Nik Kershaw: Good morning, and good afternoon, ladies and gentlemen, and welcome to VEON's Fourth Quarter and Full Year Results Presentation for the period ended 31 December 2022. Nik Kershaw here, Group Director of Investor Relations. I'm pleased to be joined today by Kaan Terzioglu, our Group CEO; along with our group CFO, Serkan Okandan, and together we'll take you through the results presentation.
We also have our incoming CFO Joop Brakenhoff with us on the call. Today's presentation will begin with an operational overview of our fourth quarter results from Kaan followed by the financial review from Serkan.

We will then hand it back to Kaan to discuss our outlook for the balance of the year. We will ensure that there's time for your questions and we would ask you to submit these through the questions on [indiscernible].
Before getting started, I would like to remind you that we may make forward-looking statements during today's presentation, which involve certain risks and uncertainties. These statements relate in part to the company's anticipated performance and guidance for 2023, future market developments and trends, operational and network development and network investments and the company's ability to realize its targets and commercial and strategic initiatives, including current and future transactions.
Certain factors may cause actual results to differ materially from those in the forward-looking statements including the risks detailed in the company's annual report on Form 20-F and other recent public filings made by the company with the SEC.

The earnings release [indiscernible] presentation, each of which include reconciliations of non-IFRS financial measures presented today, can be downloaded from our website. With that, let me hand over to Kaan.

Muhterem Terzioglu: Well said, Nik, thank you. Good morning and good afternoon to all, and welcome to the presentation of our fourth quarter and full year results for 2022. From this announcement onwards, you will see a different view on with our Russia business now classified as asset held for sale and discontinued operations, our group, while smaller in size will not only have a higher growth rate in both financial and operational metrics, but also the sale of Russia will result in the significant deleveraging of the group balance sheet.

This comes with significant growth opportunities that we are excited to see, working diligently to meet the demand in our markets. As we will share with you in greater detail over the next hour, our teams delivered 2022 priorities despite various macro and geopolitical challenges.
In the fourth quarter, we have strengthened our position further and accelerated our growth, positioning us as we start 2023. For this, I would like to thank all of our teams and especially our colleagues at Kyivstar in Ukraine for serving our customers with essential connectivity and increasingly relevant digital services. I would also like to thank our leadership team who are joining me on the call today and especially to our group CFO, Serkan Okandan who will pass his CFO duties to our Group Chief Internal Audit and Compliance Officer, Joop Brackenhoff on May 1.

Allow me to thank Serkan for a very successful 3 years and continuing to serve VEON in an advisory capacity and cordially welcome Joop to his new position.
With that, let me turn to review our performance. Let's start with a snapshot of fourth quarter. In the quarter, VEON accelerated local currency revenue and EBITDA growth and continued to gain market share in each of its markets. Our top line growth in local currency for Q4 was 18.6%.

This is double the growth rate that we achieved in Q4 '21, excluding Russia.
Five of our countries reported a double-digit increase in revenues in local currency and Ukraine revenues grew by 8.7% year-on-year, a strong performance given the unique set of challenges in the country.
Service revenues for the group were up by 19.2% year-on-year in local currency. Group EBITDA for Q4 was up 30.1% and the group EBITDA margin was 48.2%, which is 2.9 percentage points higher. In the fourth quarter, year-on-year revenue and EBITDA performance was impacted by several extraordinary nonrecurring items.

Excluding these, group total revenue increased by 15.4%, service revenues increased by 15.8% and EBITDA increased by 7.4% year-on-year.
Higher 4G penetration, higher relevance of our digital operating offerings in line with our new 1440 strategy, fair pricing for the true value we deliver and good cost management has enabled us to deliver growth despite macroeconomic headwinds.
In Q4, we did not shy away from investments where we saw the growth potential. Group CapEx was $263 million, with continued investment in 4G, most notably in Ukraine, Bangladesh and Uzbekistan. CapEx intensity stood at 22.1%, with a marginal increase of 1.1 percentage points.

