenue growth is now expected to be 15% to 18%. EBITDA growth is now expected to be 9% to 12%. Our capital expenditure outlook remains unchanged. These revisions reflect confidence in the underlying strength of our business. Looking ahead, please join us at our Capital Markets Day in New York on November 16. There, we will present the next chapter of VEON's long-term strategy and value creation. Let me leave you with one thought. Connectivity provides the foundation. Digital creates the growth. And the flywheel generates the returns. Our second quarter results demonstrate that this strategy is working. And I believe we are only at the beginning. Thank you very much. Operator, now we can take the questions.
Maybe, operator, we start with questions in the room. And then I will probably queue in to get questions from online attendees. Thank you. In the room would be great if you could put your hand up. There is a mic which will come around to you. If you could state your name and your institution and then your questions, that would be great. Tim?
Always. So as I mentioned, consistency was one of the key drivers. You may notice a little bit of out-of-cycle results from Kazakhstan, but this is normal. And it is fundamentally due to the VAT regulations change in the country, which was a six-percentage-point increase. Now the concept of how much of this is devaluation and how much is performance. Our business model is very simple. The way to do business in frontier markets and emerging markets relies on your ability to continuously, in a disciplined way, adjust your prices with nominal GDP growth. And we rely on the fact that GDP and GDP growth is the best indicator of our wallet share success. Now devaluation and inflation will converge in three-, five-, seven-year cycles. We are keeping our discipline on that front, and currently we are expecting actually about 9.5% inflation in weighted average in our markets. This is up from 8% and the overall devaluation is 3% less than what we have expected to happen. From a currency perspective, the currency assumptions in Q1 versus Q2 did not change. So it was mainly organic from a growth perspective.
分析師問答
Yeah. Hi. This is Anand from Barings. I just want to talk a bit about your financial services business. So I see that you have achieved about 45% of your growth in the first half. What is the latest in terms of your regulatory development outlook? Particularly with Bangladesh? So maybe you could talk about the latest for Pakistan, which I know is much more mature. Bangladesh and Ukraine is very early, but we started out for Ukraine maybe even when new licenses might be available, etc. Thank you.
So let me, first of all, give a little bit of color on our business. Our business is really doing extremely well in Pakistan. We have 60 million bank accounts on a monthly basis, 27 million active users of our platform, JazzCash. We issue 225 thousand nano loans every single day. We transact close to 16% of Pakistan's GDP. We have 1.6 million merchants on our network. We are a financial giant when it comes to the landscape. And, naturally, with that comes responsibility to work hand in hand with the authorities, including the finance ministry and central bank, to make sure that we are basically serving the people in the right levels. I am confident that the regulatory environment will also support us to expand our capacity to even grow our lending potential. This success, we believe, is quite repeatable in other markets, in Bangladesh and in Uzbekistan. That is why we are working again with the new government of Bangladesh in terms of creating the right platform for us to launch, which we will start with payment services and later on move into a full financial ecosystem in Bangladesh as well. And I expect that to happen in Q3. With regard to our operations in Pakistan, in order to accelerate deployment of similar services in all the countries, we are looking forward to getting necessary digital banking licenses in every single market. We do have already payment solutions and digital wallets in Kazakhstan. And in Ukraine, we are looking for the regulatory environment to allow us also to proceed in the same direction.
In Ukraine, is there enough opportunity to work by to kind of have a halfway solution before you can get your own full license? Could you work with maybe a bank to start building financial services?
It is early to give you an answer on that, but, clearly, we will be looking for every possible business model in terms of how we can serve our customers the way they deserve the service.
Thank you. You have a great relationship with SpaceX and Starlink. Could you just describe that relationship, how it is evolving? Also, how's the quality of the service that they are providing to you? And how do you think that connectivity changes these value-added services over time based on the fact that we are going to have connectivity almost everywhere?
