VEON, a global digital operator serving emerging markets, recently released its Q1 2024 earnings transcript (link to transcript). While the surface numbers paint a picture of robust growth, a deeper dive reveals a subtle, yet potentially seismic shift within the company's revenue streams. A shift that, surprisingly, seems to have slipped past the radar of most analysts.

VEON's transcript boasts a 6.6% year-over-year growth in US dollar revenue. This figure, while impressive, is actually dampened by a significant cyberattack on Kyivstar, VEON's Ukrainian operation. Excluding Ukraine, the organic US dollar revenue growth across all operations jumps to a staggering 15%. The picture becomes even more compelling when we examine local currency growth, which, excluding Ukraine, accelerates to 20.5%.

These numbers undoubtedly solidify VEON's standing as a telecom leader in emerging markets. But the real story lies in the _source_ of this growth. A closer look reveals that VEON's digital platforms, particularly in entertainment and mobile financial services, are increasingly driving revenue growth, potentially eclipsing their traditional telecom roots.

The transcript highlights the remarkable growth of "Multiplay" users, subscribers who utilize both 4G connectivity and VEON's digital products. In Q1 2024, Multiplay revenue constituted a significant 49% of VEON's consumer revenue, a 36% year-on-year surge.

This isn't just about additional services; it's about a fundamental change in user behavior and spending patterns. Multiplay users, as the transcript emphasizes, exhibit higher data consumption, lower churn rates, and generate significantly higher ARPU (Average Revenue Per User) compared to single-play voice users. In some markets, Multiplay ARPU is up to 47% higher.

Across VEON's portfolio, the story repeats itself. In Pakistan, Jazz's Multiplay customers generate 57% of its revenue, an 11.5 percentage point year-on-year increase. In Kazakhstan, 42% of active Beeline users are Multiplay subscribers, generating a whopping 60% of subscriber revenues. Banglalink customers in Bangladesh who also use Toffee, the entertainment platform, generate three times more ARPU than voice-only customers.

The implications of this shift are profound. VEON's digital platforms, once seen as ancillary services, are rapidly evolving into primary revenue drivers. This transition could potentially redefine VEON's identity, shifting it from a traditional telecom operator to a multifaceted digital powerhouse.

VEON's Digital Revenue Growth: A Potential Tsunami?

Here's the potential hypothesis: VEON's digital revenue is poised for exponential growth, fueled by factors such as increasing smartphone penetration, the burgeoning demand for digital services in emerging markets, and the company's aggressive digital operator strategy. This growth could ultimately surpass traditional telecom revenue, making VEON a digital-first company.

The numbers offer tantalizing support for this hypothesis. VEON's digital flywheel is already reaching over 111 million customers, approaching two-thirds of its traditional telecom subscriber base. Furthermore, over 20 million _non-telecom subscribers_ are now using VEON's digital offerings, highlighting the platforms' independent appeal.

VEON's mobile financial services, particularly in Pakistan, are demonstrating explosive growth. JazzCash's revenue surged 89% year-on-year, driven by a staggering 47% increase in gross transaction value, reaching PKR 6.6 trillion (approximately $24 billion). This represents a remarkable 7% of Pakistan's GDP, underlining the scale and influence of VEON's digital financial services.

The entertainment platforms are telling a similar story. Tamasha, Pakistan's leading entertainment platform, saw a remarkable 2.1 times increase in monthly active users, reaching 12 million. User sessions surged even higher, increasing 2.5 times year-on-year.

Growth of Multiplay Users and ARPU

These figures suggest that VEON is not just building successful digital platforms; it's cultivating a new breed of user – the Multiplay subscriber. These users are deeply engaged with VEON's digital ecosystem, spending more, churning less, and driving revenue growth. This fundamental shift in user behavior could usher in a new era for VEON, one defined by digital dominance.

While the Q1 2024 transcript doesn't explicitly articulate this impending digital tsunami, the signs are unmistakable. VEON's digital platforms are no longer supporting actors; they are rapidly taking center stage, poised to rewrite the company's revenue script. It's a subtle whisper in the current transcript, but one that could soon become a deafening roar.

"Fun Fact: VEON's JazzCash in Pakistan is now processing more mobile financial transactions daily than Mastercard and Visa _combined_ in the country. This underscores the immense scale and potential of VEON's digital financial services in emerging markets."