Kyivstar, Ukraine’s largest mobile operator, intends to invest up to $10 million in creating an ecosystem of services for patients in the healthcare sector based on Helsi (Healthy Ukraine LLC).
“Our focus is on the development of digital services based on the telecom service we provide to our customers. A good example is our investment in Helsi. We invested in a small company, which at the first stage was an information system for medical institutions and patients. What are we doing now? We are investing to build an ecosystem of healthcare services for patients based on this connection. The investment in Helsi is up to $10 million,” said the president of Kyivstar.
He specified that the funding will be allocated as part of a total investment of about $600 million from the parent company VEON.
According to Komarov, the company is actively developing telemedicine services, which were used by more than 1.1 million people in the first half of 2023. In the near future, it is planned to launch functionality that will allow patients to track test results in the app and sign up for seasonal vaccinations.
Earlier it was reported that Kyivstar invested $3 million in the company’s development after purchasing a controlling stake in Helsi (Healthy Ukraine LLC) in August 2022.
Helsi is a medical information system and a leading digital healthcare provider, known as a provider of SaaS medical information system solutions for 1.3 thousand public and private clinics. “Kyivstar acquired 69.99% in August last year for UAH 555.74 million.
The number of employees has almost doubled to 240 over the past year. In the second quarter of 2023, Helsi increased the number of registered users to 25.4 million patients, up from 25 million a quarter earlier.
As of mid-October 2023, the number of active unique users in the app increased to 1.1 million, and including the web version – to more than 2 million Ukrainians, which is equal to the pre-war figures.
Since the beginning of the year, Helsi has introduced new services: urgent medical consultations, online chat with a doctor and exchange of medical documents, search for doctors and medical facilities nearby, vaccination calendar, and medical certificate service.
Ukraine’s largest mobile operator Kyivstar has invested $3 million in the development of Helsi (Healthy Ukraine LLC) after buying a controlling stake in August 2022, Kyivstar President Oleksandr Komarov said at the Kyiv International Economic Forum.
“Over the year that we have owned (Helsi), we have invested $3 million in the development of this player. The team has grown 2.5 times,” Komarov said.
According to him, the number of telemedicine consultations doubled in 2023.
Helsi is a medical information system and a leading digital healthcare provider in Ukraine with more than 23 million patients and is known as a provider of SaaS medical information system solutions for 1300 public and private clinics. “Kyivstar acquired a 69.99% stake in August last year for UAH 555.74 million.
According to Kyivstar’s report for the second quarter of 2023, Helsi increased the number of registered users to 25.4 million patients, compared to more than 25 million a quarter earlier.
The number of downloads of the Helsi mobile application increased by 0.4 million to 5.4 million in the second quarter, while the number of bookings of doctor’s appointments through the platform remained at approximately 1.8 million for the quarter.
Global digital communications operator VEON (office in the Netherlands) announced the completion of its exit from Russia and the sale of its Russian asset to Vimpelcom. The terms of the deal do not provide for the possibility of repurchase, i.e. the completion of operations in the Russian market is complete and final for VEON
As Kyivstar President Alexander Komarov comments, “after a long series of legal procedures, our 100% shareholder VEON puts an end to its relationship with the Russian telecom market. This will mean strengthening the company’s development strategy in six other markets, including Ukraine”. In particular, in the next three years, VEON plans to invest 600 million dollars in Ukraine, which will be used to restore the telecom network and develop digital services and new mobile technologies.
Oleksandr Komarov emphasized that Kyivstar has been operating as usual, and since the beginning of Russia’s full-scale invasion has already invested UAH 8.2 billion in the development of the country’s telecom market, paid UAH 15.2 billion in taxes to the state, and provided support to state bodies, military, security and law enforcement agencies in the amount of more than UAH 1.4 billion, including bonuses and services without additional payment in the amount of UAH 577 million.
In addition, Kyivstar is now preparing the network to operate in conditions of possible power outages, for which it has invested UAH 988 mln. By the end of 2023, 110 thousand new batteries will be installed at Kyivstar’s base stations.
Background on Kyivstar
Kyivstar is Ukraine’s largest electronic communications operator, serving 24.1 million mobile subscribers and over 1.1 million Home Internet subscribers as of June 2023. The company provides services using a wide range of mobile and fixed technologies, including 4G, Big Data, Cloud solutions, services for cyber defense, digital TV, and others. Kyivstar helps subscribers, society and the country to overcome the difficulties of wartime. Since the beginning of the full-scale war, the company has allocated more than UAH 1.4 billion of assistance to the state, military, society and subscribers. The only shareholder of Kyivstar is the international VEON Group. The Group’s shares are freely traded on the NASDAQ (New York) and Euronext (Amsterdam) stock exchanges. Kyivstar has been operating in Ukraine for over 25 years and is recognized as the largest taxpayer in the telecom market, the best employer and a socially responsible company.