As I mentioned, connectivity is the foundation. It is our competitive advantage. And there is no excuse for it not to be available. It has to be ubiquitous. It has to be affordable and accessible because all our business model relies on that connectivity in the digital services part. Now if you assess the situation in different countries, we operate in emerging markets and frontier markets. In Ukraine, there is an ongoing war, and there are cases where our terrestrial infrastructure may not be accessible due to landmines. It might be on the front line. There might be energy outages. And in those cases, we have observed that it is essential to integrate our terrestrial network with satellite platforms, and that is exactly what we did. As of last quarter, more than 6 million people utilized the capabilities of connecting their smartphones without any other additional equipment directly to satellites and utilize messaging and light data services. This is remarkable because if you think about it, this allows us to be relevant to our customers literally every single minute in a day. It also gives us the advantage of being a trusted partner when it comes to connectivity. We are expanding these to other markets like Kazakhstan and Bangladesh. We do not see Starlink as a substitution; we see it as complementary. And we are naturally in our markets in sovereign countries with sovereign regulations protected in a way to keep our license and our technical responsibilities in each country to serve the populations in a safe and secure manner. I look forward to extending our partnership with Starlink, but clearly there are going to be many other alternatives, and we will do our best to make sure that our customers are always connected so that they can always do financial services on our platforms, access marketplaces, healthcare services, education services, and entertainment services if they are our customers on the connected side.
So I know you have had this for a little while and it sounded like it was working well. How's the data connectivity going? And related to that, do you have an exclusivity for a period of time with them?
First, in terms of quality, we have initiated the light data services in Ukraine, and we are optimizing certain applications and Sasho is also here, our CEO in Ukraine. Those applications are optimized in a way that they can function in this light data environment. We do not have exclusivity. I do not believe in exclusivities. Customers have the exclusivity to select their telecom operator when it is necessary.
Thank you.
I do not see any other questions in the room. So, operator, shall we pass to the online attendees for their questions? Thank you.
For those of you in the Zoom webinar, if you would like to ask a question please click on the raise hand button on the bottom of your screen. When it is your turn to ask a question you will receive a prompt to be promoted as a panelist. Please accept. Wait a moment. Once you have been introduced, you may unmute yourself, turn your video on, and ask your question. Written questions can be submitted on the webcast by using the ask a question tab at the top right of your screen. Our first question comes from Nicholas Paton with Edison Group. Please turn on your video, unmute yourself and ask your question.
My apologies. Can you hear me now?
We can.
Excellent. Thank you. A couple of questions. So the first one on the guidance. I am just trying to understand by how much the guidance has changed since the full-year 2025 numbers. So at the low end of the guidance, full year 2025 we were at 9%. We are now at 18% for the top end of the guidance for the second quarter. And on EBITDA, we have gone from 5% at the low end to now 12% at the top end. Can you just run us through briefly the key drivers of that change? And I guess the question from investors is what makes you so sure that you can achieve those numbers now when you were unsure you could achieve those numbers at the top end of the scale at the full-year 2025 numbers? And the second question is regarding the new businesses. The numbers really are an impressive set of numbers, and the digital businesses have been growing like crazy. But when you look at the digital businesses, let's say three to five years in time, are you still able to leverage the capital returns that come from the established fixed asset base or do you have to invest more in the fixed asset base? And how do those returns on capital change between the core telecom business and the additional business, say three to five years' time? I am reminded of your answer on the first quarter when you went through the difference between the digital and the core telecom returns on capital. I thought that was very instructive. So I'd be interested to hear an update on that and how you think those capital returns change through time. Thank you.
Nicholas, thank you very much. Actually, you know, you are absolutely right. I wish we could have been more precise two quarters ago. But the flywheel is working. And the flywheel is working better than we expected. And as you have rightly pointed out in your second part of your question, it is growing. It is growing 50%, 60% year on year and it is beyond what we have expected. But it is not only about the top-line growth. The EBITDA growth of digital services is also above our expectations, significantly above. Actually, EBITDA grew 66%. So the margin on the digital services is expanding as well. So those two things combined give us the confidence to raise our guidance. And I think what we see is that it is a sustainable business model. We are systematically seeing that more customers are embracing our solutions, and we still have room to sustain this growth. When it comes to cash generative capacity, our original business idea a year ago was that the digital services would deliver a margin of 20% to 25%. We are at 36%. And digital services has a CapEx-to-revenue ratio of 7%. 36 minus 7 makes 29. On the foundation side, we do have a margin of 45% and 20% goes to CapEx, and you end up with 25. So that is why I am saying the digital services cash generation capacity has exceeded our expectations as a business model a year ago, which I am very happy to see. Having said that, please do not forget the foundation is our competitive edge, and we will not stop investing in that. We will keep investing where it is necessary. Just like in Pakistan we have recently bought some spectrum. We are now lighting up the spectrum for 4G, extended 4G, and 5G. We will do exactly the same in other markets. But the balance of our growth coming from digital will slowly put us in a better position in terms of cash generation capacity. I am happy that it is happening faster than we expected. Apologies that the expectation was not spot on two quarters ago, but I think we are on the right side of that equation.