As a group, we maintain a healthy cash position. We closed the fourth quarter with total cash of $3 billion, including $2.5 billion at headquarters held in international Tier 1 U.S. and European banks. All local country operations remained largely self-funding.
Before we dive into the details of our performance, let me recap the development around the sale of our Russian operations.

On November 24, we announced that following a competitive process, VEON has entered into an agreement to sell its Russian operations to certain members of the Beeline Russia management team at an enterprise value of approximately $5 billion as of December 2022.
On February 7, the Russian regulators issued its approval of the proposed sale. In line with our previous communications, we anticipate that the remaining closing conditions will be satisfied and the transaction will complete on or before first of June 2023. The removal of the Russian operations from VEON's reported financial and operational performance, reduces the group's revenue and EBITDA in absolute terms. However, without the Russian business, VEON has a healthier balance sheet and is a faster-growing company with greater room for growth in 6 emerging markets.

VEON's pro forma leverage ratio, including the incremental approximate $1.8 billion of debt extinguishment from the sale of Russia will reduce materially. As we on management, we continue to believe that the proposed sale represents the optimal solution for all stakeholders, including shareholders, employees, creditors, and most importantly, our customers and the group will be well positioned for faster growth with a strong balance sheet after the completion of the transaction.
We are also pleased that Beeline Russia will be a sustainable company on a stand-alone basis, continuing to serve its customers with quality services in the future.
Now please move on to the details of our operational performance. As of the end of Q4, our operating companies served 157 million customers with 4.2 million more subscribers year-on-year.

While expanding the base, we have also increased ARPU across all our markets, ranging from 5% to 22% year-on-year. In 2022, we added 14 million 4G customers and 4G subscribers now account for 54% of our total subscriber base, up 7.5 percentage points from a year earlier.
Supported by more 4G users in our base and their higher ARPU levels, VEON's underlying data and digital revenues, excluding Ukraine, rose 25% year-on-year in local currency terms. As previously stated, our target 4G penetration level for the book is 70%. The continued investment in 4G is an important enabler of this growth and our digital operator strategy, which I will explain to you on the next slide.

In quarter 4, NEON companies continue to successfully execute our Digital Operator 1440 model, leading to market share and [ role ] share gains in each of our operations. Multiplay subscribers who consume at least one of our digital services on top of 4G data and voice increased 40% year-on-year and reached 28 million.
In the fourth quarter, ARPU of Multiplay customers was 3.6x the ARPU of voice only users, while their churn was just 40% of what we saw with voice only users. With higher ARPU and lower churn, these customers account for 22% of NEON's total subscriber base and delivered 39% of our subscriber revenues.
I'm also happy to note that our digital operator 1440 model, successfully implemented across our operations, was recognized as the best mobile service for connected consumers at Mobile World Congress in Barcelona.

Now let's look into the performance of our operations, starting with a few of the key financials for each one of them. In the final quarter of 2022, our market -- in our markets, service revenues grew 19.2% year-on-year with a growth range of 15% to 30% in 5 of our countries and almost 9% in Ukraine. This was driven by a larger subscriber base, higher 4G penetration, increased engagement with our digital applications, disciplined inflationary pricing, resulting in higher ARPU and greater share of volumes.
On this slide, I want to cover the same metrics but for the full year. In 2022, each of our operations achieved significant growth both in terms of financial performance and operational metrics.

You will note that the same 5 operations are double-digit growth companies, not only in the fourth quarter but also for the full year. The growth range is from 12% to 25% for the full year.
The fourth quarter performance in the previous slide is, in fact, an acceleration of growth for all of our operations. Let me explain the one-off impacts on EBITDA, which might have caught your attention. Kyivstar continues to support its employees and the community at large with charitable donations and the staff care program impacting full year EBITDA by almost 1 billion Ukrainian hryvnia.

Normalized for these impacts, full year EBITDA would have grown by 1%. Bangladesh EBITDA was negatively impacted by 1.3 billion Taka of minimum tax paid on gross revenue. Normalized for this, Bangladesh EBITDA would have seen 4% year-on-year growth.
The Kyrgyzstan EBITDA was also impacted by one-off items in 2021. Normalized for this, Beeline in Kyrgyzstan local currency EBITDA would have increased 19% year-on-year.

