Kyivstar cuts its income by 14.1% in Q1 2024 due to implementation of large-scale loyalty program after cyber attack
The largest Ukrainian mobile operator, Kyivstar, saw a 14.1% decrease in revenue to UAH 7.1 billion in January-March due to the implementation of a large loyalty program following an unprecedented cyber attack at the end of 2023, the operator's press service reported on Thursday.
"The company's total revenue in the first quarter of 2024 decreased by 14.1% to UAH 7.1 billion compared to the first quarter of 2023 due to the unprecedented cyber attack on the Kyivstar network in December 2023. As a token of gratitude to subscribers for their loyalty, the company waived one monthly fee for tariffs for all mobile and fixed-line users," Kyivstar's press service said, specifying that the main amount of compensation under the loyalty program was allocated in the first quarter of 2024.
EBITDA in the first quarter fell by 26.3% to UAH 3.62 billion.
The total operating revenue from mobile services provided by Kyivstar dropped by 14.9% to UAH 6.6 billion during the specified period, revenue from fixed-line services fell by 9.5% to UAH 419 million. Revenue from data transmission services dropped by 13.3% to UAH 3.87 million.
The number of Kyivstar mobile subscribers in the first quarter of 2024 decreased by 1.9% compared to the same period in 2023 to 23.9 million, while the number of Home Internet subscribers fell by 1.1% to 1.1 million. However, the number of subscribers using mobile internet grew by 2.1% to 17.7 million, and data usage volume rose by 3.8% to 9.9 GB per subscriber.
The financial indicators of Kyivstar decreased more significantly when expressed in currency, according to materials posted on the website of the parent company VEON. The company's revenue in the first quarter of 2024 decreased by 17.8% to $188 million, and the revenue from services decreased by 18.3% to $185 million. The EBITDA indicator decreased by 29.6% to $95 million.
"The overall number of mobile subscribers in the first quarter of 2024 decreased by 1.9% due to the impact of war-related factors, such as population migration out of the country, as well as the temporary occupation of several settlements," said Kyivstar's press service.
The number of 4G Kyivstar subscribers in the first quarter increased by 8.9% to 14.5 million. 4G penetration increased by 6.6 percentage points to 60.6%.
The APRU (average monthly revenue per fixed-line voice service user) indicator decreased by 12.4% to UAH 92, while the MOU (average monthly voice communication time per user) decreased by 0.9% to 549 minutes.
Capital investments by Kyivstar in January-March grew by 37.4% compared to the same period in 2023 to UAH 1.072 billion.
"In the first quarter of 2024, Kyivstar continued the implementation of the '4G Everywhere' strategy and installed 170 new 4G sites, as well as modernized 900 existing base stations for compatibility with the LTE standard," the company's press service reported, noting that the company invested in the restoration and development of the telecom network and strengthening energy independence.
Kyivstar emphasized that thanks to the company's efforts, almost 100% of the telecom network in the territory controlled by Ukraine operates normally, providing subscribers with communication and data transmission services around the clock.
New digital businesses of Kyivstar demonstrated stable growth in the first quarter – the number of Kyivstar TV service users grew by 45.3% compared to the first quarter of 2023. Additionally, the number of Helsi medical service users increased by 11%, and the number of users of the My Kyivstar digital self-service platform increased by 17.3%.
As of today, the company provides access to 1,600 medical institutions, which is 3.6% more than in the first quarter of 2023. The number of registered specialists on the platform increased by 14.4% to 38,000. By the end of the quarter, the application was downloaded 7.4 million times, and it facilitated 2.5 million doctor appointments, representing a 33.5% increase compared to the same period last year.
The usage time of the Kyivstar streaming service during this period increased by 40% to 246 minutes per day, while the duration of a single session increased by 11% to 10 minutes.
"In the reporting quarter, more than 20,000 service subscribers used educational content, access to which the operator provides free of charge," the operator's press service said.
In the first quarter, Kyivstar paid over UAH 1 billion in taxes and other payments to the state budget.
During the specified period, the company allocated UAH 10 million to the Nezlamni medical center, launched an educational initiative for children who lost their parents due to the war, and allocated UAH 50 million to the Come Back Alive fund for the purchase of comprehensive communication systems for the Air Command South.