Global telecommunications giant VEON has announced a stellar third quarter for 2026, reporting a significant 17.2% increase in revenue, reaching $1.307 billion. This impressive performance, detailed in the company’s latest financial results, is a testament to its successful diversification into digital platforms, enhanced customer engagement strategies, and strategic capital expenditure across its key operating markets in Pakistan, Ukraine, Kazakhstan, Bangladesh, and Uzbekistan.
The telecommunications and digital services group, which operates under prominent brands such as Jazz, Kyivstar, and Beeline, has demonstrated remarkable resilience and growth, exceeding market expectations. The Q3 2026 results paint a picture of a company not only solidifying its core telecommunications business but also aggressively expanding its digital footprint, which is increasingly becoming a dominant revenue driver. This strategic pivot is evident in the substantial surge in digital services revenue, which saw a remarkable 45.9% increase year-on-year, now accounting for a significant 27.2% of the total group revenue.
Key Highlights of Q3 2026 Performance:
- Total Revenue: $1.307 billion (up 17.2% year-on-year)
- Digital Services Revenue: $355 million (up 45.9% year-on-year)
- Telecommunications Subscribers: 152.3 million (up 1.9% year-on-year)
- Digital Customer Base: 221.1 million (up 8.2% year-on-year)
- Capital Expenditure: $225 million (up 1% year-on-year)
- 2026 Revenue Growth Outlook Raised: To 16%-18%
This robust financial performance has prompted VEON to revise its full-year revenue growth outlook upwards, signaling strong confidence in its ongoing strategies and future prospects. The company is now projecting revenue growth between 16% and 18% for 2026, an increase from its previous guidance of 15%-18%. This upward revision underscores the positive momentum generated by its multifaceted growth initiatives.
A Closer Look at VEON’s Q3 2026 Financial Landscape
VEON’s third quarter of 2026 has been characterized by a balanced approach to investment and growth. The company reported capital expenditure (Capex) of $225 million, a modest 1% increase compared to the same period in the previous year. This measured investment strategy reflects a focus on optimizing infrastructure development while prioritizing the expansion of high-growth digital services.
The company’s telecommunications subscriber base has also shown steady growth, reaching 152.3 million, a 1.9% increase year-on-year. This sustained expansion in its core customer base provides a solid foundation for its diversified service offerings.
However, the true star of VEON’s Q3 performance lies in its digital transformation. Digital services revenue experienced an extraordinary surge of 45.9%, reaching $355 million. This substantial growth has elevated the contribution of digital services to 27.2% of the total group revenue, a notable increase from 21.8% in the prior year. This shift clearly indicates VEON’s successful transition towards becoming a more digitally integrated entity.
The digital customer base has mirrored this success, expanding by 8.2% to 221.1 million. This growth is fueled by the increasing adoption of digital financial services, entertainment platforms, superapps, and enterprise AI solutions, highlighting VEON’s ability to cater to a wide spectrum of digital needs.
Strategic Investments Fueling Future Growth
VEON’s capital expenditure strategy in Q3 2026, totaling $225 million, signifies a continued commitment to enhancing its network infrastructure and expanding its digital capabilities. While the year-on-year increase was minimal, the company’s overall investment approach appears to be strategically aligned with its long-term vision.
For the first nine months of 2026, capital expenditure stood at $562 million, a slight decrease of 4.7% from $589 million in the same period of 2025. This indicates a potential recalibration of investment timelines or a focus on more targeted, high-return projects. The group’s trailing 12-month capex intensity reached 18.2%, reflecting ongoing investments in both telecommunications infrastructure and digital services.
Crucially, excluding Ukraine, the capex intensity was 15.4%, comfortably within the company’s full-year target range of 15%-17%. This demonstrates VEON’s discipline in managing its capital allocation across its diverse markets. The company has maintained this capex intensity guidance for 2026, underscoring its commitment to investment discipline as it scales its network and digital offerings.
Divergent Investment Priorities Across Markets
A closer examination of capital expenditure reveals significant variations across VEON’s operating markets. Pakistan, through its Jazz brand, stands out with a remarkable 68.9% increase in investment, reaching PKR 20.947 billion in Q3 2026. This aggressive investment in Pakistan signals the company’s strong belief in the growth potential of this key market.