Now I want to take you through individual performance for each of our major markets, and we'll start with Ukraine. We have lost 3 colleagues over the last 12 months in Ukraine, and I would like to start by acknowledging their service to our customers. Our team in Ukraine continues to do a tremendous job keeping Ukrainians connected and putting the employees safety first. Nearly 90% of Kyivstar's radio network sites were operational at the end of December.
In Q4, Kyivstar agreed with international partners to extend roam-like home offers through the end of 2023, keeping Ukraine Kyivstar customers connected to Ukraine.

In 2022, 7.3 million unique Kyivstar subscribers benefited from roaming services. We would like to thank all our partners, our competitors and industry associations for their continued support.
Inside Ukraine, national roaming and infrastructure sharing continued, ensuring maximum coverage for Ukrainians and Kyivstar as the market leader continued to join forces with its competition to serve customers better. I am delighted to see this kind of cooperation in our industry when customers need it the most. With a focus on establishing connectivity and enabling high-quality mobile Internet as likely as possible, Kyivstar continues to invest in 4G infrastructure.

Kyivstar 4G customer base grew by 1 million subscribers over the year, and it accounts 53% of our subscriber base now. This allows us to help Ukrainians maintain access to essential services with digital health care, infotainment and education services inside and outside Ukraine.
In August 2022, Kyivstar announced an investment in Helsi Ukraine, the country's largest medical information system and a leading digital health care provider. With 23 million registered users, Helsi enables access to 1,600 public and private medical institutions, 49,000 doctors. Helsi reported nearly 1.6 million appointments booked and conducted through the platform in Q4 only.

Kyivstar TV, where generated educational content is also available, reached 1.1 million monthly active users end of December. With its connectivity and digital offers, Kyivstar retained its leading Net Promoter Score position with the Net Promoter Score position improving year-on-year in Q4 as well. Kyivstar also delivered another solid results with revenue growth of almost 9% year-on-year. Given the current operating environment, including increased energy tariffs, exceptional costs due to our support to employees, community and charity programs, the change in the profile of our revenues as well, EBITDA was down 7.3%.
On Slide 13, we will look at our performance in Pakistan where Jazz continues to gain market share, cementing its leadership position.

Revenue growth was 24.3% year-on-year, including the positive one-off impact of a favorable decision from the Islamabad High Court on pending litigation allowing us to recognize revenues that were not properly recognized before. Normalized for this net recognition, total revenues were up 13.2% year-on-year and service revenues increased by 14% year-on-year. This was achieved despite the 5 percentage points increase in reporting tax and more than 40% reduction in mobile termination rates and all the other macroeconomic challenges.
Normalized EBITDA growth was 11.1%, a double-digit performance despite the increases in fuel and electricity, which were higher by around 71% and 53% year-on-year, respectively. The growth of Jazz was driven by a higher number of 4G users, which were up 18% year-on-year, representing 56% of the subscriber base.

With a heightened focus on its digital operator strategy, Jazz saw a 41% year-on-year increase in Multiplay customers who now account for 24% of the subscriber base and 44% of subscriber revenues.
We continue to link the digital financial services in the country with JazzCash and Mobilink Microfinance Bank. JazzCash reached 16.4 million monthly active users, enabling 2.1 billion transactions in 2022.
Mobilink Microfinance Bank, the youngest microfinance bank in Pakistan with the biggest customer base enabled it's 2.4 million clients to raise small business and other loans with a gross loan portfolio of PKR 46 billion. Every single day, we issued 40,000 microfinance loans to customers, which are up to PKR 10,000.

For Tamasha, the leading entertainment platform of the country, monthly active users increased 4.3 million. In December, total watch time increased by an impressive 9-fold year-on-year. In February, the key clients with cricket back on small screens, we are back to more than 5 million monthly active users. Commercial users who are also Jazz connectivity users have ARPU levels that are 50% higher than the average Jazz ARPU.
Turning to Kazakhstan.