And so just to copy the question on whether we will spend more in the future: yes. But the CapEx ratio will not go over 7% for digital. With the growth in revenue accelerating, definitely we will stay with the same CapEx ratios.
Sorry. Just for you, is 7% CapEx to sales for the digital businesses in isolation?
Yes. That is today what we spent.
But you were saying that it will not go above that in the future either?
Yes. Because of the growth in the revenue projections. I actually will expect it to decline in a way.
If I may just add on to that, at the end of the first quarter, I think we pointed out that we wanted to see how the macro impact of what was happening in the Middle East and oil price did in operations. We made the very clear point of, therefore, holding on EBITDA just to get better clarity on how things evolved. And clearly, seeing it turned out better than we thought, not just on the margin side, but also on the revenue side. I think that is also the additional fact that I wanted to point out that leads to where we are today relative to year end.
And so I will echo the point: we will definitely use cash for shareholder return. On top of that, we will look at M&A opportunities for in-market consolidation and on the fintech side as a priority. Last but not least, we will be addressing some higher-cost debt that is sitting on the balance sheet today to make sure that we balance the cost-of-debt ratio in terms of interest expenses.
Makes sense. Thank you, guys.
Our next question comes from Adrian Francis Cundy with Emerging and Frontier Capital. You may now unmute your audio, turn on your video, and ask your question.
Good morning, Kaan, Burak, Anand. It is good to see you, and congratulations on delivering again this quarter. I have two questions. One about just sort of your use of headquarter liquidity going forward given that you have really turned the corner on the debt restructuring and that you have moved into a positive free cash flow to equity profile. You have nearly $1 billion of cash at the headquarters, and no major repayments until 2027, out beyond what you are upstreaming till 2031, 2033. Can we sort of expect further reinvestment of that cash into any of the key countries, particularly if a need to capitalize a digital bank? Or do you think you can continue to grow those opcos with their domestic cash flows? And M&A broadly, is that now new markets that you are keeping an eye on given that you have dry powder at the headquarters? That is my first question. Now my second question comes down to sort of the coming back to the capital and CapEx intensity. 5G launching in Pakistan, Uzbekistan talking about significant investment in 5G. Post the sale of Mobius. What do the relative margins look like between a Starlink data ARPU versus a terrestrial ARPU on 5G, which is more profitable? And where will you focus your 5G investment and are you confident that you can continue to extend 4G, early-stage 5G, and high-density areas at the current CapEx-to-sales ratios?
Adrian, let me first start with the part about M&A. We are extremely disciplined when it comes to decisions about growing through inorganic means. Naturally, there are very accretive in-market consolidation opportunities that we will always be looking at. But I truly believe that our stock price trading today at around 3.5 times EBITDA is not at the level that would make us broadly pursue acquisitions, and I will keep that discipline very strong over the next couple of years. Of course, in-market consolidation—naturally accretive synergies—these are things we will be in the market continuously for. Now you asked about the profitability of Starlink versus our other networks, terrestrial networks. If you look at the cost of producing mobile data on terrestrial networks in terms of deployment of towers, equipment, etc., versus having access to satellite connectivity: let me give you an example in Kazakhstan. The size of Kazakhstan is probably bigger than the entire United States, and 20 million people live there. If I tried to deliver license requirements just along railways and roads based on terrestrial networks, it would cost a fortune. So I do not actually see cost differentials or additional cost when it comes to access to satellite platforms compared to terrestrial connectivity. I consider it quite reasonable when comparing the cost of satellite connectivity versus terrestrial connectivity. Having said that, this is not about substituting terrestrial networks and fiber networks with satellites; it is about complementing them when needed. In that regard, the utility value to the customer is definitely much higher than the cost of the technology it brings.
And just to add to that, as Kaan said during the presentation, we will definitely use cash for shareholder return. On top of that, he mentioned the M&A opportunities in order to grow our business for in-market consolidation, maybe on the fintech side as a priority. Last but not least, we will be addressing some higher-cost debt that is on the balance sheet today.
Good. Thank you very much.
Our next question will come from Matthew Harrigan with StoneX. Please unmute and ask your question.
Great. Thank you. Firstly, when you look at the digital side, you are a market leader in some areas with substantial TAMs. How do you see the utility of LLM models developing for your frontier markets? Are they eventually monetizable in concert with your partners? Secondly, in some other markets you have targets like 5x EBITDA. When you think about valuation, without giving a number, should people be doing 10-year models rather than five-year models? Growth rates relative to GDP—do you think you get a fundamental rerating of Pakistan or Ukraine if they start trading like more developed peers? Thank you and congratulations.