Investments of Ukraine’s largest mobile operator Kyivstar in energy independence amounted to UAH 920 million for the entire period of the full-scale invasion of the Russian Federation, the company’s press service said.
“The national telecom operator prepares in advance for possible winter blackouts and provides the telecom network with diesel generators, long-lasting batteries, uninterruptible power supplies. Since the beginning of the full-scale war Kyivstar has invested UAH 920 mln in energy independence of telecom networks,” the press release says.
In particular, Kyivstar has allocated more than UAH 680 mln for autonomous operation of mobile communications, and for Home Internet – UAH 240 mln.
The company uses more than 2.5 thousand stationary and mobile diesel generators, thanks to which all key base stations, switches and critical telecom equipment have backup power. The base stations are equipped with 37 thousand new long-life batteries, which can operate without external power supply for 4-6 hours.
“Kyivstar plans to install 50 thousand uninterruptible power supply units by the end of the year, which will allow to achieve autonomy of 70% of fixed Internet networks in case of power outages.
The company is also developing energy-efficient GPON technology.
“Development of “Home Internet” network with the use of GPON technology is planned in the fourth quarter of 2023″, – specified in the press service of the company.
Kyivstar communication services are currently used by 24 million subscribers, “Home Internet” services – more than 1 million subscribers.
Ukraine’s largest mobile operator Kyivstar increased its UAH revenue by 16.8% in the second quarter of 2023 compared to the same period of 2022 – to UAH 8.609 billion (in dollars it decreased by 6.5% – to $235 million), according to the report of its parent company VEON on Thursday.
According to it, Kyivstar’s EBITDA profit in hryvnia increased by 11.6% to UAH 5.085 billion (down 10.7% to $139 million in dollars) compared to the same period last year, while its EBITDA margin decreased by 2.9 percentage points (p.p.) to 59%.
“Despite the challenging operating environment, Kyivstar’s revenue and EBITDA growth accelerated in the reporting quarter. “Kyivstar and VEON have committed $600 mln over the next three years, investing in rebuilding Ukrainian infrastructure through communication and digital services,” the report says.
It is specified that revenues from mobile services grew by 17.1% y-o-y to UAH 8.066 billion thanks to the growth of data consumption by 25.6% to 9.9 GB per user per month, (in money the growth amounted to 17.6% to UAH 4.679 billion) compared to the same period last year and the increase in roaming.
As for EBITDA, VEON notes the impact of a 33% YoY increase in electricity tariffs, UAH 92 mln of charitable donations, and staff and customer support programs in the second quarter of 2023. As a result, these operating expenses reduced the company’s EBITDA margin by 2.7 p.p. – to 59.1%.
It is pointed out that the number of Kyivstar 4G users reached 13.1 million (+13.5% year-on-year) and now accounts for 54.3% of the total subscriber base (+7.7 p.p. year-on-year).
“The growth in the number of 4G users combined with new value propositions ensured a 22.6% increase in ARPU – to UAH 110.2 – year-on-year,” the report said.
At the same time, Kyivstar’s overall mobile subscriber base decreased by 2.6% year-on-year to 24.1 million, as it continued to be affected by the number of Ukrainians living outside of Ukraine.
It is noted that Kyivstar supported access to key services, including digital health, information and entertainment services. The number of Kyivstar’s multi-user subscribers increased by +37.8% year-on-year, while multi-user revenues grew by 51.7% year-on-year.
According to the report, Kyivstar-controlled Helsi Ukraine, the country’s largest digital health platform, increased the number of registered users to 25.4 million patients, up from more than 25 million a quarter earlier.
The number of downloads of the Helsi mobile application increased by 0.4 million to 5.4 million in the second quarter, while the number of medical appointment bookings through the platform remained at around 1.8 million for the quarter.
It is indicated that Kyivstar TV’s streaming service ended the quarter with nearly 1.1 million users, representing a +35.0% year-on-year growth. In Q2 2023, 2,500 Kyivstar TV customers enjoyed the recently introduced ‘Kids Profile’, a special portfolio of content for children, while around 11,600 customers enjoyed educational content available on the platform for free.
However, overall, the number of fixed-line customers decreased by 4.5% to 1.1 million over the year, while revenue growth in the sector amounted to 7.5% to UAH 483 million.