Beeline Kazakhstan is now in its third year of market share gains, seventh quarter of above 20% top line revenue growth and remains the market leader in Net Promoter Score. 20% growth in total revenues if normalized for a change in accounting rules for revenue recognition of bundles would be actually 24.5% year-on-year with a service revenue growth of 25.3%. Adjusting for one-offs, Beeline Kazakhstan EBITDA grew by 17.3%.
With 69% penetration of 4G users in its customer base, Kazakhstan is now almost at our target of 70% penetration. In Q4, growth in data and digital revenue was up 25.3%, driven by the high usage of digital applications and increase in the number of multiplay users.

BeeTV entertainment platform reached 860,000 monthly active users with 61% growth year-on-year. It is available both on mobile devices and also as an IPTV offering in large and small screens.
Beeline Kazakhstan's digital first sub-brand Izi, reached 380,000 monthly-active users up by 6x year-on-year. 160,000 Izi customers are also subscribers of connectivity services with the [indiscernible] or [ admission ]. Digital Services, [ superpowers ], as they are known in Kazakhstan to our customers, supported the ARPU growth of 10.7% year-on-year.

Moving on to Bangladesh. Banglalink reported its third consecutive quarter of double-digit year-on-year growth at 16.9% in Q4 with the top line performance, which has accelerated throughout the year to 19% in December. With accelerated nationwide network investment, Banglalink continues to gain both revenue and subscriber market share. We expect this to continue in 2023 as we surpass 40 million customers benchmark.
In the fourth quarter, revenue market share increased by 1.4 percentage points year-on-year, and revenue growth was twice as fast as the overall market.

Banglalink took nearly 50% share of new subscribers and became the Net Promoter Score market leader in Q4 2022. The 4G subscriber base was up 34% year-on-year, reaching 16.1 million. Over the past 2 years, 4G penetration has nearly doubled from 24% to 43%.
Toffee is the #1 video platform in Bangladesh. In the fourth quarter, over 25 million users watched the World Cup on Toffee.

It closed the quarter with 21.2 million monthly active users, a 3.3-fold growth year-on-year and with higher levels of engagement as the average daily active users increased by 5-folds year-on-year.
Actually, every time Brazil or Argentina played in the World Cup, we reached more than 10 million concurrent users, supported by Edge services scale at Google Cloud, allowing us to monetize the advertising space on our platform.
70% of Toffee customers are not yet telecom consumers of Banglalink. New costs associated with nationwide 4G network rollouts and acquisition of new customers and with the minimum tax on gross revenue paid in Q4, EBITDA decreased 9.7% in Q4. In 2023, February year-to-date EBITDA is up 8.8%, which demonstrates the underlying trends.

Uzbekistan. Beeline Uzbekistan reported record high top line growth of 30% year-on-year in Q4 which is also its fourth consecutive quarter of growth above 20%. EBITDA increased 14.4%. With these results, Beeline Uzbekistan sustained its leading position in subscriber market share, gaining 1.9 percentage points of subscriber market share year-on-year. And Beeline continues to be the market leader in terms of Net Promoter Score in December 2022.

4G subscribers reached 5.5 million supported by the continued 4G rollouts and attractive digital operator offers. This represents 4G penetration of 66%, a 5 percentage point increase year-on-year. We are happy to see an 8.7% year-on-year increase in ARPU and a 42% year-on-year growth in data and digital revenues.
Now let's take a look to some of our digital products in greater detail. Digital operator 1440 stands for being highly relevant to customers and the [indiscernible] of the day.

Our digital applications drive this engagement.
On the fintech side, JazzCash is the #1 fintech service in Pakistan, serving 16.4 million customers, partnering with 186,000 merchants up 42% year-on-year. The total number of transactions processed by JazzCash in 2022 reached 2.1 billion, 22% higher year-on-year. Gross transaction value for the last 12 months was close to PKR 4.2 trillion with 31% year-on-year growth. This transaction volume represents approximately 7% of Pakistan's GDP.

Jazz, JazzCash and Mobilink Microfinance Bank provides the best experience in digital banking from member loans to payments, debit card management to working services. From SME loans to QR-based collection systems.
Beeline Kazakhstan, Simply, a digital-only neobank has 246,000 users in December 2022 and the total value of transactions lead to KZT 167 billion. Customers are enjoying the benefits of domestic and international and relicenses leads to their mobile phone numbers, overdraft offers in [indiscernible] campaigns and payments for their online purchases. In 2022, Simply was named the best fintech app by [ Liza ] International in Kazakhstan.