Thank you, Matthew. Let me start with the valuation point. If you look at similar financial services businesses, this is a unique market and the value we are creating is significant. Pakistan is a $2 billion run-rate business for us and that excites me a lot. Now regarding AI and LLMs: I was reading today a relevant comment from another CEO, and the fundamental reality we have to focus on is value proposition to customers. The transformation we have been going through for three to four years now is selling meaningful digital services. AI will change the landscape as well. We will be providing customers with an intelligence platform. I like to talk about superintelligence—giving customers a chance to become superheroes at work and develop a better version of themselves for a small fee, say $2 a month. That is where we are headed and that is our AI strategy. It will be all across our services. We have no problem with customer acquisition costs. We have speed to market bringing these LLMs to the fingertips of our customers, and I see huge revenue potential. We are working with every country in our portfolio. I believe developing sovereign LLMs is a primary business priority—developing data and inference capacity for customers is a large opportunity, and these are things we have funded and will continue to fund.
So I think this is also a clear indication of management's perception that the stock is significantly undervalued. Today, we announced continuing buybacks and cancellations, which we think is a clear vindication of what we think about the stock price.
Our next question comes from Max Findlay. Please unmute and ask your question.
Hi all. Thank you for speaking to us today. My questions are focused on performance within your different markets. Bangladesh is tough but you are offsetting this with impressive digital performance and cost performance. It would be interesting to get your thoughts on how recovery proceeds from that market. Secondly, Bangladesh Digital grew about $12 million in absolute terms. Can you provide some color on what contribution came from holding the rights to the World Cup and what we should expect from this in Q3? And on broader expectations about the fintech business, which you hope to get by the second half of the year. Finally, Kazakhstan was a difficult quarter with local currency ARPU down and margins dropped; is the shift in customer strategy working? What can we expect in terms of margin recovery in the near term? Thank you.
Thank you, Max. Let me start with Bangladesh. I am happy to see the stabilization of the business, and we have been consistently growing the last three quarters year on year. This quarter is interesting because it shows the potential of the country. There was significant power and energy load shedding in Bangladesh in April and May that reduced data consumption by about 15%. In an emerging market you would expect data consumption to go up 40% year on year, but this happened because of energy outages and practical supply constraints. Despite this, we managed to grow our business. What really excites me in Bangladesh is that we broke records. I was speaking with Google executives recently and they said they had never seen anything like this: in the World Cup, broadcasting the games to the Bangladesh population and the diaspora was extraordinary. I was at a restaurant yesterday in New York and the moment I said Toffee and Banglalink, someone said they watched as well. The monetization potential we see there is helped by the World Cup. I congratulate the hosts for an excellent World Cup and the engagement it delivered in Bangladesh. I am more positive than other players in the market on progress and development in Bangladesh. When the energy situation normalizes, we will see higher growth rates. Now coming to Kazakhstan, there are a couple of things to bear in mind. First, VAT rates increased by 6%, and that had a significant impact on the top line because we were not able to fully adjust pricing immediately. Second, we have a model of bundling smartphones into family packages. It is a great idea, but it has temporary fluctuation in margin because of accounting treatment. Those two dynamics impacted the quarter. I am not concerned. Kazakhstan is the most advanced digitally aligned market in our portfolio, and we are doing well despite providing 4G advanced services. We have an advantage in customer satisfaction and net promoter scores. Overall, I see Kazakhstan as a temporary issue in terms of margin erosion, and I am confident the market will prove itself over time.
It is a shame there are no more Tartan Army supporters in Bangladesh, but we live in hope. Just coming back to the EBITDA margin point on Kazakhstan: is this margin depressed at the moment because you are bundling it with low-margin equipment revenue, so you do not expect further deterioration and margins will stay around the 40%–45% range where they were in Q1 and Q2? Is that the right way to interpret it?
Max, first of all, let me correct one thing: we do not subsidize equipment, so it is not a matter of margin dilution because of equipment subsidies. It is a matter of revenue recognition, which recognizes some of that margin in previous quarters rather than this quarter. It is a cyclical movement of volumes of business and the accounting treatment of service and equipment integration into packages.
In simple terms, we recognize equipment revenue upfront and the higher-margin service revenue gets recognized over the term. Therefore, as the business grows, we may recognize more lower-margin revenue upfront and the higher-margin service revenue will come in over time. Combine that with the 6% VAT impact and you can understand the recent performance.
