VEON extends decentralized strategy to CTO role

Emerging-markets operator has appointed CTOs at individual country level to drive market-specific digital strategies.

Anne Morris, Contributing Editor, Light Reading

November 5, 2020

6 Min Read
VEON extends decentralized strategy to CTO role

VEON, the emerging-markets operator that counts Russia as its biggest market, confirmed that former chief technology officer (CTO) Yogesh Malik left as part of the group approach to delegate decisions about new digital and technology strategies to its individual operating companies (opcos).

While VEON did not officially announce his departure, Malik's LinkedIn profile indicates that he finished in June this year, after a six-year stint as the operator's technology boss.

Rather than replacing him at group level, the CTO function was pushed out to the opco level to "empower" individual markets on technology matters, including procurement and vendor selection.

Figure 1: In a big country: Veon says they have 212 million subscribers across ten markets from Algeria to Pakistan, the biggest being Russia. (Source: Nikita Karimov on Unsplash) In a big country: Veon says they have 212 million subscribers across ten markets from Algeria to Pakistan, the biggest being Russia.
(Source: Nikita Karimov on Unsplash)

Sergi Herrero, co-CEO of VEON, said Malik played a key role in putting this transition in place. Now, CTOs have been appointed at the nine opcos that will remain after the planned sale of VEON's Armenian business.

VEON had already recognized that its "one-size-fits-all" approach to the regional opcos was not the best way to go in terms of determining local digital strategies. It now allows the country operations to set their own agenda based on their better understanding of the local market.

"It's been a very positive experience," said Herrero, who stressed that the CTOs collaborate closely with each other and share views and experiences.

New ventures

Of course, Herrero and co-CEO Kaan Terzioğlu will be keeping a close eye on developments at local level, and some strategies will still filter down from central management.

The remit of Herrero, who joined VEON from Facebook, is to focus on services beyond traditional connectivity offerings.

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For example, central investment function VEON Ventures forms an important part of the overall group strategy. The aim of the fund is to identify, nurture and grow services and businesses with a focus on financial services, digital content and adtech.

This strategy recently saw VEON investing in ShopUp, a business-to-business e-commerce platform in Bangladesh. It is also building up an adtech business in Russia, and operates the JazzCash digital payments platform in Pakistan.

In terms of wider group strategies, Herrero indicated that other opcos similar in size to the Armenian business could be sold off in future, although he stressed that no decisions are imminent.

The group regularly assesses its portfolio, and intends to focus on core markets that can "move the needle" for VEON's share price, for example.

VEON is also still focusing on 4G for now, and noted that 5G is not likely to be rolled out in its markets for the next two to three years.

"Our strategy is to have a very strong 4G network, and ensure diversity with vendors," Herreo said.

Of course, it's difficult to have any business discussion without mentioning the COVID-19 pandemic. VEON has certainly suffered from the effects of the related lockdowns this year, although it showed some signs of recovery in the recent third quarter.

Herrero reckons that the group is now well positioned to handle the second wave of the health crisis, particularly as it has now improved digital top-up services that allow subscribers to add credit via self-care apps.

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— Anne Morris, contributing editor, special to Light Reading

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About the Author(s)

Anne Morris

Contributing Editor, Light Reading

Anne Morris is a freelance journalist, editor and translator. She has been working in the telecommunications sector since 1996, when she joined the London-based team of Communications Week International as copy editor. Over the years she held the editor position at Total Telecom Online and Total Tele-com Magazine, eventually leaving to go freelance in 2010. Now living in France, she writes for a number of titles and also provides research work for analyst companies.

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