I have already expanded on our leadership in mobile entertainment, most notably in Pakistan with Tamasha and with Toffee in Bangladesh and with BeeTV in Kazakhstan. Let me pause here and hand the call over to Serkan to discuss our 2022 financial results in more detail. Serkan?

Serkan Okandan: Thanks, Kaan. Good morning and good afternoon to all participants. On the following slides, I will elaborate on the financial highlights for our full year results in more detail.

As Kaan mentioned already, the classification of the Russian operations as assets held for sale, and discontinued operations and we also reported financial performance, reduces the gross reported revenue and EBITDA in absolute terms.
For the full year 2022 we reported double-digit local currency growth in both revenues and EBITDA. Local currency service revenues were up 13.9% year-over-year, and local currency EBITDA was up by 12.6% year-over-year. For the full year CapEx was -- sorry, for the full year, CapEx was USD 823 million, up by 2.9% year-over-year. The higher reported EBITDA and stable CapEx compared to last year resulted in a [ USD 746 million ] unlevered free cash flow, whereas the FCF for the year was $142 million.

Moving first to revenue on Slide 20. In 2022, we saw solid revenue performance across all of our markets. Kazakhstan, Uzbekistan, Kyrgyzstan, Bangladesh and Pakistan, all stood out with double-digit growth.
In Ukraine, we achieved 8.2% year-over-year revenue growth despite the challenging operating environment. This is a testament to our [indiscernible].

In Pakistan, revenues were up by 14.3% year-over-year. This strong revenue growth in Pakistan comes despite the negative impacts of changes in taxation legislation and the reduction in mobile termination rates. Pakistan revenues were positively impacted by a favorable decision from the Islamabad High Court on a pending litigation as a result of which a related provision on revenue and EBITDA was reversed.
The overall revenue performance for the year was supported by strong 4G adoption, a continued increase in usage of our digital services and various pricing initiatives. This strong performance has continued into 2023 with year-to-date February local currency revenues up by 15.2% year-over-year.

We also saw good momentum across most of our markets in terms of underlying EBITDA, which I will cover on the next slide.
Moving on to Slide 21, which looks at our EBITDA performance in greater detail. Local currency EBITDA was up by 12.6% year-over-year, which is a strong result considering the headwinds we faced in 2022. Although this was impacted by a number of one-offs which Kaan has already covered in his section, the underlying performance remains strong. And adjusting for these one-offs, normalized local currency EBITDA would be up by 6.7% year-over-year, which is still a very solid result.

Energy costs increased across the group by around 30% year-over-year, which is a significant increase for this expense line negatively impacting the EBITDA margin. We remain focused on implementing some cost efficiency measures across the group.
Project Optimum delivered a $95 million savings in '22 with cost intensity improving by 2.5 percentage points year-over-year in local currency. This strong operational performance has also continued in '23 and year-to-date February, local currency EBITDA was up by 11.8% year-over-year.
Turning now to Slide 22.

I will cover some important balance sheet metrics. Our total cash provision stands at $3 billion and $2.5 billion held at the headquarters level. This is held in both U.S. dollars and euros and highlights the group's continued strong liquidity position. The material decrease in gross debt and net debt was largely attributed to the classification of Russian operations as assets held for sale as well as to the quarter-over-quarter depreciation of the Russian ruble against U.S.

dollars, resulting in lower reported currency level of bank loans denominated in rubles.
As we have reported, the Scheme of Arrangement was approved by the U.K. courts and an amendment to the notes will become effective upon receipt of the license -- of final licenses. We expect to receive all these licenses very shortly.
Moving now to Slide 23, which shows our debt and liquidity positions in more detail.