Very clear. Thank you both.
Our next question comes from Ahmed Mostafa with EFG Hermes. Please unmute, turn on your video, and ask your question.
Hello, everyone. Thanks for the presentation. Two questions from my side. First, digital EBITDA margin reached 36% this quarter. What are the main levers and medium-term milestones for further margin expansion? Second, which markets still have the most headroom to increase multi-play penetration? Thank you.
Thank you for the question. There are already markets where the number of digital service customers outnumbers our telecom customers. In advanced markets—Pakistan being the highest—we are getting close to 38% of revenues coming from financial and digital services, and this is a continuum as we bring the right services to each market. On the financial services side, entertainment, healthcare, education, and AI services will drive constant increases. Our multi-play customer base rose this quarter by about 4.5%, which is a healthy trend we want to continue. The biggest upside I see is still Bangladesh, and this is related to smartphone penetration. An interesting metric: across the five countries we operate in, about 530 million people live there. The number of people connected to the Internet is 288 million. The number of digital service customers we have is 228 million. So six out of ten people who get connected to the Internet are already our customers in one way or another. We need to push for equal inclusion for women in smartphone ownership—this is our number-one priority and will require working with governments and equipment producers to increase smartphone penetration, especially among women.
Thank you.
Our next question comes from Jay Street with New Street Research. Please unmute your audio, turn on your video, and ask your question.
Yes. Hi. Sorry. Hi. This is Jay. I understand that VEON currently has a global framework agreement with Starlink and while Starlink is present in Ukraine, you are working with them in Kazakhstan and Bangladesh already. Is there a possibility of seeing this in Pakistan and Uzbekistan as well?
Thanks, Jay. I assume Chris is on vacation, so please pass my regards. The answer is yes, as long as the government allows us to. There are quite a number of regulatory steps to get to this point, and it takes time to show governments that satellite integration is essential for populations. I believe every country will integrate terrestrial networks with satellite platforms; we should not see this as a threat but as a responsibility. We are working with regulators to demonstrate the value. And our contractual terms give us benefits as we add more countries with Starlink.
Is it possible to elaborate on some of these benefits you mentioned?
I suggest we keep the commercial details to ourselves. Thanks a lot for the question, but we cannot share those specifics.
Okay. Thank you.
Our next question will come from Ali Zaidi with EFG Hermes. Please unmute, turn on your video, and ask your question.
Hi, everybody. Thank you so much for the opportunity. I have one question. You called out that there is high energy cost in Pakistan and energy-related disruptions in Bangladesh as well. In Ukraine, you responded by buying generation directly. Is that something you would consider in Pakistan and Bangladesh as well?
Good question. In Ukraine we have a stronger appetite to deploy capital for generation investments. In other markets we are looking for alternative methods. Deploying solar farms only works if there is a strong grid distributing energy in the country, and both Bangladesh and Pakistan do not yet have grid infrastructure at that level. That said, more and more there are site-based technologies that allow us to deploy solar and wind generation for specific sites. Last year we deployed one of those sites in Kazakhstan at a very remote location, which works perfectly. We will look for those solutions. There are already projects in place, especially in Pakistan, to solarize some of our sites with encouraging results.
Thank you so much.
Last question comes from Theodore O'Neill with Litchfield Hills. Please unmute and ask your question.
Thank you very much. Congratulations on the quarter. I am looking over the results and country by country you have, with the exception of Bangladesh, double-digit growth in revenue in dollars. But the mobile customer numbers are essentially unchanged. At some point do you need to see mobile customer numbers go up, or is it related to the female population and smartphone penetration that you mentioned?
We are focused on the flywheel I described: how many customers are multi-play versus only M2M SIMs or voice-only customers. We are satisfied with the evolution overall. In markets like Pakistan and Bangladesh there is still a challenge in smartphone availability. Our ability to make smartphones affordable and accessible and to penetrate markets with low smartphone ownership—especially among women—is a critical success factor. We have programs to address this, but growth in multi-play customers will pick up as smartphone penetration increases.
Thank you. See you November 16.
We have no further questions at this time. I will now hand back to Anand Ramachandran for closing remarks.
Thank you so much. I will make a last call for any follow-up questions in the room. I do not see any. So with that, thank you very much for your time and attention. As Kaan said, we will have the Capital Markets Day in November and, obviously, the third quarter results before that. Thank you very much for your attention and support to VEON. We will keep talking, but see you as part of this group again next quarter. Thank you so much. Thanks a lot.