Reinventing VimpelCom

Our strategy

There are six key strategic priorities as part of the program that focuses on three core elements:

  • Finding new revenue streams and selectively consolidating a number of markets to ensure that VimpelCom is either #1 or a strong #2 in each of our markets
  • Transforming the cost base by simplifying, digitalizing and reinventing business models, processes and systems
  • Operating VimpelCom in line with world-class standards and addressing structural issues within the business

Strategic priorities

The six strategic priorities are:

#1 New revenue streams

There are several areas that provide opportunity for further growth in telecoms: data, fixed broadband and B2B. VimpelCom needs to accelerate monetization of data growth, leveraging its device portfolio, distribution presence and control, as well as integrated data pricing. Fixed broadband is becoming a growth opportunity in many emerging markets. By smartly expanding fixed broadbrand footprint, leveraging the large mobile base and existing network, VimpelCom aims to capture growth in emerging household needs, as well as fulfilling the greater need for fixed mobile convergence. Finally, given the B2B segment's growth potential in emerging markets and a solid starting point in its operations, VimpelCom plans to leverage B2B as a growth engine.

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#2 Digital leadership

Customers across the world are increasingly leading digital lives, while new OTT providers are disrupting telecom business models. VimpelCom is reinventing itself as a digital operator and building strong relationships with customers in a digitally focused model. VimpelCom aims to expand its role beyond connectivity, leveraging its direct relationship with consumers and capturing digital services opportunities in segments that can deliver sizable growth in the mid-term. VimpelCom will also exploit asset-light models through partnerships, make effective use of current assets, and look to drive an increase in customer engagement.

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#3 Performance transformation

The telecom industry has developed a complex operating model with high fixed costs and a high level of investment to keep up with new services and new technologies. Profits have been declining and, as a result, this model is no longer sustainable. VimpelCom's cost model needs to be profoundly changed by simplifying and digitalizing the business. At the same time, VimpelCom needs to reinvent and operate the lowest-cost model across all operating companies.

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#4 Portfolio and asset optimization

In the telecoms marketplace, being #1 or strong #2 makes a substantial difference and, to a certain extent, determines profitability. VimpelCom will be undertaking selective transactions in a number of markets to reinforce its strategic position by acquiring either mobile and/or fixed broadband assets.

In addition, VimpelCom intends to transform its network model to be more asset-light by evaluating options to monetize the tower portfolios, as achieved in Italy, as well as structuring network sharing partnerships to roll out leading networks more efficiently and effectively.

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#5 World class operations

VimpelCom needs to be the best at what it does. The aim is to develop long-term leading positions in each of its markets, by focusing on the customer and offering a superior customer experience.

For VimpelCom to become a world leader in the digital economy, not only a transformation of the business is needed, but also a strong ethical culture across the whole footprint, that lives up to VimpelCom's zero tolerance for breaches of procedures or Code of Conduct rules and that is in full compliance with all local and international laws.

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#6 Structural improvements

The business has been hampered in the past by several structural issues that have impacted its attractiveness to investors. VimpelCom has made significant progress in these by, for example, addressing its debt structure through the refinancing of WIND´s debt, lowering its interest rate and extending maturities. The proceeds of the Algerian transaction, where 51% was sold to the Algerian National Investment Fund in 2015, were used to repay Group indebtedness.

As VimpelCom delivers against these strategic priorities, it expects a sustainable increase in annual cash flow of USD 750 million by 2018 against the 2014 baseline. In 2015 the company already made substantial progress, mainly driven by Capex efficiency, with over 40% of the USD 750million target achieved.

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