As I said earlier, the significant decrease in debt was primarily impacted by classification of Russian operations that held for sale. Our gross debt including leases, decreased to $7.5 billion with a total cash position of $3 billion. As I previously mentioned, $2.5 million of total cash is at the HQ level.
While we are aware of the negative implications of carrying such a large cash balance, we believe this is reasonable and justified considering the current situation in the market. Our net debt currency stands at $3.7 billion, excluding leases, plus $800 million in capitalized business.

Moving on now to Slide 24 which summarizes the debt and liquidity of our operations in Russia. At the end of the year 2022, the business recorded gross debt of $3.2 billion. The sale of Russia is expected to be concluded at an enterprise value of around $5 billion based on 31st December ForEx rates.
Moving to Slide 25. Here we outline the group's debt maturity.

As we can see from this chart, we have a favorable maturity schedule for the near term with $1.4 billion of debt maturing in December 2023. Meanwhile, the RCF can be rolled each period until final maturities in '24 and '25. You may also see on the left-hand side of the slide, our current cash position of $3 billion.
Implementation of the scheme of arrangement regarding '23 bonds, the maturities on $1.2 billion VEON holding's bonds will be extended from February and April '23, to October and December '23 once all the relevant licenses are obtained.
I would also note once again that we continue to meet all our legal obligations for all interest and principal payments due on our debt in a timely manner.

Let me now hand the end back over to Kaan for '23 guidance and closing remarks.

Muhterem Terzioglu: Thank you, Serkan. Let me give a quick recap of our guidance for 2023. Our 2023 local currency guidance for both revenue and EBITDA is 10% to 14% growth. VEON's 2023 outlook for the group CapEx intensity will be in the range of 18% to 20%.

With our February to-date results ending at 15.2% year-on-year for revenue and 11.8% of EBITDA, we have an encouraging start to the year.
With this, we are returning to provide guidance, and I'm pleased to note that this guidance is in line with the growth ambitions we have stated in our Capital Markets Day back in December 2021. In other words, we are picking up where we have left off.
Let me also talk about our achievements of 2022 priorities and where we stand. Last year, we talked about our priorities as protecting our people and supporting our employees, and this was our #1 priority and continues to be so.

Connectivity is a fundamental in humanitarian needs and we are providers of an essential service. We operated with this awareness in 2022 and this service continuity will remain to be a top priority in '23.
Throughout this challenging year, we're protecting the good standing of our company, maintaining appropriate liquidity and capital structures have been a top priority, and I'm happy to say that we have successfully delivered on this. We promise to continue to drive growth with 4G and digital operator focus and have ended the year delivering on these promises as we elaborated in greater detail earlier on this call.
In 2022, maintaining a disciplined approach to our portfolio is a must.

We concentrated in larger markets conducive to digital operator value generation and have successfully divested Algeria and Georgia operations.
Now, moving on to 2023. Let me set our priorities for this year as well. One, concluding the sale of Russia business as an optimal solution for all stakeholders remains to be a top priority for our team over the next few months. Two, we will continue to focus on optimizing our capital structure, including finalization of the scheme of arrangements and look to regain access to debt capital markets.

Three, we will seize the emerging markets growth opportunity, delivering best-in-class connectivity and digital services to our markets with our digital operator 1440 strategy.
Four, we will remain focused on active portfolio management and the pursuit of opportunities to realize the value of our infrastructure assets.
Five, lastly but importantly, we are focused on unlocking further value for our shareholders, exploring and planning for local leasing opportunities and returning value to shareholders.
Let me once again reiterate my thanks to our employees and especially Serkan, who helped us successfully navigate some challenging times as our Group Chief Financial Officer. As a friend and a colleague, I look forward to working with him in your advisory role, Serkan.

And once again, welcome to our new Chief Financial Officer, Joop to the role. We look forward to working with you in this new capacity, and I have no doubts that you will carry VEON's financial management to even greater heights. With that, I would like to thank you for your attention, and I will hand over to Nik so that we can move on to the Q&A session.

Unknown Executive: [Operator Instructions] There have been a number of questions that have come through. And let me start, Kaan, actually, with the first question for you.

Can you maybe just talk a little bit about your guidance again. We obviously saw you had a very strong start to the year in January and February. I do think this is the right sort of guidance at this stage.