In contrast, Ukraine (Kyivstar) and Kazakhstan (Beeline) saw reductions in their capital expenditure. Ukraine’s capex declined by 24.1% to UAH 3.229 billion, while Kazakhstan’s fell by 29.3% to KZT 21.664 billion. These reductions, despite continued needs for network resilience and service development, likely reflect differing investment priorities and evolving operating conditions in these regions.
Bangladesh’s Banglalink, however, more than doubled its investment, demonstrating a strong commitment to expanding its presence in this dynamic market. This divergence in investment across markets highlights VEON’s ability to adapt its capital allocation strategies to the unique opportunities and challenges presented by each operating region.
Revenue Growth Across the Board, Pakistan Leads the Pack
VEON’s revenue growth was a consistent story across all five of its operating markets in US dollar terms, with Pakistan once again emerging as the strongest performer. The country contributed $522 million in revenue during Q3 2026, marking an impressive 28.9% year-on-year growth.
Ukraine followed with $352 million in revenue, achieving a healthy 17.4% growth. Kazakhstan contributed $230 million, up 8.5%, while Bangladesh generated $117 million, a modest 0.7% increase. Uzbekistan rounded out the group with $86 million in revenue, an 11.0% increase.
These figures underscore Pakistan’s growing importance to VEON’s overall revenue mix, accounting for 39.9% of the group’s total revenue. Ukraine remains a significant contributor at 26.9%, followed by Kazakhstan at 17.6%.
Telecommunications and infrastructure revenue saw a solid increase of 9.2%, reaching $952 million. This segment also exhibited strong growth across most markets, with Pakistan leading at 17.6%, followed by Ukraine (8.3%), Kazakhstan (6.3%), and Uzbekistan (9.5%). Bangladesh was the sole market to experience a decline in this segment, with a 1.5% decrease.
For the first nine months of 2026, VEON’s group revenue climbed 17.1% to $3.779 billion, with telecom and infrastructure revenue rising 8.1% to $2.779 billion. These figures reinforce the overall positive trajectory of the company’s financial performance.
Subscriber Growth and the Power of Multiplay Services
VEON’s telecommunications subscriber base reached 152.3 million as of September 30, 2026, reflecting a steady 1.9% annual growth and a 0.5% sequential increase. The company continues to hold leading market positions in three of its five operating countries, a testament to its strong brand presence and customer loyalty.
The group’s digital services customer base has seen even more dynamic growth, expanding by 8.2% to 221.1 million. This includes a significant 63.9 million digital-only customers, highlighting the increasing demand for specialized digital offerings.
A key driver of VEON’s success and customer loyalty is its "multiplay" strategy, which bundles telecommunications services with a suite of digital applications. The company reported that customers utilizing a combination of telecommunications and digital services generate significantly higher average revenue per user (ARPU) than voice-only subscribers. In Q3 2026, multiplay customers generated an ARPU 4.2 times higher than their voice-only counterparts.
The number of multiplay customers has steadily increased, reaching 44.7 million in Q3 2026, up from 43.5 million in Q3 2025 and a substantial jump from 35.3 million in Q3 2024. This growth is a direct result of VEON’s strategy of integrating 4G or 5G mobile connectivity with voice services and digital applications, thereby enhancing customer engagement and driving telecommunications revenue.
Furthermore, the multiplay strategy has a demonstrably positive impact on customer retention. VEON reported that multiplay customers exhibit a churn rate that is half that of voice-only subscribers. This lower churn rate, coupled with higher ARPU, underscores the strategic importance and profitability of the multiplay approach.
Ukraine Operations: Resilience Amidst Adversity
VEON’s operations in Ukraine, spearheaded by Kyivstar and Ukraine Tower Company, have shown remarkable resilience, generating $352 million in revenue during Q3 2026, a 17.4% increase in US dollar terms. In local currency, the revenue growth was even more substantial, with a 26.4% increase to UAH 15.713 billion.
