©VEON Ltd 2016©VimpelCom LtdAlexey Reznikovich

TELECOM INDUSTRY:

BEYOND CONNECTIVITY

1 Market Cap Weighted Average EBITDA Margin

2 Average Capex/Revenue

3 Market Cap Weighted Average LTM EV/EBITDA

4 Revenue, Capex and EBITDA margin estimates. Multiples are actuals as of end of 2016.

SOURCE: S&P Capital IQ Top 100 Telecommunications companies, McKinsey

1,531

1,819

2,058 2,0292,097

2,294 2,328

2,468

2,255

2,0501,920 1,920

2.000

10

1.500

1.000

500

30

15

5

35

20

25

0

40

014 1513120706 08 111009 2016E42005

Global telecom

revenues (USD bn) Capex/Revenue (%)2

EV/EBITDA (x)3

EBITDA Margin (%)1

2.500

SELECTED METRICS OF THE TELECOMS

INDUSTRY

“No matter how much you

shorten a play, it is never

enough.”

Anton Chekhov

THREE BIGGEST LIES

► The check is in the mail

► Your call is important to us

► I agree to the terms and conditions

THREE BIGGEST LIES OF THE TELECOM INDUSTRY

► Data monetization is coming

► We have billions of customers

► We are a utility with stable, sustainable returns. Exclusive access to spectrum is our safety net

9

TELECOM COMPANY “ASSETS”

Asset Telecom Company Digital Company

► People, Talent ► Middle-age corporate execs

► Low appeal among graduates

► Young, innovative, dynamic, driven

► High appeal among graduates

Microsoft2

Apple3

Deutsche Telekom

25

Google1

...

...

Rolls-Royce2

Apple3

BT55

Google1

...

...

Apple2

BMW3

Telefónica25

Google1

NAVER2

Kakao3

SK Group5

Google1

...

Microsoft2

Apple3

SingTel35

Google1

...

...

Most attractive employers for students in IT, Engineer/IT, or Computer Sciences – 2016 ranking

Germany UK

Spain South Korea Singapore

Microsoft2

Apple3

AT&T43

Google1

United States

Verizon51

...

...

...

SOURCE: Universum 2016 (http://universumglobal.com/rankings/)

TELCOS ARE IN VERY TOUGH COMPETITION FOR TALENT

11

TELECOM COMPANY “ASSETS”

Asset Telecom Company Digital Company

► People, Talent

► Equipment/software

► Tech expertise

► Customers

► Customer Info

► Middle-age corporate execs

► Low appeal among graduates

► No R&D, reliance on vendors’ proprietary solutions

► Limited to networks

► Disengaged, disintermediated, tolerant

► Info stored, no use

► Young, innovative, dynamic, driven

► High appeal among graduates

► Culture ► Corporate, bureaucratic, rigid (long lead times)

► Entrepreneurial, “free spirit” (constant innovation)

► In-house R&D, open source

► Strong, agile

► Engaged and satisfied

► Info processed and monetized

WE NEED TO SHIFT THE PARADIGM

► We need to embrace new vision for the industry

► Building an enabled gateway to customers

► Moving our business model BEYOND CONNECTIVITY!