ENABLING DEVELOPMENT THROUGH PLATFORMS

TOMAS LAMANAUSKAS – Group Director Public Policy 28/03/2017 ©VEON Ltd 2016 200+ MLN Customers $8,4BLN Revenues

65% 3G Coverage 13 2G: 94% Markets, HQ in

2 DATA USE IS EXPLODING

Monthly data traffic per device (in GB) 41

Monthly data traffic per region 20 (in GB) 14 22 9,7 8,5 5,8 18 2,6 1,4

Tablet Mobile PC Router Smarthpone 2015 2021 6,9 6,3 6,9 6 3,8 2 1,4 1,1 1 1,2 Mobile data traffic is expected to have Western Central and Middle East Pacific North Latin America increased sixfold by 2020 Eastern and America Europe 2015 2021 Source: Ericsson Mobility Report, 2016 3 DATA USE IS EXPLODING

We offer 4G in the majority of our markets

4 TRADITIONAL TELCO UNDER PRESSURE

Network usage vs revenue Return on Capital Employed – EU telecom market generation (in %) (in %)

21 20,7 20,6 18,9

15,6

12,7 10,9

2008 2009 2010 2011 2012 2013 2014

Source: EY, 2015 Source: FT, 2015 5 TRADITIONAL TELCO UNDER PRESSURE

Algeria Bangladesh Russia Ukraine

-44%

-5% -8% -43% -5%

2008 2016 2008 2016 2008 2016 2008 2016 2008 2016

Source: Analysis Mason, 2016. ARPU in USD 6 VALUE IS CAPTURED BY DIGITAL NATIVES

US Mobile Capex Invested in 2015 and share of peak Internet traffic

$30bn 296PB/yr

AT&T 30%

63% Others

Verizon 39%

Sprint T-Mobile 14% 37% Others Netflix Netflix 17% 0% Capex Share of Peak Spend Traffic

Source: Ycharts, MarketWatch, 2016 7 VALUE IS CAPTURED BY DIGITAL NATIVES

Market Capitalisation Growth in last 5 Years (US$, Dividends Excluded)

+$225bn +$286bn +$202bn +$155bn

+$18bn +$32bn -$9bn -$42bn

Telco = -$1bn Digital = +$868bn

8 WHO FACES THE CUSTOMER?

Google Apple Telco

9 MESSAGING BECOMING THE INTERFACE

Proportion of time spent communicating attributed to activities (Proportion of communicating time, %)

More time spent on chat than on Telco channels

10 FROM EMPLOYMENT TO PARTNERSHIPS

Number of employees/supply-side users

Apple 13,0

AirBnB 3,0

Largest employer Walmart 2,2 in the world

Uber 1,0

Randstad 0,6

Volkswagen 0,6

Sources: Bloomberg, 2017 11 EVOLUTION TO THE CONTEXTUAL INTERNET

Apps available in 80% of time is spent 2 Appstore and Playstore on using only three vs. 50,000 products in a 3 apps mln supermarket. 12 KEY ENABLERS: CONTENT

Source: WEF, 2015 13 KEY ENABLERS: DATA FLOWS

Global data flows account for approximately 3 percent of global GDP

90% of the world’s data has been generated in the last two years

40 Zettabytes (40 trillion GB) will have been created by 2020, compared to 4.4 in 2015

More than 1/3 of all data produced will live in or pass through the cloud by 2020

Source: McKinsey, 2016 14 KEY ENABLERS: BIG DATA ANALYTICS

Source: EY, 2016 15 KEY ENABLERS: DIGITAL FINANCE

Access to the global digital Ability to economy transact, save, borrow, insure . $2,1 trillion of loans to Secure electronic individuals and businesses account could be made sustainably

. $110 billion could be gained by governments each year by reducing leakage in public spending and tax collection

. 95 million jobs could be created in emerging economies within a decade as a result of inclusive growth

Source: McKinsey, 2016 16 OUR RESPONSE

17 18 EMPHASIS ON LOCAL CONTENT

Local 80%

Global 20%

19 EMPOWERING VERTICAL INDUSTRIES

mAgri mGov

mHealth mTransp

mRetail mEduc

20 POWERED BY MFS

MFS at VimpelCom

Mobile Financial Services (MFS) Digital Payments (DFS)

Payment Other Wallets Ecosystem Instruments Services Platform Payments

DCB Cards Merchants Insurance Top Up Money Bank accounts Corporate Financing 3rd party Tenants

Government

48 mln registered customers 21 ENABLING FINANCIAL INCLUSION

Unbanked population (% of 15+)

88% 87% . 2 billion people remain unbanked 82% 82% globally, of which 410 million within our footprint (which is 58% of the population) 69% 60% 59% 50% . 200 million MSMEs in emerging 47% 46% economies lack access to savings and credit 33%

. 80-90% cost savings could be realized 13% by service providers by shifting from traditional to digital accounts

Source: Global Findex, 2015; McKinsey, 2016 22 DATA: PRIVACY + VALUE

CUSTOMER INTIMACY & MARKETING WITH LIFETIME CUSTOMER VALUE TRUST PERSONALIZED ACTION

Companies that build trust Marketing alone (making promises) Lifetime Customer Value is will retain their customers does not build trust. Personalized improved by a segmented CVM longer than those that rely on action is required to demonstrate strategy that builds customer discounts to build pseudo- ability, consistency, sincerity, caring, trust through action across the loyalty connection entire journey

23 CHALLENGE: DATA POLICY FRAMEWORKS

Countries with data protection laws “National and regional legal frameworks that protect data in the (in numbers) ever-expanding digital economy are often outdated, incompatible or missing” 60 > 0,7-1,1% GDP loss due to localization requirements

“Insufficient protection can create negative market effects by 108 reducing consumer confidence, and overly stringent protection can unduly restrict businesses, with adverse economic effects as a result” 35

> 40-60% cost increase faced by local SMEs due to localization rules No legislation Draft legistlation Legislation

Source: UNCTAD, 2016 24 PARTNERS ARE KEY TO SUCCESS

Create local impact Educational Events & Business and growth support Competitions support

Benefit from positive branding

Accelerate pioneering Empowered Startups & SMEs culture

Unlock new services & markets VEON Business Strategic Investments Generate financial partnerships acquisitions returns

25 MAKE YOUR MARK

Eurasia Mobile Challenge The Eurasia Mobile Challenge is a digital solution competition for young entrepreneurs. This year almost 1,000 people participated. Incubators & accelerators We have launched incubators and accelerators in several The goal of MYM is to empower young markets including Algeria, Bangladesh, Italy and Pakistan – people to make a positive difference, also in partnership with governments – to support through increased access to education entrepreneurs having a positive impact on their socio- and through inspiring social economic environment. entrepreneurship, particularly in the digital arena. GSMA accelerator partnership Last year we joined the project leadership group for the GSMA ecosystem accelerator, which aims to scale Learn more: innovative and sustainable mobile services in emerging http://www.vimpelcom.com/Responsibility/Make-your-mark/ markets through partnerships between operators and innovators.

26 TOMAS LAMANAUSKAS Group Director Public Policy tomas.lamanauskas@.com THANK YOU!

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