Muhterem Terzioglu: And yes, I wanted to start our guidance where we really left back in December 2021 as we shared our aspirations with our investors that our company is able to sustain an average 10% to 14% cumulative average growth rate. And I think it's prudent to start with this guidance given the complexity we have in many of the macroeconomic situations.

But I'm encouraged with the strong start for the year, as you said.

Unknown Executive: Thanks, Kaan. Serkan, this a question for you, when do you expect the scheme to become effective and maybe some comments on the timing of the licenses and also particularly around the amendments becoming effective as well.

Serkan Okandan: Thank you, Nik. As you know, this scheme has become effective from first of January, when the U.K.

court approved the scheme. We anticipate to receive the related licenses from related authorities. Once we receive all the licenses or we receive the confirmation that there is no need for a license, the amendments will also be effective. In the meantime, we are hedging the tensile period. If we cannot receive all the licenses until May 2nd, this scheme will go away.

However, we consider that this will be a very unlikely scenario.

Unknown Executive: Thank you, Serkan. Kaan, back to you. Maybe comment on the status of the tower transaction across some of our markets.

Muhterem Terzioglu: Sure.

We are committed to our strategy of being an asset-light operator, and we will be focused on looking for monetization of our tower assets. This is not as a matter of a need for cash generation. Actually, we are disciplined in terms of having clear demarcation lines for different type of business models. Power operations, infrastructure operations are fundamentally different. And today's realities are putting telecom operators in a position to delay themselves.

No operator is rich and luxurious enough to have exclusive networks.
Towers in the hands of capable independent tower operators represent a much bigger value and operational efficiency. This is why we will continue on our journey for modernizing our towers. This includes Pakistan, Bangladesh, Kazakhstan and Uzbekistan operations and we already have also a power company in Ukraine, and we are looking forward to peace and the next monetization opportunity there.

Unknown Executive: Thanks, Kaan.

And Kaan, question for you. Can you comment a little bit about the current operating environment in Pakistan, particularly given the current macro and geopolitical challenges that we always hear about.

Muhterem Terzioglu: Pakistan is going through a tough macroeconomic challenge, and we are well aware of that. We believe that the situation and the times are challenging. The strongest players with a healthy operation becomes even more important for the market.

We are closely watching the macroeconomic situation and the foreign currency account deficits and taking the necessary measures to make sure that our values are not eroded by the inflation. And our teams are focusing on making sure that our customers are provided with high-quality services and with the right prices.

Unknown Executive: Thanks, Kaan. Serkan, just to you, what will happen to the remaining bonds on completion of the Russian operations transaction and bonds that are still remaining and maybe still outstanding to the Russian business.

Serkan Okandan: Annual bonds and bank loans at the level of [indiscernible].

We service [indiscernible] at closing and annual bonds issued or bank loans raised by VEON Holdings B.V. will remain as VEON Holdings B.V. debt. And after the closing of Russian transaction, we will review VEON's longer-term capital structure in more detail and once we have a better visibility about access to capital markets after the closing.

Unknown Executive: Okay.

I guess then, sort of linked to that question, have you had any discussions here to the rate -- with rating agencies around that?

Serkan Okandan: Well, we have not started a formal discussion with the rating agencies yet, but we anticipate to have better visibility about the capacity to go back to the markets after closing the Russian transaction.

Unknown Executive: Okay. Kaan, back to you. Could you maybe update us on your -- are you making to talk about the basin subsidiary [indiscernible] potential timing, maybe give some comments on that.

Muhterem Terzioglu: Sure.

All companies in the respective countries, Jazz in Pakistan, Banglalink Bangladesh, Beeline in Kazakhstan and Uzbekistan, they're among the largest enterprises in these countries and they are blue-chip brands. As we see these countries building their capital markets infrastructure, we play, this is an important role and opportunity for us also to consider local meetings to tap into local investor base, which is growing in a fundamental way. So these will be the kinds and preparation that we will do this year, and we will, of course, keep investors posted on the developments.

Unknown Executive: Thank you. Serkan, can you talk about once the Russia transaction is completed how will that impact VEON's liquidity and debt position?

Serkan Okandan: Sure.

