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.
After almost a year of the war unleashed by Russia against Ukraine, only 9% of nearly 1.5 thousand global companies have left the Russian market, according to Mikhail Podolyak, advisor to the head of the Presidential Office.
“Among the Western companies left to work in Russia, the largest share is German (19.5%), 12.4% – American, 7% – Japanese In particular, remained to work in the terrorist state: METRO, Leroy Merlin, Auchan, Nestle, Unilever, Procter & Gamble, Siemens, Pfizer, Philip Morris, Bayer, Acer, Alibaba, CloudFlare, Societe Generale, Credit Suisse, Lenovo, Asus, Cersanit and the like,” Podolyak wrote in Telegram Saturday.
He said some Western banks “made super profits in Russia in a year of full-scale war at all.” “Raiffeisen increased profits in Russia by 313%. For 2022, the profit of the Russian branch was 474 million euros, and this is the largest amount among branches in Southeastern Europe,” Podolyak said.
Raiffeisen, according to his words, for the last financial year has replenished the Russian treasury with 94.8 million euros only for profit tax. “The amount of other fees is much more. That is, it is a tax on the war, on the killing of Ukrainians. Moreover, Raiffeisen recognized the pseudo-republican “L(D)NR”, offering credit vacations to the partially mobilized. Its example was followed by Citibank, Credit Europe Bank and OTP Bank”, – writes Podolyak.
He also notes that the NAPC has recently recognized the American corporation as an international sponsor of the war. The company owns such subsidiaries and brands as Gillette, Fairy, Tide, Ariel, Lenor, Mr. Proper, Pampers, Always, Head & Shoulders, Pantene, Old Spice, Hugo Boss, Max Factor, etc.
“Not only have they not withdrawn from the Russian market, but they continue to operate the Household Chemistry Combine, which is the world’s largest producer of detergents for P&G, and the Gillette blade and shaving machine factory,” Podolyak stressed.
Operating in Russia, international companies pay taxes to the Russian state budget used for the production of defense-industrial complex. The total annual revenue of these 1200+ companies in Russia is almost $290 billion, which is one fifth of Russia’s GDP, the advisor of the head of the Office of the President of Ukraine notes.
As Podolyak notes, the companies also contribute to mobilization measures in Russia. Under new Russian law, corporations operating in Russia are forced to help draft employees into the military and fund their military equipment.
“Not withdrawing from the Russian market in a year of full-scale war is not an accident, but a conscious position… And the collective West, whose market is a higher priority for international companies than Russia, must show a firm stance,” Podolyak summed up.
Another 580 foreign companies remain to work in the Russian market and do business there “as usual”, while they left Russia or stopped operations there 1,439 thousand. international companies from 70 countries and 55 different industries, said Minister of Foreign Affairs of Ukraine Dmitry Kuleba.
“Currently, there are 580 more companies on the Foreign Ministry’s radar, which continue the so-called business as usual from Russia, that is, they pretend that nothing has happened,” he said on Instagram on Monday.
The Minister added that the Ministry of Foreign Affairs has sent to eight of the largest international corporations to stop working in Russia, these are system players in the Russian market. Without receiving a reaction, the ministry intends to continue working with them in another plane.
“We can’t order them to leave. But we need to work from different sides,” Kuleba said.
INTERNATIONAL COMPANIES, RUSSIAN MARKET, UKRAINIAN FOREIGN MINISTER