Despite this revenue strength, the company’s capital expenditure in Ukraine saw a decline of 24.1% to UAH 3.229 billion. This reduction likely reflects the challenging operating environment, including potential regulatory restrictions and ongoing risks associated with the war. VEON continues to navigate operational uncertainties while prioritizing the continuity and development of its services in Ukraine.
Pressures from Energy Prices and EBITDA Margins
While revenue growth has been robust, VEON’s operating profitability has faced headwinds from macroeconomic conditions, most notably higher energy prices. The company reported that while group revenue grew 17.2%, its operating profitability was impacted by increased energy costs.
This pressure is reflected in the decline of the group’s EBITDA margin, which fell from 47% in Q3 2025 to 44.1% in Q3 2026, a reduction of 2.8 percentage points. The telecommunications and infrastructure segment experienced a more pronounced decline in its EBITDA margin, falling by 3.4 percentage points to 47.2%. This indicates that while the company is growing its top line, the cost of delivering its services has increased.
Digital Services: The Engine of Exponential Growth
VEON’s digital services segment continues to be the primary engine of its growth, with revenue surging by an impressive 45.9% to $355 million in Q3 2026. This substantial increase from $244 million in the prior year has propelled digital revenue to represent 27.2% of total group revenue, a significant leap of 5.4 percentage points.
For the first nine months of 2026, digital services revenue demonstrated even stronger performance, rising by 52% to $1 billion. This sustained growth underscores the increasing consumer and enterprise adoption of VEON’s digital offerings.
Within the digital services portfolio, Financial Services generated the largest absolute revenue contribution, amounting to $166 million, with a remarkable 54.2% annual growth. This is largely driven by successful platforms like JazzCash and Mobilink Bank in Pakistan, showcasing the company’s strength in the fintech space.
Digital Life also recorded outstanding revenue growth of 60.7%, reaching $123 million. This segment likely encompasses entertainment, media, and other lifestyle-focused digital applications, indicating a strong demand for engaging digital content and services.
Digital Enterprise revenue grew by 11.9% to $66 million, reflecting VEON’s expanding presence in enterprise technology services. This segment includes AI platforms, cloud infrastructure, enterprise software, and B2B solutions, indicating a strategic focus on the corporate sector.
AI Strategy: Powering Future Innovation
VEON is strategically expanding its artificial intelligence (AI) strategy, particularly through its Digital Enterprise business. This division is actively developing and deploying AI platforms, cloud infrastructure, AI factories, enterprise software, and B2B solutions. The Digital Enterprise segment generated $66 million in revenue during Q3 2026, with an 11.9% annual growth. For the first nine months of 2026, this segment’s revenue increased by 12.9% to $202 million.
The company’s commitment to AI is further evidenced by its partnership with Mastercard to scale AI-enabled financial services across its five operating markets. These AI initiatives are designed to bolster VEON’s enterprise technology offerings and expand its digital financial services, positioning the company at the forefront of technological innovation. VEON is clearly integrating cloud and AI infrastructure as a core component of its broader strategy to develop robust digital businesses alongside its traditional telecommunications operations.
Outlook for 2026: Continued Growth and Strategic Focus
VEON’s optimistic outlook for 2026 is reinforced by the upward revision of its revenue growth guidance. The company has increased the lower end of its 2026 revenue growth projection from 15% to 16%, while maintaining the upper end at 18%. This adjustment reflects the strong performance witnessed in the first nine months of the year and the continued expansion of its digital services.
The company has also revised its EBITDA growth outlook to 10%-12% from 9%-12%, signaling confidence in its ability to translate revenue growth into improved profitability, despite the pressures from increased operating costs. Crucially, VEON has maintained its capex intensity target of 15%-17% (excluding Ukraine), underscoring its commitment to disciplined capital allocation.
This revised outlook, driven by consistent revenue growth and the burgeoning success of its digital ventures, positions VEON for a strong finish to 2026. The company’s strategic investments in digital platforms, coupled with its robust telecommunications infrastructure, provide a solid foundation for sustained growth and market leadership in the years to come.
By Baburajan Kizhakedath