Under the agreement with the buyers, the total consideration for the second debt offering is RUB 130 billion and based on the December fixed rate this represents around USD 1.8 billion. And it is expected that the total consideration will be paid by the buyers by taking on and discharging certain VEON Holdings debt by [ the stockholders ]. And if we take into consideration this $1.8 billion, plus around USD 3.2 billion that's including capital leases and [indiscernible] balance sheet, we are talking about around USD 5 billion that should be discharged from the VEON Holdings consolidated balance sheet, which is a quite material amount for VEON.

Unknown Executive: And so a second stab at you -- I mean, would you consider buying back your long indentured bonds given the current pricing and our liquidity position?

Serkan Okandan: And while I mentioned in the presentation, currently, we are focusing to ensure that we keep a strong liquidity. And as I said, we are keeping around USD 2.5 billion liquidity at the HQ level.

However, having said that, we are currently evaluating various options around our long-term capital structure.

Unknown Executive: Thank you. Kaan, maybe could you just please comment on our ability to increase price, particularly considering the current inflation levels and some of the challenging macro environment in some of our markets.

Muhterem Terzioglu: It is really very critical for us to be able to, in a disciplined way, increase our prices in line with the inflation as the inflation rate gets higher and we have successfully done that this year, and we have proven that we are able to move our prices in line with the value that we deliver to customers. We see ourselves in a good position, considering that we are among the lowest ARPU level countries in telecom sector.

And this actually gives us room to improve our pricing as we enrich our offers and provide more relevant digital services to customers bundled with our offers.

Unknown Executive: Serkan, could you give any comments on some of the ongoing cost initiatives in our cost initiative program?

Serkan Okandan: Yes, sure. As I mentioned in the presentation, we will keep very focused on implementing the cost initiatives across the board. In serving customers, we delivered around $95 million of savings in 2022. And we expect that this kind of savings will continue in '23 and also in the upcoming years as well.

And understandably, we incurred some one-off costs, extraordinary costs in '22, which will gradually reduce in '23 and the next year as well.

Unknown Executive: And Serkan, an important question has actually come through from a number of people now is obviously given what's going on in the banking environment. Can you comment on which institutions are holding our cash and in what form our cash is held at the moment?

Serkan Okandan: Unfortunately, I cannot name the institutions. All I can say is all are kept in Tier 1 international banks in the U.S. and Europe and also our cash is fully held in U.S.

dollars and euros. And we do not have any cash in bonds because they are all invested in demand deposits plus by money market funds.

Unknown Executive: Thank you, Serkan. Kaan, can you maybe just give us a bit about the timing on when you expect the Russian transaction to close and just an update on the process and what is still needed there.

Muhterem Terzioglu: As we have announced on February 7, we have received the approval of the transaction by the Russian regulators, actually, the approval was given to the buyers so that they can start the process.

And as we have earlier stated, we expect this transaction to be closing after the necessary procedures on or before June 1.

Unknown Executive: And then Kaan, let's start with you, the turnaround in Bangladesh has been very, very strong. Can you just comment around this and what's driven this very strong turnaround, one?

Muhterem Terzioglu: What we have seen in Bangladesh is actually almost like a Blue Motion market opportunity. And this is why we decided to improve our regional network to nationwide deployment and together with our digital operator strategy, the introduction of new digital services like education, health care, but most importantly, healthy on the entertainment side, we really made an improvement in the way our Net Promoter Scores work and availability of our services also improved.
Most importantly, for the 6 consecutive quarters, Banglalink network has been voted as the fastest network in the country.

And as I mentioned, during the last quarter, we almost acquired 50% of the new customers in the entire country. All these things is a combination of well planned investments, brilliant execution by the local leadership team and also excellent innovation on our product portfolio.

Unknown Executive: That's great. I think that's all we have time for from a question perspective. There are 1 or 2 outstanding questions that have come through, and I'll get back to those individually.

I just want to thank everyone for dialing in. I appreciate your attendance on the call. [indiscernible] thank you very much.

Muhterem Terzioglu: Thank you.

Serkan Okandan: Thank you.

Unknown Executive: Thank you.