It is noted that in accordance with the strategy “4G everywhere” in the second quarter of 2023, Kyivstar connected 80 more settlements to its 4G network, added about 270 new 4G base stations and upgraded almost 1,600 more base stations to 4G standard. Capital expenditures increased by 35.1% year-on-year to UAH 1.395 billion. As of the end of June, the Kyivstar team was maintaining almost 94% of the radio network.
According to the report, in total for the first half of 2023, Kyivstar’s revenue in UAH increased by 11.2% to UAH 16.956 billion, EBITDA by 6.2% to UAH 10.006 billion, and capital investments by 28.6% to UAH 2.176 billion.
Including in the mobile segment, revenue growth amounted to 11.7%, to UAH 15.897 billion (of which data transmission – by 10.2%, to UAH 9.15 billion), while in fixed-line communications – only 1.5%, to UAH 946 million.
“Kyivstar is Ukraine’s largest telecommunications operator. It provides communication and data transmission services based on a wide range of mobile and fixed technologies.
Overall, VEON’s revenue in Q2 decreased by 4.3% y-o-y to $916 mln, while EBITDA fell by 10.6% to $415 mln.
The president of Kyivstar, the market’s largest mobile operator, Oleksandr Komarov, expects the sector to grow in 2023 due to continued demand for modern communication services, the effect of a low base and de-occupation, but this growth will be relatively small due to a decline in the active subscriber base and a reduction in profitability.
“The main factor of any market is its capacity in terms of the number of consumers. We see it stabilizing around the level of about 10% of the active base that was before the war. Geographically, we have stabilized. Moreover, I expect that there will be some de-occupation, and we will be able to grow at the expense of the returned territories,” he said in an interview with Interfax-Ukraine.
Komarov added that the first quarter of 2022 was still “more or less normal,” but in the following months the market began to decline.
“That is, I think that the industry will recover a bit in the second, third, and fourth quarters: not only because it is growing, but also because the comparison bases have fallen significantly,” the Kyivstar president explained his expectations.
He also noted that communication services are critical services for consumers, and therefore demand for them is not elastic. “Moreover, the crisis encourages people to spend more on telecommunications: people want to reserve their ability to stay in touch. During the blackouts, we had an incredible growth of new connections across the Ukrainian telecom market,” Komarov said.
Kyivstar’s president also pointed to the continued demand for more modern communication services, naming LTE and 4G services as the key drivers, which had been driving the market growth of 15% annually in the last three years before the war.
“In 2022, the market grew by 5%, while LTE consumption grew by almost 30% year-on-year, with the LTE customer base increasing by only 4%. That is, consumption is the main driver that continues to pull this market upwards: people need more mobile Internet,” stated the head of the largest mobile operator.
Among the factors that will negatively affect revenues, he pointed to the ongoing decline in the active roaming subscriber base due to the protracted war. According to him, it is slow because it is restrained by the “roaming like at home” service.
Komarov emphasized that this service and a number of other factors have led to a significant increase in the company’s expenses, which has put pressure on profits and reduced profitability.
“In the first quarter, Kyivstar’s total revenue in hryvnia grew by 6% year-on-year, while profit grew by only 1%, and overall profitability decreased to 59% from 62% in 2022,” the company’s president said.
Among the factors, he named an increase in the share of negative or very low-margin income, such as roaming, rising risk costs, restoration costs, and social assistance. In particular, Komarov said, Kyivstar provided financial charity and bonus services worth UAH 1.08 billion over the 15 months of the war.
“Of course, it is also inflation: cost inflation, electricity inflation, wage inflation, etc.”, added the CEO.
Komarov noted that Kyivstar’s investments and expenditures are largely made in foreign currency, and the devaluation of the hryvnia has led to a year-on-year decline in purchasing or investment power in foreign currency of 8%.
“As a company that is integrated into domestic consumption on the one hand and purchasing equipment from international suppliers on the other, we have to understand that the pre-war formula of average industry profitability will not work for the next few years. We will face significant pressure on profitability,” stated the head of the largest mobile operator.
He also said that it would be impossible to raise telecom tariffs to the extent necessary to compensate for the increase in costs.
According to him, certain inflationary elements are built into pricing. In addition, customers follow their consumption by switching from old tariff plans to new ones. On average, there are up to 100 thousand such migrations per month, Komarov said.
As reported earlier, Kyivstar increased its hryvnia revenue by 6% in the first quarter of 2023 (down 17.2% in dollars) compared to the same period in 2022, to UAH 8.346 billion. EBITDA increased by 1% in UAH (down 21.2% in USD) year-on-year to UAH 4.921 billion.
The subscriber base in the first quarter of 2023 amounted to 24.3 million, down 6.7% year-on-year, while the number of 4G users increased by 4.2%, or 600 thousand, to 13.3 million, and 4G penetration in the subscriber base reached 54.6%.
